11,950,000 Units RXI PHARMACEUTICALS CORPORATION UNDERWRITING AGREEMENT
Exhibit 1.1
11,950,000 Units
RXI PHARMACEUTICALS CORPORATION
April 15, 2011
▇▇▇▇ Capital Partners, LLC
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs:
1. Introduction. RXi Pharmaceuticals Corporation, a Delaware corporation
(the “Company”), proposes to issue and sell to ▇▇▇▇ Capital Partners, LLC (the “Underwriter”),
pursuant to the terms and conditions of this Underwriting Agreement (this “Agreement”), an
aggregate of 11,950,000 units (the “Units”), with each Unit consisting of (i) one share of common stock,
$0.0001 par value per share (the “Common Stock”) of the Company (the “Shares”) and (ii) one warrant
to purchase one share of Common Stock (the “Warrants”). Units will not be issued or certificated.
The Shares and Warrants are immediately separable and will be issued separately. The terms of the
Warrants are set forth in the form of Warrant attached as Exhibit A hereto. The Shares,
Warrants and Warrant Shares (as defined in Section 3(j)) are sometimes collectively
referred to herein as the “Securities.” The proposed offering, issuance and sale of the Units are
hereby referred to as the “Offering.”
2. delivery and payment. On the basis of the representations, warranties and
agreements of the Company herein contained, and subject to the terms and conditions of this
Agreement:
2.1 The Company agrees to issue and sell and the Underwriter agrees to purchase from
the Company the Units at a purchase price of $0.93 per Unit (the “Purchase Price”). The
Company has been advised by you that you propose to make a public offering of the Units as
soon after this Agreement has become effective as in your judgment is advisable. The
Company is further advised by you that the Units are to be offered to the public initially
at a price of $1.00 per Unit (the “Public Offering Price”).
2.2 Payment of the Purchase Price for, and delivery of, the Shares and Warrants
contained in the Units shall be made at the time and date of closing and delivery of the
documents required to be delivered to the Underwriter pursuant to Sections 4 and
6 hereof, which shall be at 11:00 A.M., New York time, on April 20, 2011 (the
“Closing Date”) at the office of Ropes & ▇▇▇▇ LLP, Prudential Tower, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or at such other time and date as the Underwriter and the Company determine
pursuant to Rule 15c6-1(a) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”). On the Closing Date, the Company shall deliver the Shares and Warrants
contained in the Units, which shall be registered in the name or
names and shall be in such
denominations as the Underwriter may request at least one (1) business day before the
Closing Date, to the Underwriter, which delivery shall (a) with respect to the Shares, shall
be made through the facilities of the Depository Trust Company’s DWAC system, and (b) with
respect to the Warrants, shall be made by physical delivery to be received or directed by
the Underwriter no later than one (1) business day following the Closing Date.
2.3 No Units which the Company has agreed to sell pursuant to this Agreement shall be
deemed to have been purchased and paid for, or sold by the Company, until the Shares and
Warrants contained in such Units shall have been delivered to the Underwriter against
payment by the Underwriter. If the Company shall default in its obligations to deliver any
Shares or Warrants contained in such Units to the Underwriter, the Company shall indemnify
and hold the Underwriter harmless against any loss, claim, damage or expense arising from or
as a result of such default by the Company in accordance with the procedures set forth in
Section 7(c) herein.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Underwriter and agrees with the Underwriter that:
(a) The Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the “Securities Act”), and published rules and
regulations thereunder (the “Rules and Regulations”) adopted by the Securities and Exchange
Commission (the “Commission”) a “shelf” Registration Statement (as hereinafter defined) on
Form S-3 (File No. 333-167025), which became effective as of May 28, 2010 (the “Effective
Date”), including a base prospectus relating to the Shares and Warrants contained in the
Units (the “Base Prospectus”), and such amendments and supplements thereto as may have been
required to the date of this Agreement. The term “Registration Statement” as used in this
Agreement means the registration statement (including all exhibits, financial schedules and
all documents and information deemed to be a part of the Registration Statement pursuant to
Rule 430A of the Rules and Regulations), as amended and/or supplemented to the date of this
Agreement, including the Base Prospectus. The Registration Statement is effective under the
Securities Act and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the Prospectus (as defined
below) has been issued by the Commission and no proceedings for that purpose have been
instituted or, to the knowledge of the Company, are threatened by the Commission. The
Company, if required by the Rules and Regulations of the Commission, will file the
Prospectus (as defined below) with the Commission pursuant to Rule 424(b) of the Rules and
Regulations. The term “Prospectus” as used in this Agreement means the Base Prospectus and
the prospectus supplement relating to the offering of the Shares and Warrants contained in
the Units, in the form in which it is to be filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations, except that if any revised prospectus or prospectus
supplement shall be provided to the Underwriter by the Company for use in connection with
the Offering which differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to Rule 424(b) of the
Rules and Regulations), the term “Prospectus” shall refer to the Prospectus as so revised by
such prospectus or prospectus supplement, as the case may be, from and after the time it is
first provided to the Underwriter for such use (or in the form first made available to the
Underwriter by the Company to meet requests of prospective purchasers pursuant to Rule 173
under the Securities Act). Any preliminary prospectus or prospectus subject to completion
included in the Registration Statement or filed with the Commission pursuant to Rule 424 of
the Rules and Regulations is hereafter called a “Preliminary Prospectus.” Any reference
herein to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Exchange Act, on or before the last to occur
of the Effective Date, the date of the Preliminary Prospectus, or the date of the
Prospectus, and any reference herein to the terms “amend,” “amendment,” or “supplement” with
respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include (i) the filing of any document under the Exchange Act after
the Effective Date, the date of such Preliminary Prospectus or the date of the Prospectus,
as the case may be, which is incorporated by reference and (ii) any such document so filed.
If the Company has filed an abbreviated registration statement to register additional
securities pursuant to Rule 462(b) under the Rules and Regulations (the “462(b) Registration
Statement”), then any reference herein to the Registration Statement shall also be deemed to
include such 462(b) Registration Statement.
(b) As of the Applicable Time (as defined below) and as of the Closing Date, neither
(i) any General Use Free Writing Prospectus (as defined below) issued at or prior to the
Applicable Time, and the Pricing Prospectus (as defined below), all considered together
(collectively, the “General Disclosure Package”), (ii) any individual Limited Use Free
Writing Prospectus (as defined below) issued at or prior to the Applicable Time, nor (iii)
the bona fide electronic road show (as defined in Rule 433(h)(5) of the Rules and
Regulations), if any, that has been made available without restriction to any person, when
considered together with the General Disclosure Package, included or will include, any
untrue statement of a material fact or omitted or as of the Closing Date will 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; provided, however, that the
Company makes no representations or warranties as to information contained in or omitted
from any Issuer Free Writing Prospectus or the Pricing Prospectus, in reliance upon, and in
conformity with, written information furnished to the Company by the Underwriter
specifically for inclusion therein, which information the parties hereto agree is limited to
the Underwriter’s Information (as defined in Section 17). As used in this
paragraph (b) and elsewhere in this Agreement:
“Applicable Time” means 8:00 A.M., New York time, on the date of this Agreement.
“General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
identified on Schedule A to this Agreement.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 of the Rules and Regulations relating to the Shares and Warrants contained in the
Units in the form filed or required to be filed with the Commission or, if
not required to
be filed, in the form retained in the Company’s records pursuant to Rule 433(g) of the Rules
and Regulations.
“Limited Use Free Writing Prospectuses” means any Issuer Free Writing Prospectus that is not
a General Use Free Writing Prospectus.
“Pricing Prospectus” means the Preliminary Prospectus, if any, and the Base Prospectus, each
as amended and supplemented immediately prior to the Applicable Time, including any document
incorporated by reference therein, any Issuer Free Writing Prospectus and any prospectus
supplement deemed to be a part thereof.
(c) No order preventing or suspending the use of any Preliminary Prospectus, any Issuer
Free Writing Prospectus or the Prospectus relating to the Offering has been issued by the
Commission, and no proceeding for that purpose or pursuant to Section 8A of the Securities
Act has been instituted or, to the knowledge of the Company, threatened by the Commission,
and any Preliminary Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Securities Act and the Rules and Regulations, and,
unless otherwise corrected, modified or supplemented, did not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from any Preliminary Prospectus, in
reliance upon, and in conformity with, written information furnished to the Company by the
Underwriter specifically for inclusion therein, which information the parties hereto agree
is limited to the Underwriter’s Information (as defined in Section 17).
(d) At the respective times the Registration Statement and any amendments thereto
became or become effective, at the date of this Agreement and at the Closing Date, the
Registration Statement and any amendments thereto conformed and will conform in all material
respects to the requirements of the Securities Act and the Rules and Regulations and did not
and will not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein not
misleading; and the Prospectus and any amendments or supplements thereto, at the time the
Prospectus or any amendment or supplement thereto was issued and at the Closing Date,
conformed and will conform in all material respects to the requirements of the Securities
Act and the Rules and Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not misleading; provided,
however, that the foregoing representations and warranties in this paragraph (d)
shall not apply to information contained in or omitted from the Registration Statement or
the Prospectus, or any amendment or supplement thereto, in reliance upon, and in conformity
with, written information furnished to the Company by the Underwriter specifically for
inclusion therein, which information the parties hereto agree is limited to the
Underwriter’s Information (as defined in Section 17). The Prospectus contains all
required information
under the Securities Act with respect to the Shares and Warrants
contained in the Units and the distribution thereof.
(e) Each Issuer Free Writing Prospectus, if any, as of its issue date and at all
subsequent times through the completion of the Offering or until any earlier date that the
Company notified or notifies the Underwriter as described in Section 4(e), did not,
does not and will not include any information that materially conflicted, conflicts or will
conflict with the information contained in the Registration Statement, Pricing Prospectus or
the Prospectus, including any document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof that has not been superseded or modified, or includes
an untrue statement of a material fact or omitted or would omit to state a material fact
required to be stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The foregoing
sentence does not apply to statements in or omissions from any Issuer Free Writing
Prospectus in reliance upon, and in conformity with, written information furnished to the
Company by the Underwriter specifically for inclusion therein, which information the parties
hereto agree is limited to the Underwriter’s Information (as defined in Section
17).
(f) The documents incorporated by reference in the Prospectus, when they became
effective or were filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and none of such documents contained
any untrue statement of a material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents become effective or are
filed with the Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they were made,
not misleading.
(g) At the time of filing the Registration Statement, any 462(b) Registration Statement
and any post-effective amendments thereto, and at the date hereof, the Company was not, and
the Company currently is not, an “ineligible issuer,” as defined in Rule 405 of the Rules
and Regulations. The Company has not, directly or indirectly, distributed and will not
distribute any offering material in connection with the Offering other than any Preliminary
Prospectus, the Prospectus and other materials, if any, permitted under the Securities Act
and consistent with Section 4(b) below. The Company will file with the Commission
all Issuer Free Writing Prospectuses (other than a “road show,” as described in Rule
433(d)(8) of the Rules and Regulations), if any, in the time and manner required under Rules
163(b)(2) and 433(d) of the Rules and Regulations.
(h) The Company and each Subsidiary (as defined below) has been duly organized and is
validly existing and in good standing under the laws of its jurisdiction of
incorporation or
organization. The Company and each Subsidiary is duly qualified to do business and is in
good standing as foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business require such qualification and has all power and
authority necessary to own or hold its properties and to conduct the business in which it is
engaged, except where the failure to so qualify or have such power or authority would not
(i) have, singly or in the aggregate, a material adverse effect on the condition (financial
or otherwise), results of operations, assets, business or prospects of the Company and its
Subsidiaries, taken as a whole, or (ii) impair in any material respect the ability of the
Company to perform its obligations under this Agreement or to consummate any transactions
contemplated by this Agreement, the General Disclosure Package or the Prospectus (any such
effect as described in clauses (i) or (ii), a “Material Adverse Effect”). The Company owns
or controls, directly or indirectly, only the following corporations, partnerships, limited
liability partnerships, limited liability companies, associations or other entities:
Apthera, Inc. (“Apthera”) (each, a “Subsidiary”).
(i) The Company has the full right, power and authority to enter into this Agreement
and the Warrants and, subject to effecting the Increased Shares Amendment (as defined
below), to perform and to discharge its obligations hereunder and thereunder; and this
Agreement and the Warrants have been duly authorized, executed and delivered by the Company,
and constitute valid and binding obligations of the Company enforceable in accordance with
their terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting parties’
rights generally and except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or at
law) and except as to the enforceability of any rights to indemnification or contribution
that may be violative of the public policy underlying any law, rule or regulation (including
any federal or state securities law, rule or regulation).
(j) The Shares and Warrants to be issued and sold by the Company to the Underwriter
hereunder have been, and from and after the Authorized Shares Increase Date (as defined
below), the shares of Common Stock issuable upon exercise of the Warrants (the “Warrant
Shares”) will be, duly and validly authorized and, when issued and delivered against payment
therefor as provided herein, and the Warrant Shares, when issued and delivered against
payment therefor as provided in the Warrants, will be duly and validly issued, fully paid
and nonassessable and free of any preemptive or similar rights and will conform to the
description thereof contained in the General Disclosure Package and the Prospectus.
(k) The Company has an authorized capitalization as set forth in the General Disclosure
Package, and all of the issued and outstanding shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable, have been
issued in compliance with federal and state securities laws, and conform to the description
thereof contained in the General Disclosure Package and the Prospectus. As of April 1,
2011, there were 24,995,428 shares of Common Stock issued and outstanding and no shares of
Preferred Stock, par value $0.0001 of the Company issued
and
outstanding, and 14,517,620 shares of
Common Stock were issuable upon the exercise of all options, warrants and convertible
securities outstanding as of such date. Since such date, the Company has not issued any
securities, other than Excluded Issuances (as defined below). All of the Company’s stock options,
warrants and other rights to purchase or exchange any securities for shares of the Company’s
capital stock have been duly authorized and validly issued and were issued in compliance
with U.S. federal and state securities laws. The Shares and Warrants contained in the Units
to be issued and sold by the Company under this Agreement will conform to the description
thereof in the General Disclosure Package and the Prospectus in all material respects; and
no person or entity has the right to require registration of shares of Common Stock or other
securities of the Company because of the filing or effectiveness of the Registration
Statement and the Shares and Warrants contained in the Units and, from and after the
Authorized Shares Increase Date, the Warrant Shares will be free of statutory and
contractual preemptive rights, resale rights, rights of first refusal and similar rights,
other than as described in the General Disclosure Package and the Prospectus. None of the
outstanding shares of Common Stock 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 shares of capital stock, stock 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 described above or accurately described in the General
Disclosure Package. The description of the Company’s stock option, stock bonus and other
stock plans or arrangements, and the options or other rights granted thereunder, as
described in the General Disclosure Package and the Prospectus, accurately and fairly
present the information required to be shown with respect to such plans, arrangements,
options and rights.
(l) All the outstanding shares of capital stock of each Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable and, except to the extent
set forth in the General Disclosure Package or the Prospectus, are owned by the Company
directly or indirectly through one or more wholly-owned subsidiaries, free and clear of any
claim, lien, encumbrance, security interest, restriction upon voting or transfer or any
other claim of any third party.
(m) The execution, delivery and performance of this Agreement and the Warrant, the
issuance and sale of the Shares and Warrants by the Company and the consummation of the
transactions contemplated hereby and thereby will not (with or without notice or lapse of
time or both) (i) conflict with or result in a breach or violation of any of the terms or
provisions of, constitute a default or Debt Repayment Triggering Event (as defined below)
under, give rise to any right of termination or other right or the cancellation or
acceleration of any right or obligation or loss of a benefit under, or give rise to the
creation or imposition of any lien, encumbrance, security interest, claim or charge upon any
property or assets of the Company or any
Subsidiary pursuant to, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is bound or to which any of
the property or assets of the Company or any Subsidiary is subject, (ii) subject to
effecting the Increased Shares Amendment, result in any violation of the provisions of the
charter or by-laws (or analogous governing instruments, as applicable) of the Company or any
Subsidiary or (iii) result in any violation of any law, statute, rule, regulation, judgment,
order or decree of any court or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or any Subsidiary or any of their properties or assets,
except, with respect to clauses (i) and (iii), for such conflicts, breaches or violations as
would not, singly or in the aggregate, result in a Material Adverse Effect. A “Debt
Repayment Triggering Event” means any event or condition that gives, or with the giving of
notice or lapse of time would give the holder of any note, debenture or other evidence of
indebtedness (or any person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by the Company
or any Subsidiary.
(n) Except for (i) the registration of the Shares, Warrants and, to the extent
required, the Warrant Shares under the Securities Act, (ii) the approval of the Company’s
stockholders of the Increased Shares Amendment (as defined below), (iii) effecting the
Increased Shares Amendment, and (iv) such consents, approvals, authorizations, registrations
or qualifications as may be required under the Exchange Act and applicable state or foreign
securities laws, the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Nasdaq
Capital Market (“Nasdaq CM”) in connection with the Offering, no consent, approval,
authorization or order of, or filing, qualification or registration with, any court or
governmental agency or body, foreign or domestic, which has not been made, obtained or taken
and is not in full force and effect, is required for the execution, delivery and performance
of this Agreement by the Company, the Offering or the consummation of the transactions
contemplated hereby.
(o) To our knowledge, BDO ▇▇▇▇▇▇▇ LLP, who have audited certain financial statements
and related schedules of the Company included or incorporated by reference in the
Registration Statement, the General Disclosure Package and the Prospectus, is an independent
registered public accounting firm with respect to the Company as required by the Securities
Act and the Rules and Regulations and the Public Company Accounting Oversight Board (United
States) (the “PCAOB”). Except as pre-approved in accordance with the requirements set forth
in Section 10A of the Exchange Act, BDO ▇▇▇▇▇▇▇ LLP has not been engaged by the Company to
perform any “prohibited activities” (as defined in Section 10A of the Exchange Act).
(p) To our knowledge, ▇▇▇▇▇▇ Company, PLLC, who have audited certain financial
statements and related schedules of Apthera included or incorporated by reference in the
Registration Statement, the General Disclosure Package and the Prospectus, is an independent
certified public accounting firm with respect to Apthera as required by the Securities Act.
Except as pre-approved in accordance with the requirements set forth in Section 10A of the
Exchange Act, ▇▇▇▇▇▇ Company, PLLC has not been engaged by the Company or Apthera to perform
any “prohibited activities” (as defined in Section 10A of the Exchange Act).
(q) The financial statements of the Company, together with the related notes and
schedules, included or incorporated by reference in the General Disclosure Package, the
Prospectus and in the Registration Statement fairly present the financial position and the
results of operations and changes in financial position of the Company and its consolidated
Subsidiaries at the respective dates or for the respective periods therein specified. Such
statements and related notes and schedules have been prepared in accordance with the
generally accepted accounting principles in the United States (“GAAP”) applied on a
consistent basis throughout the periods involved except as may be set forth in the related
notes included or incorporated by reference in the General Disclosure Package. Such
financial statements, together with the related notes and schedules, included or
incorporated by reference in the General Disclosure Package and the Prospectus comply in all
material respects with the Securities Act, the Exchange Act, and the Rules and Regulations
and the rules and regulations under the Exchange Act. No other financial statements or
supporting schedules or exhibits with respect to the Company are required by the Securities
Act or the Rules and Regulations to be described, or included or incorporated by reference
in the Registration Statement, the General Disclosure Package or the Prospectus. There is
no pro forma or as adjusted financial information which is required to be included in the
Registration Statement, the General Disclosure Package, or the Prospectus or a document
incorporated by reference therein in accordance with the Securities Act and the Rules and
Regulations which has not been included or incorporated as so required. The pro forma and
pro forma as adjusted financial information and the related notes included or incorporated
by reference in the Registration Statement, the General Disclosure Package and the
Prospectus have been properly compiled and prepared in accordance with the applicable
requirements of the Securities Act and the Rules and Regulations and present fairly the
information shown therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein.
(r) The financial statements of Apthera, together with the related notes and schedules,
included or incorporated by reference in the General Disclosure Package, the Prospectus and
in the Registration Statement fairly present the financial position and the results of
operations and changes in financial position of the Apthera and its consolidated
subsidiaries at the respective dates or for the respective periods therein specified. Such
statements and related notes and schedules have been prepared in accordance with GAAP
applied on a consistent basis throughout the periods involved except as may be set forth in
the related notes included or incorporated by reference in the General Disclosure Package.
Such financial statements, together with the related notes and schedules, included or
incorporated by reference in the General Disclosure Package and the Prospectus comply in all
material respects with the Securities Act, the Exchange Act, and the Rules and Regulations
and the rules and regulations under the Exchange Act. No other financial statements or
supporting schedules or exhibits with respect to Apthera are required by the Securities Act
or the Rules and Regulations to be described, or included or incorporated by reference in
the Registration Statement, the General Disclosure Package or the Prospectus.
(s) Neither the Company nor any Subsidiary has sustained, since the date of the latest
audited financial statements included or incorporated by reference in the General Disclosure
Package, any material loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or contemplated in the
General Disclosure Package; and, since such date, there has not been any change in the
capital stock (other than Common Stock issued pursuant to (i) the Agreement and Plan of
Merger, dated as of March 31, 2011 (the “Merger Agreement”), by and among the Company,
Diamondback Acquisition Corp., Apthera and the stockholder representative named therein,
(ii) the exercise of stock options, or the grant of restricted stock awards, pursuant to the
Company’s stock incentive plans and (iii) the exercise of warrants issued by the Company)
(collectively, the “Excluded Issuances”) or long-term debt of the Company or any Subsidiary,
or any material adverse change, or any development involving a prospective material adverse
change, in or affecting the business, assets, general affairs, management, financial
position, prospects, stockholders’ equity or results of operations of the Company or any
Subsidiary, otherwise than, in each case, as set forth or contemplated in the General
Disclosure Package.
(t) Except as set forth in the General Disclosure Package, there is no legal or
governmental action, suit, claim or proceeding pending to which the Company or any
Subsidiary is a party or of which any property or assets of the Company or any Subsidiary is
the subject which is required to be described in the Registration Statement, the General
Disclosure Package or the Prospectus or a document incorporated by reference therein and is
not described therein, or which, singularly or in the aggregate, if determined adversely to
the Company or any Subsidiary would reasonably be expected to have a Material Adverse Effect
or prevent the consummation of the transactions contemplated hereby; and to the Company’s
knowledge, no such proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(u) Neither the Company nor any Subsidiary is in (i) violation of its charter or
by-laws (or analogous governing instrument, as applicable), (ii) default in any respect, and
no event has occurred which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which it is a party or by which it is bound or to which any of its property or
assets is subject or (iii) violation in any respect of any law, ordinance, governmental
rule, regulation or court order, decree or judgment to which it or its property or assets
may be subject except, in the case of clauses (ii) and (iii) of this paragraph (t), for any
violations or defaults which, singly or in the aggregate, would not have a Material Adverse
Effect.
(v) The pre-clinical studies conducted by or on behalf of or sponsored by the Company
or any Subsidiary that are described in the General Disclosure Package and Prospectus or the
results of which are referred to in the General Disclosure Package or Prospectus were and,
if still pending, are being conducted in all material respects in accordance with scientific
research procedures that the Company reasonably believes are appropriate. The descriptions
in the General Disclosure Package and Prospectus of the
results of such studies are accurate
in all material respects and fairly present the data derived from such studies, and the
Company has no knowledge of any studies or tests performed by or on behalf of the Company or
any Subsidiary the results of which are materially inconsistent with or otherwise materially
call into question the results described or referred to in the General Disclosure Package
and Prospectus.
(w) The Company and each Subsidiary possesses all licenses, certificates,
authorizations and permits issued by, and has made all declarations and filings with, the
appropriate local, state, federal or foreign regulatory agencies or bodies which are
necessary for the ownership of its properties or the conduct of its business as currently
conducted or as described in the General Disclosure Package and the Prospectus
(collectively, the “Governmental Permits”), except where any failures to possess or make the
same, singly or in the aggregate, would not have a Material Adverse Effect. The Company and
each Subsidiary is in compliance with all such Governmental Permits and all such
Governmental Permits are valid and in full force and effect, except where the
non-compliance, invalidity or failure to be in full force and effect would not, singly or in
the aggregate, have a Material Adverse Effect. All such Governmental Permits are free and
clear of any restriction or condition that are in addition to, or materially different from
those normally applicable to similar licenses, certificates, authorizations and permits,
except for such restrictions, conditions or differences which would not, singly or in the
aggregate, have a Material Adverse Effect. Neither the Company nor any Subsidiary has
received notification of any revocation or modification (or proceedings related thereto) of
any such Governmental Permit and the Company has no reason to believe that any such
Governmental Permit will not be renewed.
(x) Neither the Company nor any Subsidiary is and, after giving effect to the Offering
and the application of the proceeds thereof as described in the General Disclosure Package
and the Prospectus, will not become an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the Commission
thereunder.
(y) Neither the Company nor any Subsidiary, nor to the Company’s knowledge, any of the
Company’s or any Subsidiary’s officers, directors or affiliates has taken or will take,
directly or indirectly, any action designed or intended to stabilize or manipulate the price
of any security of the Company, or which caused or resulted in, or which might in the future
reasonably be expected to cause or result in, stabilization or manipulation of the price of
any security of the Company.
(z) The Company and each Subsidiary owns or possesses the right to use all material
patents, trademarks, trademark registrations, service marks, service ▇▇▇▇ registrations,
trade names, copyrights, licenses, inventions, software, databases, know-how, Internet
domain names, trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures, and other intellectual property
(collectively, “Intellectual Property”) necessary to carry on their respective businesses as
currently conducted or as described in the General Disclosure Package and the Prospectus,
and the Company is not aware of any claim to the contrary or any challenge by any other
person to the rights of the Company or any Subsidiary with
respect to the foregoing except
for those that would not reasonably be expected to have a Material Adverse Effect. The
Intellectual Property licenses described in the General Disclosure Package and the
Prospectus are valid, binding upon, and enforceable by or against the parties thereto in
accordance to their terms. The Company and each Subsidiary has complied in all material
respects with, and is not in breach of, nor has it received any asserted or threatened claim
of breach of, any Intellectual Property license, and the Company has no knowledge of any
breach or anticipated breach by any other person to any such Intellectual Property license.
The Company’s and each Subsidiary’s business as now conducted and as proposed to be
conducted does not and will not infringe or conflict with any valid patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses or other Intellectual
Property or franchise right of any person. Except as disclosed in Preliminary Prospectus,
the Company has not received notice that any claim has been made against the Company or any
Subsidiary alleging the infringement by the Company or any Subsidiary of any patent,
trademark, service ▇▇▇▇, trade name, copyright, trade secret, license in or other
intellectual property right or franchise right of any person. The Company and each
Subsidiary has taken all reasonable steps to protect, maintain and safeguard its rights in
all Intellectual Property, including the execution of appropriate nondisclosure and
confidentiality agreements. The consummation of the transactions contemplated by this
Agreement will not result in the loss or impairment of or payment of any additional amounts
with respect to, nor require the consent of any other person in respect of, each of the
Company’s and each Subsidiary’s right to own, use, or hold for use any of the Intellectual
Property as owned, used or held for use in the conduct of its business as currently
conducted. With respect to the use of software developed by the Company or any Subsidiary
in the business of the Company or any Subsidiary as it is currently conducted, neither the
Company nor any Subsidiary has experienced any material defects in such software other than
defects which have been or will be corrected, and no such software contains any device or
feature designed to disrupt, disable, or otherwise impair the functioning of any software or
is subject to the terms of any “open source” or other similar license that provides for the
source code of the software to be publicly distributed or dedicated to the public. The
Company and each Subsidiary has at all times complied with all applicable laws relating to
privacy, data protection, and the collection and use of personal information collected,
used, or held for use by the Company or any Subsidiary in the conduct of the Company’s or
any Subsidiary’s business. The Company has received no notice of any claims asserted or
threatened against the Company or any Subsidiary alleging a violation of any law related to
privacy, data protection, or the collection and use of personal information collected, used,
or held for use by the Company or any Subsidiary in the conduct of the Company’s or any
Subsidiary’s business. The Company and each Subsidiary takes reasonable measures to ensure
that such information is protected against unauthorized access, use, modification, or other
misuse.
(aa) The Company and each Subsidiary has good and marketable title in fee simple to, or
has valid rights to lease or otherwise use, all items of real or personal property which are
material to the business of the Company and any Subsidiary as currently conducted, in each
case free and clear of all liens, encumbrances, security interests, claims and defects,
other than those that do not, singly or in the aggregate, materially affect the value of
such property and do not interfere with the use made and
proposed to be made of such
property by the Company or any Subsidiary; and all of the leases and subleases material to
the business of the Company or any Subsidiary, and under which the Company or any Subsidiary
holds properties described in the General Disclosure Package and the Prospectus, are in full
force and effect, and neither the Company nor any Subsidiary has received any notice of any
material claim of any sort that has been asserted by anyone adverse to the rights of the
Company or any Subsidiary under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or any Subsidiary to the continued possession of
the leased or subleased premises under any such lease or sublease.
(bb) No labor disturbance by the employees of the Company or any Subsidiary exists or,
to the Company’s knowledge, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any Subsidiary’s principal
suppliers, manufacturers, customers or contractors, that would reasonably be expected,
singularly or in the aggregate, to have a Material Adverse Effect. The Company is not aware
that any key employee or significant group of employees of the Company or any Subsidiary
plans to terminate employment with the Company or any Subsidiary.
(cc) No “prohibited transaction” (as defined in Section 406 of the Employee Retirement
Income Security Act of 1974, as amended, including the regulations and published
interpretations thereunder (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986,
as amended from time to time (the “Code”)) or “accumulated funding deficiency” (as defined
in Section 302 of ERISA) or any of the events set forth in Section 4043(b) of ERISA (other
than events with respect to which the thirty (30)-day notice requirement under Section 4043
of ERISA has been waived) has occurred or would reasonably be expected to occur with respect
to any employee benefit plan of the Company or any Subsidiary which would, singly or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each employee benefit
plan of the Company or any Subsidiary is in compliance in all material respects with
applicable law, including ERISA and the Code. The Company and each Subsidiary has not
incurred and would not reasonably be expected to incur liability under Title IV of ERISA
with respect to the termination of, or withdrawal from, any pension plan (as defined in
ERISA). Each pension plan for which the Company or any Subsidiary would have any liability
that is intended to be qualified under Section 401(a) of the Code is so qualified, and
nothing has occurred, whether by action or by failure to act, which would, singly or in the
aggregate, reasonably be expected to cause the loss of such qualification.
(dd) The Company and each Subsidiary is in compliance with all foreign, federal, state
and local rules, laws and regulations relating to the use, treatment, storage and disposal
of hazardous or toxic substances or waste and protection of health and safety or the
environment which are applicable to its business (“Environmental Laws”), except where the
failure to comply would not, singularly or in the aggregate, have a Material Adverse Effect.
There has been no storage, generation, transportation, handling, treatment, disposal,
discharge, emission, or other release of any kind of toxic or other wastes or other
hazardous substances by, due to, or caused by the Company or any Subsidiary (or, to the
Company’s knowledge, any other entity for whose acts or
omissions the Company or any
Subsidiary is or may otherwise be liable) upon any of the property now or previously owned
or leased by the Company or any Subsidiary, or upon any other property, in violation of any
law, statute, ordinance, rule, regulation, order, judgment, decree or permit or which would,
under any law, statute, ordinance, rule (including rule of common law), regulation, order,
judgment, decree or permit, give rise to any liability, except for any violation or
liability which would not have, singularly or in the aggregate with all such violations and
liabilities, a Material Adverse Effect; and there has been no disposal, discharge, emission
or other release of any kind onto such property or into the environment surrounding such
property of any toxic or other wastes or other hazardous substances with respect to which
the Company has knowledge, except for any such disposal, discharge, emission, or other
release of any kind which would not have, singularly or in the aggregate with all such
discharges and other releases, a Material Adverse Effect. In the ordinary course of
business, the Company conducts periodic reviews of the effect of Environmental Laws on its
business and assets, in the course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or Governmental
Permits issued thereunder, any related constraints on operating activities and any potential
liabilities to third parties). On the basis of such reviews, the Company has reasonably
concluded that such associated costs and liabilities would not have, singularly or in the
aggregate, a Material Adverse Effect.
(ee) The Company and each Subsidiary (i) has timely filed or been granted extensions
for all necessary federal, state, local and foreign tax returns, and all such returns were
true, complete and correct, (ii) has paid all federal, state, local and foreign taxes,
assessments, governmental or other charges due and payable for which it is liable,
including, without limitation, all sales and use taxes and all taxes which the Company or
any Subsidiary is obligated to withhold from amounts owing to employees, creditors and third
parties, and (iii) does not have any tax deficiency or claims outstanding or assessed or, to
the best of its knowledge, proposed against any of them, except those, in each of the cases
described in clauses (i), (ii) and (iii) of this paragraph (bb), that would not, singularly
or in the aggregate, have a Material Adverse Effect. The Company and each Subsidiary has
not engaged in any transaction which is a corporate tax shelter or which could be
characterized as such by the Internal Revenue Service or any other taxing authority. The
accruals and reserves on the books and records of the Company and each Subsidiary in respect
of tax liabilities for any taxable period not yet finally determined are adequate to meet
any assessments and related liabilities for any such period, and since December 31, 2010
neither Company nor any Subsidiary has incurred any liability for taxes other than in the
ordinary course.
(ff) The Company and each Subsidiary carries, or is covered by, insurance provided by
recognized, financially sound and reputable institutions with policies in such amounts and
covering such risks as the Company deems adequate for the conduct of the business of the
Company or any Subsidiary and the value of their respective properties and as is customary
for companies engaged in similar businesses in similar industries. The Company has no
reason to believe that it or any Subsidiary will not be able (i) to renew its existing
insurance coverage as and when such coverage expires or (ii) to obtain
comparable coverage
from similar institutions as may be necessary to conduct their respective businesses as now
conducted and at a cost that would not result in a Material Adverse Effect. Neither the
Company nor any Subsidiary has been denied any insurance coverage that it has sought or for
which it has applied.
(gg) The Company and each Subsidiary maintains a system of internal accounting and
other controls sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of financial statements in
conformity with GAAP 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. Except as
described in the General Disclosure Package, since the end of the Company’s most recent
audited fiscal year, there has been (A) no material weakness in the Company’s internal
control over financial reporting (whether or not remediated) and (B) 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.
(hh) The minute books of the Company and each Subsidiary have been made available to
the Underwriter and counsel for the Underwriter, and such books (i) contain a complete
summary of all meetings and actions of the board of directors (including each board
committee) and stockholders of the Company and each Subsidiary (or analogous governing
bodies and interest holders, as applicable) since the time of its respective incorporation
or organization through the date of the latest meeting and action, and (ii) accurately in
all material respects reflect all actions referred to in such minutes or written consents.
(ii) To the Company’s knowledge, there is no franchise, lease, contract, agreement or
document required by the Securities Act or by the Rules and Regulations to be described in
the General Disclosure Package and in the Prospectus or a document incorporated by reference
therein or to be filed as an exhibit to the Registration Statement or a document
incorporated by reference therein which is not described or filed therein as required; and
all descriptions of any such franchises, leases, contracts, agreements or documents
contained in the Registration Statement, the General Disclosure Package or in any document
incorporated by reference therein are accurate and complete descriptions of such documents
in all material respects. Other than as described in the General Disclosure Package, no
such franchise, lease, contract or agreement has been suspended or terminated for
convenience or default by the Company or any Subsidiary or any of the other parties thereto,
and neither the Company nor any Subsidiary has received notice nor does the Company have any
other knowledge of any such pending or threatened suspension, termination or non-renewal,
except for such pending or threatened suspensions, terminations or non-renewals that would
not reasonably be expected to, singly or in the aggregate, have a Material Adverse Effect.
(jj) No relationship, direct or indirect, exists between or among the Company or any
Subsidiary on the one hand, and the directors, officers, stockholders (or analogous interest
holders), customers or suppliers of the Company or any Subsidiary or any of their affiliates
on the other hand that is required to be described in the General Disclosure Package and the
Prospectus or a document incorporated by reference therein and that is not so described.
(kk) Neither the Company nor any Subsidiary owns any “margin securities” as that term
is defined in Regulation U of the Board of Governors of the Federal Reserve System (the
“Federal Reserve Board”), and none of the proceeds of the Offering will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin security, for the purpose
of reducing or retiring any indebtedness which was originally incurred to purchase or carry
any margin security or for any other purpose which might cause any of the Securities to be
considered a “purpose credit” within the meanings of Regulation T, U or X of the Federal
Reserve Board.
(ll) Neither the Company nor any Subsidiary is a party to any contract, agreement or
understanding with any person that would give rise to a valid claim against the Company or
any Subsidiary or the Underwriter for a brokerage commission, finder’s fee or like payment
in connection with the Offering or any transaction contemplated by this Agreement, the
Registration Statement, the General Disclosure Package or the Prospectus.
(mm) No forward-looking statement (within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act) contained in either the General Disclosure Package
or the Prospectus has been made or reaffirmed without a reasonable basis or has been
disclosed other than in good faith.
(nn) The Company is subject to and in compliance in all material respects with the
reporting requirements of Section 13 or Section 15(d) of the Exchange Act. The Common Stock
is registered pursuant to Section 12(b) of the Exchange Act and is listed on the Nasdaq CM,
and the Company has taken no action designed to, or reasonably likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or delisting the
Common Stock from the Nasdaq CM, nor has the Company received any notification that the
Commission or FINRA is contemplating terminating such registration or listing. No consent,
approval, authorization or order of, or filing, notification or registration with, the
Nasdaq CM is required for the listing and trading of the Shares and the Warrant Shares on
the Nasdaq CM, except for (i) a Notification Form: Listing of Additional Shares and (ii) a
Notification Form: Change in the Number of Shares Outstanding.
(oo) The Company is in material compliance with all provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”) which are applicable to it.
(pp) The Company is in material compliance with all applicable corporate governance
requirements set forth in the Nasdaq Capital Marketplace Rules.
(qq) Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any
employee or agent of the Company or any Subsidiary, has made any contribution or other
payment to any official of, or candidate for, any federal, state, local or foreign office in
violation of any law (including the Foreign Corrupt Practices Act of 1977, as amended) or of
the character required to be disclosed in the Registration Statement, the General Disclosure
Package or the Prospectus or a document incorporated by reference therein.
(rr) There are no transactions, arrangements or other relationships between and/or
among the Company or any Subsidiary, any of their respective affiliates (as such term is
defined in Rule 405 of the Securities Act) and any unconsolidated entity, including, but not
limited to, any structured finance, special purpose or limited purpose entity that would
reasonably be expected to materially affect the Company’s or any Subsidiary’s liquidity or
the availability of or requirements for its capital resources, which transaction,
arrangement or other relationship is required to be described in the General Disclosure
Package and the Prospectus or any document incorporated by reference therein that has not
been described as required.
(ss) There are no outstanding loans, advances (except normal advances for business
expenses in the ordinary course of business) or guarantees of indebtedness by the Company or
any Subsidiary to or for the benefit of any of the officers or directors of the Company or
any Subsidiary.
(tt) The statistical and market related data included in the Registration Statement,
the General Disclosure Package and the Prospectus are based on or derived from sources that
the Company believes to be reliable and accurate, and such data agree with the sources from
which they are derived.
(uu) The operations of the Company and each Subsidiary 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, applicable money
laundering statutes and applicable rules and regulations thereunder (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 or any
Subsidiary with respect to the Money Laundering Laws is pending, or to the Company’s
knowledge, threatened.
(vv) Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any
director, officer, agent, employee or affiliate of the Company or any Subsidiary 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 the 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.
(ww) Except as disclosed by the Company to the Underwriter, neither the Company nor any
Subsidiary nor, to the knowledge of the Company, any of their respective affiliates (within
the meaning of FINRA’s NASD Conduct Rule 2720(f)(1)) directly or indirectly controls, is
controlled by, or is under common control with, or is an associated person (within the
meaning of Article I, Section 1(ee) of the By-laws of FINRA) of, any member firm of FINRA.
(xx) The Company is, and will be immediately following this Offering, in compliance
with the rules for the use of a registration statement on Form S-3 as set forth in
Instruction I.B.1, and is not, as of the date hereof, subject to the limitations under I.B.6
of Form S-3.
(yy) No approval of the stockholders of the Company under the rules and regulations of
Nasdaq (including Rule 5635 of the Nasdaq Capital Marketplace Rules) is required for the
Company to issue and deliver to the Underwriter the Shares and the Warrants.
Any certificate signed by or on behalf of the Company and delivered to the Underwriter or to
counsel for the Underwriter shall be deemed to be a representation and warranty by the Company to
the Underwriter as to the matters covered thereby.
4. Further Agreements of the Company. The Company agrees with the
Underwriter:
(a) To prepare the Rule 462(b) Registration Statement, if necessary, in a form approved
by the Underwriter and file such Rule 462(b) Registration Statement with the Commission on
the date hereof; to prepare the Prospectus in a form approved by the Underwriter containing
information previously omitted at the time of effectiveness of the Registration Statement in
reliance on Rules 430A, 430B or 430C of the Rules and Regulations and to file such
Prospectus pursuant to Rule 424(b) of the Rules and Regulations not later than the second
(2nd) business day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A of the Rules and Regulations;
to promptly notify the Underwriter of the Company’s intention to file or prepare any
supplement or amendment to any Registration Statement or to the Prospectus in connection
with the Offering and to make no amendment or supplement to the Registration Statement, the
General Disclosure Package or to the Prospectus to which the Underwriter shall reasonably
object by notice to the Company after a reasonable period to review; to advise the
Underwriter, promptly after it receives notice thereof, of the time when any amendment to
any Registration Statement has been filed or becomes effective or any supplement to the
General Disclosure Package or the Prospectus or any amended Prospectus has been filed and to
furnish the Underwriter with copies thereof; to file within the time periods prescribed by
the Exchange Act, including any extension thereof, all material required to be filed by the
Company with the Commission pursuant to Rules 433(d) or 163(b)(2) of the Rules and
Regulations, as the case may be; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus (or in lieu thereof, the notice
referred to in Rule 173(a) of the Rules and Regulations) is required in connection with the
Offering; to advise the Underwriter, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus, of
the suspension of the qualification of the Securities for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the Registration
Statement, the General Disclosure Package or the Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus
or suspending any such qualification, and promptly to use its best efforts to obtain the
withdrawal of such order.
(b) The Company represents and agrees that it has not made and, unless it obtains the
prior consent of the Underwriter, it will not make any offer relating to the Units that
would constitute a “free writing prospectus” as defined in Rule 405 of the Rules and
Regulations (each, a “Permitted Free Writing Prospectus”); provided that the prior written
consent of the Underwriter hereto shall be deemed to have been given in respect of the
General Use Free Writing Prospectus , if any, included in Schedule A hereto. The
Company represents that it has treated and agrees that it will treat each Permitted Free
Writing Prospectus as an Issuer Free Writing Prospectus, comply with the requirements of
Rules 164 and 433 of the Rules and Regulations applicable to any Issuer Free Writing
Prospectus, including the requirements relating to timely filing with the Commission,
legending and record keeping and will not take any action that would result in the
Underwriter or the Company being required to file with the Commission pursuant to Rule
433(d) of the Rules and Regulations a free writing prospectus prepared by or on behalf of
the Underwriter that the Underwriter otherwise would not have been required to file
thereunder.
(c) If at any time when a Prospectus relating to the Shares and Warrants contained in
the Units is required to be delivered under the Securities Act, any event occurs or
condition exists as a result of which the Prospectus, as then amended or supplemented, would
include any untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in light of the circumstances under which they were
made, not misleading, or the Registration Statement, as then amended or supplemented, would
include any untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein not misleading, or if for any other reason it is necessary at
any time to amend or supplement any Registration Statement or the Prospectus or to file
under the Exchange Act any document incorporated by reference in the Prospectus to comply
with the Securities Act or the Exchange Act, the Company will promptly notify the
Underwriter, and upon the Underwriter’s request, the Company will promptly prepare and file
with the Commission, at the Company’s expense, an amendment to the Registration Statement or
an amendment or supplement to the Prospectus or make an appropriate filing under Section 13
or 14 of the Exchange Act that corrects such statement or omission or effects such
compliance and will deliver to the Underwriter, without charge, such number of copies
thereof as the
Underwriter may reasonably request. The Company consents to the use of the
Prospectus or any amendment or supplement thereto by the Underwriter.
(d) If the General Disclosure Package is being used to solicit offers to buy the Units
at a time when the Prospectus is not yet available to prospective purchasers and any event
shall occur as a result of which, in the judgment of the Company or in the reasonable
opinion of the Underwriter, it becomes necessary to amend or supplement the General
Disclosure Package in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or to make the statements therein
not conflict with the information contained or incorporated by reference in the Registration
Statement then on file and not superseded or modified, or if it is necessary at any time to
amend or supplement the General Disclosure Package to comply with any law, the Company
promptly will either (i) prepare, file with the Commission (if required) and furnish to the
Underwriter and any dealers an appropriate amendment or supplement to the General Disclosure
Package or (ii) prepare and file with the Commission an appropriate filing under the
Exchange Act which shall be incorporated by reference in the General Disclosure Package so
that the General Disclosure Package as so amended or supplemented will not, in the light of
the circumstances under which they were made, be misleading or conflict with the
Registration Statement then on file, or so that the General Disclosure Package will comply
with law.
(e) If at any time following issuance of an Issuer Free Writing Prospectus in
connection with the Offering there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus conflicted or will conflict with the information
contained in the Registration Statement, Pricing Prospectus or Prospectus, including any
document incorporated by reference therein and any prospectus supplement deemed to be a part
thereof and not superseded or modified or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, the Company has promptly notified
or will promptly notify the Underwriter (and the Underwriter agrees to cease such use
promptly upon such notification) so that any use of the Issuer Free Writing Prospectus may
cease until it is amended or supplemented and has promptly amended or will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission. The foregoing sentence does not apply to
statements in or omissions from any Issuer Free Writing Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by the Underwriter
specifically for inclusion therein, which information the parties hereto agree is limited to
the Underwriter’s Information (as defined in Section 17).
(f) To the extent not available on the Commission’s Electronic Data Gathering, Analysis
and Retrieval (“▇▇▇▇▇”) system or any successor system, to furnish promptly to the
Underwriter and to counsel for the Underwriter, a signed copy of the Registration Statement
as originally filed with the Commission, and of each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith.
(g) To the extent not available on the Commission’s ▇▇▇▇▇ system or any successor
system, to deliver promptly to the Underwriter such number of the following documents as the
Underwriter shall reasonably request: (i) conformed copies of the Registration Statement as
originally filed with the Commission (in each case excluding exhibits), (ii) any Preliminary
Prospectus, (iii) any Issuer Free Writing Prospectus, (iv) the Prospectus (the delivery of
the documents referred to in clauses (i), (ii), (iii) and (iv) of this paragraph (g)
to be made not later than 10:00 A.M., New York time, on the business day following the
execution and delivery of this Agreement), (v) conformed copies of any amendment to the
Registration Statement (excluding exhibits), (vi) any amendment or supplement to the General
Disclosure Package or the Prospectus (the delivery of the documents referred to in clauses
(v) and (vi) of this paragraph (g) to be made not later than 10:00 A.M., New York
City time, on the business day following the date of such amendment or supplement) and (vii)
any document incorporated by reference in the General Disclosure Package or the Prospectus
(excluding exhibits thereto) (the delivery of the documents referred to in clause (vi) of
this paragraph (g) to be made not later than 10:00 A.M., New York City time, on the
business day following the date of such document).
(h) To make generally available to its stockholders as soon as practicable, but in any
event not later than eighteen (18) months after the effective date of each Registration
Statement, an earning statement (as defined in Rule 158(c) of the Rules and Regulations) of
the Company and its Subsidiaries (which need not be audited) complying with Section 11(a) of
the Securities Act and the Rules and Regulations (including, at the option of the Company,
Rule 158).
(i) To take promptly from time to time such actions as the Underwriter may reasonably
request to qualify any of the Securities for offering and sale under the securities or Blue
Sky laws of such jurisdictions (domestic or foreign) as the Underwriter may reasonably
designate and to continue such qualifications in effect, and to comply with such laws, for
so long as required for the distribution of any of the Securities; provided that the Company
shall not be obligated to qualify as a foreign corporation in any jurisdiction in which it
is not so qualified or to file a general consent to service of process in any jurisdiction.
(j) Upon request, during the period of three (3) years from the date hereof, to the
extent not available on the Commission’s ▇▇▇▇▇ system, the Company will deliver to the
Underwriter, (i) upon request, copies of all reports or other communications furnished to
stockholders and (ii) upon request, copies of any reports and financial statements furnished
or filed with the Commission pursuant to the Exchange Act or any national securities
exchange or automatic quotation system on which the Common Stock is listed or quoted.
(k) That the Company will not, for a period of thirty (30) days from the date of this
Agreement, (the “Lock-Up Period”) without the prior written consent of the Underwriter,
directly or indirectly offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock at an effective price per share less than
the Public Offering
Price, other than (i) the Securities, (ii) the issuance of Common Stock, restricted Common
Stock or options to acquire Common Stock in each case pursuant to the Company’s employee
benefit plans, qualified stock option plans, employee stock purchase plan or other employee
compensation plans as such plans are in existence on the date hereof and described in the
Prospectus, (iii) the issuance of Common Stock pursuant to the valid exercises of options,
warrants or rights outstanding on the date hereof and (iv) the issuance of securities of the
Company in connection with collaboration, licensing or business development transactions,
mergers or acquisitions, any reorganization, spin off, recapitalization or similar
transaction. The Company will cause (i) each executive officer and director listed in
Schedule B to furnish to the Underwriter, prior to the Closing Date, a letter,
substantially in the form of Exhibit B hereto and (ii) the former stockholders of
Apthera listed on Schedule C to furnish to the Underwriter, prior to the Closing
Date, a letter, substantially in the form of Exhibit C hereto. The Company also
agrees that during the Lock-Up Period, the Company will not file any registration statement,
other than the resale registration statement to be filed pursuant to Section 6.15 of the
Merger Agreement, preliminary prospectus or prospectus, or any amendment or supplement
thereto, under the Securities Act for any such transaction or which registers, or offers for
sale, Common Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, except for a registration statement on Form S-8 relating to employee benefit
plans. The Company hereby agrees that (i) if it issues an earnings release or material
news, or if a material event relating to the Company occurs, during the last seventeen (17)
days of the Lock-Up Period, or (ii) if prior to the expiration of the Lock-Up Period, the
Company announces that it will release earnings results during the sixteen (16)-day period
beginning on the last day of the Lock-Up Period, unless waived by the Underwriter, the
restrictions imposed by this paragraph (k) or the letter shall continue to apply
until the expiration of the eighteen (18)-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
(l) To supply the Underwriter with copies of all correspondence to and from, and all
documents issued to and by, the Commission in connection with the registration of the Shares
and Warrants contained in the Units under the Securities Act or the Registration Statement,
any Preliminary Prospectus or the Prospectus, or any amendment or supplement thereto or
document incorporated by reference therein.
(m) Prior to the Closing Date, to furnish to the Underwriter, promptly after they have
been prepared (to the extent they have been prepared), copies of any unaudited interim
consolidated financial statements of the Company for any periods subsequent to the periods
covered by the financial statements appearing in or incorporated by reference into the
Registration Statement and the Prospectus.
(n) Prior to the Closing Date, not to issue any press release or other communication
directly or indirectly or hold any press conference with respect to the Company, its
condition, financial or otherwise, or earnings, business affairs or business prospects
(except for routine oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company), without the prior written consent of the
Underwriter, which consent shall not be unreasonably withheld,
conditioned or delayed,
unless in the judgment of the Company and its counsel, and after notification to the
Underwriter, such press release or communication is required by law or applicable stock
exchange rules.
(o) Until the Underwriter shall have notified the Company of the completion of the
Offering, the Company will not, and will cause its affiliated purchasers (as defined in
Regulation M under the Exchange Act) not to, either alone or with one or more other persons,
bid for or purchase, for any account in which it or any of its affiliated purchasers has a
beneficial interest, any Shares and Warrants contained in the Units, or attempt to induce
any person to purchase any Shares and Warrants contained in the Units; and not to, and to
cause its affiliated purchasers not to, make bids or purchases for the purpose of creating
actual, or apparent, active trading in or of raising the price of the Shares.
(p) Not to take any action prior to the Closing Date that would require the Prospectus
to be amended or supplemented pursuant to Section 4.
(q) To at all times comply in all material respects with all applicable provisions of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act in effect from time to time.
(r) To apply the net proceeds from the Offering as set forth in the Registration
Statement, the General Disclosure Package and the Prospectus under the heading “Use of
Proceeds.”
(s) To use its best efforts to file and obtain conditional and final clearance from
FINRA, or to assist the Underwriter with any filings with FINRA and obtaining final
clearance from FINRA, as to the Registration Statement and the Prospectus and as to amount
of compensation allowable or payable to the Underwriter.
(t) To use its commercially reasonable best efforts to list, effect and maintain,
subject to notice of issuance, the Common Stock on the Nasdaq CM.
(u) To use its commercially reasonable best efforts to do and perform all things
required to be done or performed under this Agreement by the Company prior to the Closing
Date and to satisfy all conditions precedent to the delivery of the Shares and the Warrants,
if any
(v) Promptly following the Closing Date, the Company shall take all corporate action
necessary to call a meeting of its stockholders (which may be its annual meeting) (the
“Stockholders Meeting”), which shall occur not later than July 31, 2011, for the purpose of
seeking approval of the Company’s stockholders to amend the Company’s Certificate of
Incorporation to increase the Company’s authorized Common stock from 50,000,000 shares to
100,000,000 shares (the “Increased Shares Amendment”). In connection therewith, the Company
will as soon as reasonably practicable after the Closing Date file with the Commission proxy
materials (including a proxy statement and form of proxy) for use at the Stockholders
Meeting and, after receiving and promptly responding to any comments of the Commission
thereon, shall as soon as reasonably practicable mail such proxy materials to the
stockholders of the Company. The Company will comply with Section 14(a) of the Exchange Act
and the
rules promulgated thereunder in relation to any proxy statement (as amended or
supplemented, the “Proxy Statement”) and any form of proxy to be sent to the stockholders of
the Company in connection with the Stockholders Meeting, and the Proxy Statement shall not,
on the date that the Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to stockholders or at the time of the Stockholders Meeting, contain any untrue
statement of a material fact or omit to state any material fact necessary in order to make
the statements made therein not false or misleading, or omit to state any material fact
necessary to correct any statement in any earlier communication with respect to the
solicitation of proxies or the Stockholders Meeting which has become false or misleading.
If the Company should discover at any time prior to the Stockholders Meeting, any event
relating to the Company or the Subsidiary or any of their respective affiliates, officers or
directors that is required to be set forth in a supplement or amendment to the Proxy
Statement, in addition to the Company’s obligations under the Exchange Act, the Company will
promptly inform the Underwriter thereof. The Company’s Board of Directors shall recommend
to the Company’s stockholders that the stockholders vote in favor of the Increased Shares
Amendment at the Stockholders Meeting and take all commercially reasonable action
(including, without limitation, the hiring of a proxy solicitation firm of nationally
recognized standing) to solicit the approval of the stockholders for the Increased Shares
Amendment. No later than two (2) business days following stockholder approval of the
Increased Shares Amendment, the Company shall file with the Secretary of State of Delaware a
certificate of amendment to the Company’s Certificate of Incorporation to effect the
Increased Shares Amendment, which certificate of amendment shall provide that it shall
become immediately effective upon filing. The Company shall issue a press release
announcing the effectiveness of the Increased Shares Amendment no later than one (1)
business day after such filing. The date on which the Increased Shares Amendment becomes
effective is referred to herein as the “Authorized Shares Increase Date.”
(w) No later than five (5) business days after the Authorized Shares Increase Date, the
Company shall file with the Commission a registration statement (which shall be on Form S-3
unless the Company is not then eligible to use Form S-3 to register the Warrant Shares) for
the registration under the Securities Act of the Warrant Shares (the “Additional
Registration Statement”). The Company shall use its commercially reasonable efforts to cause
the Additional Registration Statement to become effective as promptly as practicable and in
no event later than the time that the Warrants first become exercisable in accordance with
their terms and shall use its commercially reasonable efforts to maintain the effectiveness
and availability of such registration statement until the earlier of (i) the expiration of
the Warrants in accordance with their terms or (ii) the time no Warrants remain outstanding.
The indemnification provisions contained in Section 7 hereof shall apply to the Additional
Registration Statement. The Company shall take all commercially reasonable action to
include the Warrant Shares for listing on the Nasdaq CM or for listing or quotation on such
exchange or trading market on which the Common Stock is then listed or quoted on or prior to
the date that the Warrants first become exercisable in accordance with their terms.
Notwithstanding the provisions of this clause (w), the Company shall not be required to file
or maintain the effectiveness of an Additional Registration Statement in the event that the
Company delivers to the
Underwriter an opinion (in form and substance reasonably satisfactory to the Underwriter) of
outside counsel to the Company reasonably satisfactory to the Underwriter to the effect that
the issuance of the Warrant Shares to the holders of the Warrants is exempt from the
registration requirements of the Securities Act and may be freely resold by any holder of
Warrants that is not an affiliate of the Company at the time of exercise without further
registration under the Securities Act pursuant to either (i) a cashless exercise effected
pursuant to Section 2(c) of the Warrants or (ii) an exemption from registration under the
Securities Act (the “Opinion of Counsel”). In the event that the Company determines that it
does not wish to file and maintain the effectiveness of an Additional Registration Statement
in compliance with the terms of this paragraph and delivers the Opinion of Counsel, no later
than two (2) business days after the delivery of such Opinion of Counsel, the Company shall
issue a press release announcing that it has determined not to file and maintain the
effectiveness of an Additional Registration Statement, and explaining in reasonable detail
the basis on which the Warrant Shares may be issued to and freely resold by holders of
Warrants who are not affiliates of the Company upon the exercise of the Warrants.
5. Payment of Expenses. The Company agrees to pay, or reimburse if paid by the Underwriter,
upon consummation of the transactions contemplated hereby: (a) the costs incident to the
authorization, issuance, sale, preparation and delivery of the Shares and the Warrants to the
Underwriter and any taxes payable in that connection; (b) the costs incident to the registration of
the Shares and Warrants contained in the Units under the Securities Act; (c) the costs incident to
the preparation, printing and distribution of the Registration Statement, the Base Prospectus, any
Preliminary Prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package, the
Prospectus, any amendments, supplements and exhibits thereto or any document incorporated by
reference therein and the costs of printing, reproducing and distributing any transaction document
by mail, telex or other means of communications; (d) the reasonable and documented fees and
expenses (including related fees and expenses of counsel for the Underwriter) incurred in
connection with securing any required review by FINRA of the terms of the Offering and any filings
made with FINRA; (e) any applicable listing, quotation or other fees; (f) the reasonable and
documented fees and expenses (including related fees and expenses of counsel to the Underwriter) of
qualifying the Securities under the securities laws of the several jurisdictions as provided in
Section 4(i) and of preparing, printing and distributing wrappers, Blue Sky Memoranda and
Legal Investment Surveys (if any); (g) the cost of preparing and printing stock certificates, if
necessary; (h) all fees and expenses of the registrar and transfer agent of the shares of Common
Stock, (i) the reasonable and documented fees, disbursements and expenses of counsel to the
Underwriter up to an aggregate of $100,000 and (j) all other costs and expenses incident to the
Offering by, or the performance of the obligations of, the Company under this Agreement (including,
without limitation, the reasonable and documented fees and expenses of the Company’s counsel and
the Company’s independent accountants and the travel and other expenses actually incurred by
Company and the Underwriter’s personnel in connection with any “road show” including, without
limitation, any expenses advanced by the Underwriter on the Company’s behalf (which will be
promptly reimbursed)).
6. Conditions to the Obligations of the Underwriter, and the Sale of the Units. The obligations
of the Underwriter hereunder, and the closing of the Offering, are subject to the accuracy, when
made and as of the Applicable Time and on the Closing Date, of the
representations and warranties of the Company contained herein, to the accuracy of the
statements of the Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) The Registration Statement is effective under the Securities Act, and no stop order
suspending the effectiveness of the Registration Statement or any part thereof, preventing
or suspending the use of any Base Prospectus, any Preliminary Prospectus, the Prospectus or
any Permitted Free Writing Prospectus or any part thereof shall have been issued and no
proceedings for that purpose or pursuant to Section 8A under the Securities Act shall have
been initiated or threatened by the Commission, and all requests for additional information
on the part of the Commission (to be included or incorporated by reference in the
Registration Statement or the Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Underwriter; the Rule 462(b) Registration Statement, if any,
any Issuer Free Writing Prospectus, and the Prospectus shall have been filed with the
Commission within the applicable time period prescribed for such filing by, and in
compliance with, the Rules and Regulations and in accordance with Section 4 (a),
and the Rule 462(b) Registration Statement, if any, shall have become effective immediately
upon its filing with the Commission; and, if applicable, FINRA shall have raised no
objection to the fairness and reasonableness of the terms of this Agreement or the
transactions contemplated hereby.
(b) The Underwriter shall not have discovered and disclosed to the Company on or prior
to the Closing Date that the Registration Statement or any amendment or supplement thereto
contains an untrue statement of a fact that, in the opinion of counsel for the Underwriter,
is material or omits to state any fact which, in the opinion of such counsel, is material
and is required to be stated therein or is necessary to make the statements therein not
misleading, or that the General Disclosure Package, any Issuer Free Writing Prospectus or
the Prospectus or any amendment or supplement thereto contains an untrue statement of fact
that, in the opinion of such counsel, is material or omits to state any fact that, in the
opinion of such counsel, is material and is necessary in order to make the statements, in
the light of the circumstances in which they were made, not misleading.
(c) All corporate proceedings and other legal matters incident to the authorization,
form and validity of each of this Agreement, the Securities, the Registration Statement, the
General Disclosure Package, each Issuer Free Writing Prospectus, if any, and the Prospectus
and all other legal matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to counsel for the
Underwriter, and the Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon such matters.
(d) Ropes & ▇▇▇▇ LLP shall have furnished to the Underwriter, such counsel’s written
opinion and negative assurances statement, as counsel to the Company, addressed to the
Underwriter and dated the Closing Date, in the form and substance reasonably satisfactory to
the Underwriter.
(e) Wolf, Greenfield & Sacks, P.C. shall have furnished to the Underwriter, such
counsel’s written opinion, as intellectual property counsel to the Company, addressed to the
Underwriter and dated the Closing Date, in the form and substance reasonably satisfactory to
the Underwriter.
(f) The Underwriter shall have received from ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC, counsel for the
Underwriter, such opinion or opinions and negative assurances statement, addressed to the
Underwriter dated the Closing Date, with respect to such matters as the Underwriter may
reasonably require, and the Company shall have furnished to such counsel such documents as
they request for enabling them to pass upon such matters.
(g) At the time of the execution of this Agreement, the Underwriter shall have received
from BDO ▇▇▇▇▇▇▇ LLP, a letter, addressed to the Underwriter, executed and dated such date,
in form and substance satisfactory to the Underwriter (i) confirming that they are an
independent registered accounting firm with respect to the Company within the meaning of the
Securities Act and the Rules and Regulations and the PCAOB and (ii) stating the conclusions
and findings of such firm, of the type ordinarily included in accountants’ “comfort letters”
to underwriters, with respect to the financial statements and certain financial information
relating to the Company contained or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus.
(h) On the effective date of any post-effective amendment to any Registration Statement
and on the Closing Date, the Underwriter shall have received a letter (the “BDO Bring-Down
Letter”) from BDO ▇▇▇▇▇▇▇ LLP addressed to the Underwriter and dated the Closing Date
confirming, as of the date of the BDO Bring-Down Letter (or, with respect to matters
involving changes or developments since the respective dates as of which specified financial
information is given in the General Disclosure Package and the Prospectus, as the case may
be, as of a date not more than three (3) business days prior to the date of the Bring-Down
Letter), the conclusions and findings of such firm, of the type ordinarily included in
accountants’ “comfort letters” to underwriters, with respect to the financial information
and other matters relating to the Company covered by its letter delivered to the Underwriter
concurrently with the execution of this Agreement pursuant to paragraph (g) of this
Section 6.
(i) At the time of the execution of this Agreement, the Underwriter shall have received
from ▇▇▇▇▇▇ Company, PLLC, a letter, addressed to the Underwriter, executed and dated such
date, in form and substance satisfactory to the Underwriter (i) confirming that they are an
independent certified accounting firm with respect to Apthera within the meaning of the
Securities Act and the Rules and Regulations and (ii) stating the conclusions and findings
of such firm, of the type ordinarily included in accountants’ “comfort letters” to
underwriters, with respect to the financial statements and certain financial information
relating to Apthera contained or incorporated by reference in the Registration Statement,
the General Disclosure Package and the Prospectus.
(j) On the effective date of any post-effective amendment to any Registration Statement
and on the Closing Date, the Underwriter shall have received a letter (the
“▇▇▇▇▇▇ Bring-Down Letter”) from ▇▇▇▇▇▇ Company, PLLC addressed to the Underwriter and
dated the Closing Date confirming, as of the date of the ▇▇▇▇▇▇ Bring-Down Letter (or, with
respect to matters involving changes or developments since the respective dates as of which
specified financial information is given in the General Disclosure Package and the
Prospectus, as the case may be, as of a date not more than three (3) business days prior to
the date of the Bring-Down Letter), the conclusions and findings of such firm, of the type
ordinarily included in accountants’ “comfort letters” to underwriters, with respect to the
financial information and other matters relating to Apthera covered by its letter delivered
to the Underwriter concurrently with the execution of this Agreement pursuant to paragraph
(i) of this Section 6.
(k) The Company shall have furnished to the Underwriter a certificate, dated the
Closing Date, of its President or Chief Executive Officer and its Treasurer stating in their
capacities as officers of the Company that (i) such officers have carefully examined the
Registration Statement, the General Disclosure Package, any Permitted Free Writing
Prospectus and the Prospectus and, in their opinion, the Registration Statement and each
amendment thereto, at the Applicable Time and as of the date of this Agreement and as of the
Closing Date did not include any untrue statement of a material fact and did not omit to
state a material fact required to be stated therein or necessary to make the statements
therein not misleading, and the General Disclosure Package, as of the Applicable Time and as
of the Closing Date, any Permitted Free Writing Prospectus as of its date and as of the
Closing Date, and the Prospectus and each amendment or supplement thereto, as of the
respective date thereof and as of the Closing Date, did not include any untrue statement of
a material fact and did not omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances in which they were made, not
misleading, (ii) since the effective date of the Registration Statement, no event has
occurred that should have been set forth in a supplement or amendment to the Registration
Statement, the General Disclosure Package or the Prospectus that has not been so set forth
therein, (iii) to the best of their knowledge after reasonable investigation, as of the
Closing Date, the representations and warranties of the Company in this Agreement are true
and correct in all material respects (except that to the extent that any representations and
warranties are qualified as to materiality, then such representations and warranties shall
be true and correct in all respects) and the Company has complied in all material respects
with all agreements and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, and (iv) there has not been, subsequent to the
date of the most recent audited financial statements included or incorporated by reference
in the General Disclosure Package, any material adverse change in the financial position or
results of operations of the Company or any Subsidiary, or any change or development that,
singly or in the aggregate, would involve a material adverse change or a prospective
material adverse change, in or affecting the condition (financial or otherwise), results of
operations, business, assets or prospects of the Company or any Subsidiary, except as set
forth in the Prospectus.
(l) Since the date of the latest audited financial statements included in the General
Disclosure Package or incorporated by reference in the General Disclosure Package as of the
date hereof, (i) neither the Company nor any Subsidiary shall have sustained any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth in the General Disclosure
Package, and (ii) there shall not have been any change in the capital stock (other than
Excluded Issuances) or long-term debt of the Company or any Subsidiary, or any change, or
any development involving a prospective change, in or affecting the business, general
affairs, management, financial position, stockholders’ equity or results of operations of
the Company or any Subsidiary, otherwise than as set forth in the General Disclosure
Package, the effect of which, in any such case described in clause (i) or (ii) of this
paragraph (l), is, in the judgment of the Underwriter, so material and adverse as to
make it impracticable or inadvisable to proceed with the sale or delivery of the Shares and
Warrants contained in the Units on the terms and in the manner contemplated in the General
Disclosure Package.
(m) No action shall have been taken and no law, statute, rule, regulation or order
shall have been enacted, adopted or issued by any governmental agency or body which would
prevent the issuance or sale of the Units or materially and adversely affect or potentially
materially and adversely affect the business or operations of the Company or any Subsidiary;
and no injunction, restraining order or order of any other nature by any federal or state
court of competent jurisdiction shall have been issued which would prevent the issuance or
sale of the Units or materially and adversely affect or potentially materially and adversely
affect the business or operations of the Company or any Subsidiary.
(n) Subsequent to the execution and delivery of this Agreement there shall not have
occurred any of the following: (i) trading in securities generally on the New York Stock
Exchange, Nasdaq GM, Nasdaq CM or the NYSE Amex LLC or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the over-the-counter market,
shall have been suspended or materially limited, or minimum or maximum prices or maximum
range for prices shall have been established on any such exchange or such market by the
Commission, by such exchange or market or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been declared by Federal
or state authorities or a material disruption has occurred in commercial banking or
securities settlement or clearance services in the United States, (iii) the United States
shall have become engaged in hostilities, or the subject of an act of terrorism, or there
shall have been an outbreak of or escalation in hostilities involving the United States, or
there shall have been a declaration of a national emergency or war by the United States or
(iv) there shall have occurred such a material adverse change in general economic, political
or financial conditions (or the effect of international conditions on the financial markets
in the United States shall be such) as to make it, in the judgment of the Underwriter,
impracticable or inadvisable to proceed with the sale or delivery of the Shares and Warrants
contained in the Units on the terms and in the manner contemplated in the General Disclosure
Package and the Prospectus.
(o) The Company shall have filed a Notification: Listing of Additional Shares covering
the Shares with the Nasdaq CM and the Company shall not have received an objection thereto
from the Nasdaq CM.
(p) FINRA shall not have objected to the terms of the Offering or the compensation
allowable or payable to the Underwriter as described in the Prospectus.
(q) The Underwriter shall have received (i) the written agreements, substantially in
the form of Exhibit B hereto, of the executive officers and directors of the Company
listed in Schedule B to this Agreement and (ii) the written agreements,
substantially in the form of Exhibit C hereto, of the former Apthera stockholders
listed in Schedule C to this Agreement.
(r) The Company shall have prepared and filed with the Commission a Current Report on
Form 8-K with respect to the Offering, which shall include as an exhibit thereto this
Agreement and a press release related to and describing the material terms of this Offering.
(s) On or prior to the Closing Date, the Company shall have furnished to the
Underwriter such further information, good standing documents, due authorizations and
consents, opinions, certificates, comfort or other letters or documents as the Underwriter
shall have reasonably requested related to the issuance of the Securities.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriter.
7. Indemnification and Contribution. (a) The Company shall indemnify and hold harmless
the Underwriter, each of its affiliates and each of its and their respective directors,
officers, members, employees, representatives and agents and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act (collectively the “Underwriter Indemnified Parties,” and each a
“Underwriter Indemnified Party”) against any loss, claim, damage, expense or liability
whatsoever (or any action, investigation or proceeding in respect thereof), joint or
several, to which such Underwriter Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability,
action, investigation or proceeding arises out of or is based upon (A) any untrue statement
or alleged untrue statement of a material fact contained in any Preliminary Prospectus, any
Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto or document incorporated by reference
therein, (B) the omission or alleged omission to state in any Preliminary Prospectus, any
Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto or document incorporated by reference
therein, a material fact required to be stated therein or necessary to make the statements
therein not misleading, or (C) any breach of the representations and warranties of the
Company contained herein or the failure of the Company to perform its obligations hereunder
or pursuant to any law, and shall reimburse the Underwriter Indemnified Party promptly upon
demand for any legal fees or other expenses reasonably incurred by the Underwriter
Indemnified Party in
connection with investigating, or preparing to defend, or
defending against, or appearing as a third party witness in respect of, or otherwise
incurred in connection with, any such loss, claim, damage, expense, liability, action,
investigation or proceeding, as such fees and expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that any such loss, claim,
damage, expense or liability arises out of or is based upon an untrue statement or alleged
untrue statement in, or omission or alleged omission from any Preliminary Prospectus, any
Registration Statement or the Prospectus, or any such amendment or supplement thereto, or
any Issuer Free Writing Prospectus made in reliance upon and in conformity with written
information furnished to the Company by the Underwriter specifically for use therein, which
information the parties hereto agree is limited to the Underwriter’s Information (as defined
in Section 17). This indemnity agreement in this Section 7(a) is not
exclusive and is and will be in addition to any liability, which the Company might otherwise
have and shall not limit any rights or remedies which may otherwise be available at law or
in equity to each Underwriter Indemnified Party.
(b) The Underwriter shall indemnify and hold harmless the Company and its directors,
its officers who signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act (collectively the “Company Indemnified Parties” and each a “Company Indemnified Party”)
against any loss, claim, damage, expense or liability whatsoever (or any action,
investigation or proceeding in respect thereof), joint or several, to which such Company
Indemnified Party may become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, expense, liability, action, investigation or proceeding arises out of
or is based upon (i) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer
information” filed or required to be filed pursuant to Rule 433(d) of the Rules and
Regulations, any Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary Prospectus,
any Issuer Free Writing Prospectus, any “issuer information” filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto, a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each case only to
the extent that the untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information furnished to
the Company by the Underwriter specifically for use therein, which information the parties
hereto agree is limited to the Underwriter’s Information (as defined in Section 17),
and shall reimburse the Company Indemnified Parties for any legal or other expenses
reasonably incurred by such party in connection with investigating or preparing to defend or
defending against or appearing as third party witness in connection with any such loss,
claim, damage, liability, action, investigation or proceeding, as such fees and expenses are
incurred. This indemnity agreement in this Section 7(b) is not exclusive and will
be in addition to any liability which the Underwriter might otherwise have and shall not
limit any rights or remedies which may otherwise be available at law or in equity to each
Company Indemnified Party. Notwithstanding the provisions of this Section 7(b), in
no event shall
any indemnity by the Underwriter under this Section 7(b) exceed the
total discount and
commission received by the Underwriter in connection with this Offering.
(c) Promptly after receipt by an indemnified party under this Section 7 of
notice of the commencement of any action, the indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 7, notify
such indemnifying party in writing of the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from any liability
which it may have under this Section 7 except to the extent it has been materially
prejudiced by such failure; and, provided, further, that the failure to notify an
indemnifying party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 7. If any such action shall be
brought against an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the defense
of such action with counsel reasonably satisfactory to the indemnified party (which counsel
shall not, except with the written consent of the indemnified party, be counsel to the
indemnifying party). After notice from the indemnifying party to the indemnified party of
its election to assume the defense of such action, except as provided herein, the
indemnifying party shall not be liable to the indemnified party under Section 7 for
any legal or other expenses subsequently incurred by the indemnified party in connection
with the defense of such action other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense of such action but the fees and expenses of
such counsel (other than reasonable costs of investigation) shall be at the expense of such
indemnified party unless (i) the employment thereof has been specifically authorized in
writing by the Company in the case of a claim for indemnification under Section 7(a)
or Section 2.3 or the Underwriter in the case of a claim for indemnification under
Section 7(b), (ii) such indemnified party shall have been advised by its counsel
that there may be one or more legal defenses available to it which are different from or
additional to those available to the indemnifying party, or (iii) the indemnifying party has
failed to assume the defense of such action and employ counsel reasonably satisfactory to
the indemnified party within a reasonable period of time after notice of the commencement of
the action or the indemnifying party does not diligently defend the action after assumption
of the defense, in which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the indemnifying party,
the indemnifying party shall not have the right to assume the defense of (or, in the case of
a failure to diligently defend the action after assumption of the defense, to continue to
defend) such action on behalf of such indemnified party and the indemnifying party shall be
responsible for legal or other expenses subsequently incurred by such indemnified party in
connection with the defense of such action; provided, however, that the indemnifying party
shall not, in connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one separate firm
of attorneys at any time for all such indemnified parties (in addition to any local
counsel), which firm shall be designated in writing by the Underwriter if the indemnified
parties under this Section 7
consist of any Underwriter Indemnified Party or by the
Company if the indemnified
parties under this Section 7 consist of any Company Indemnified Parties.
Subject to this Section 7(c), the amount payable by an indemnifying party under
Section 7 shall include, but not be limited to, (x) reasonable legal fees and
expenses of counsel to the indemnified party and any other expenses in investigating, or
preparing to defend or defending against, or appearing as a third party witness in respect
of, or otherwise incurred in connection with, any action, investigation, proceeding or
claim, and (y) all amounts paid in settlement of any of the foregoing. No indemnifying
party shall, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of judgment with respect to any pending or threatened
action or any claim whatsoever, in respect of which indemnification or contribution could be
sought under this Section 7 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party in form and substance reasonably
satisfactory to such indemnified party from all liability arising out of such action or
claim and (ii) does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party. Subject to the provisions of the
following sentence, no indemnifying party shall be liable for settlement of any pending or
threatened action or any claim whatsoever that is effected without its written consent
(which consent shall not be unreasonably withheld or delayed), but if settled with its
written consent, if its consent has been unreasonably withheld or delayed or if there be a
judgment for the plaintiff in any such matter, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any loss or liability by reason of
such settlement or judgment. In addition, if at any time an indemnified party shall have
requested that an indemnifying party reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated herein effected without its written consent if (i) such settlement is
entered into more than forty-five (45) days after receipt by such indemnifying party of the
request for reimbursement, (ii) such indemnifying party shall have received notice of the
terms of such settlement at least thirty (30) days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(d) If the indemnification provided for in this Section 7 is unavailable or
insufficient to hold harmless an indemnified party under Section 7(a) or Section
7(b), then each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid, payable or otherwise incurred by such indemnified
party as a result of such loss, claim, damage, expense or liability (or any action,
investigation or proceeding in respect thereof), as incurred, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriter on the other hand from the Offering, or (ii) if the allocation
provided by clause (i) of this Section 7(d) is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits referred to in
clause (i) of this Section 7(d) but also the relative fault of the Company on the
one hand and the Underwriter on the other with respect to the statements, omissions, acts or
failures to act which resulted in such loss, claim, damage, expense or liability (or any
action, investigation or proceeding in respect thereof) as well as any other relevant
equitable considerations. The
relative benefits received by the Company on the one hand and
the Underwriter on the
other with respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the Offering under this Agreement (before deducting expenses)
received by the Company bear to the total discount and commission received by the
Underwriter in connection with the Offering, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault of the Company on the one hand and the
Underwriter on the other shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company on the one
hand or the Underwriter on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such untrue
statement, omission, act or failure to act; provided that the parties hereto agree that the
written information furnished to the Company by the Underwriter for use in any Preliminary
Prospectus, any Registration Statement or the Prospectus, or in any amendment or supplement
thereto, consists solely of the Underwriter’s Information as defined in Section 17.
The Company and the Underwriter agree that it would not be just and equitable if
contributions pursuant to this Section 7(d) were to be determined by pro rata
allocation or by any other method of allocation that does not take into account the
equitable considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage, expense, liability, action, investigation or
proceeding referred to above in this Section 7(d) shall be deemed to include, for
purposes of this Section 7(d), any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating, preparing to defend or defending
against or appearing as a third party witness in respect of, or otherwise incurred in
connection with, any such loss, claim, damage, expense, liability, action, investigation or
proceeding. Notwithstanding the provisions of this Section 7(d), the Underwriter
shall not be required to contribute any amount in excess of the total discount and
commission received by the Underwriter in connection with this Offering less the amount of
any damages which the Underwriter has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement, omission or alleged omission, act or alleged act or
failure to act or alleged failure to act. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation.
8. Termination. The obligations of the Underwriter hereunder may be terminated by the
Underwriter, in its absolute discretion by notice given to the Company prior to delivery of and
payment for the Units if, prior to that time, any of the events described in Section 6(l),
Section 6(m) or Section 6(n) have occurred or if the Underwriter shall decline to
purchase the Units for any reason permitted under this Agreement.
9. Reimbursement of Underwriter’s Expenses. Notwithstanding anything to the contrary in this
Agreement, if (a) this Agreement shall have been terminated pursuant to Section 8, (b) the
Company shall fail to tender any of the Shares and Warrants for delivery to the Underwriter for any
reason not permitted under this Agreement, (c) the Underwriter shall decline to purchase the Units
for any reason permitted under this Agreement or (d) the Offering is not
consummated because any
condition to the obligations of the Underwriter set forth herein is not
satisfied or because of the refusal, inability or failure on the part of the Company to
perform any agreement herein or to satisfy any condition or to comply with the provisions hereof,
then in addition to the payment of amounts in accordance with Section 5, the Company shall
reimburse the Underwriter for the reasonable and documented fees and expenses of the Underwriter’s
counsel and for such other accountable out-of-pocket expenses as shall have been reasonably
incurred by it in connection with this Agreement and the proposed purchase of the Units, and upon
demand the Company shall pay the full amount thereof to the Underwriter.
10. Effectiveness. This Agreement shall become effective upon the execution
and delivery hereof by the parties hereto.
11. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) the Underwriter’s responsibility to the Company is solely contractual in nature,
the Underwriter has been retained solely to act as an underwriter in connection with the
Offering and no fiduciary, advisory or agency relationship between the Company and the
Underwriter has been created in respect of any of the transactions contemplated by this
Agreement, irrespective of whether the Underwriter has advised or is advising the Company on
other matters;
(b) the price of the Units set forth in this Agreement was established by the Company
following discussions and arms-length negotiations with the Underwriter, and the Company is
capable of evaluating and understanding, and understands and accepts, the terms, risks and
conditions of the transactions contemplated by this Agreement;
(c) it has been advised that the Underwriter and its affiliates are engaged in a broad
range of transactions which may involve interests that differ from those of the Company and
that the Underwriter has no obligation to disclose such interests and transactions to the
Company by virtue of any fiduciary, advisory or agency relationship; and
(d) it waives, to the fullest extent permitted by law, any claims it may have against
the Underwriter for breach of fiduciary duty or alleged breach of fiduciary duty and agrees
that the Underwriter shall have no liability (whether direct or indirect) to the Company in
respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on
behalf of or in right of the Company, including stockholders, employees or creditors of the
Company.
12. Successors; Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the Underwriter, the Company, and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to
give any person, other than the persons mentioned in the preceding sentences, any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof
being
intended to be and being
for the sole and exclusive benefit of such persons and for the benefit of
no other person; except that the representations, warranties, covenants, agreements and
indemnities of the Company contained in this Agreement shall also be for the benefit of the
Underwriter Indemnified Parties and the indemnity of the Underwriter shall be for the benefit of
the Company Indemnified Parties. It is understood that the Underwriter’s responsibility to the
Company is solely contractual in nature and that no Underwriter owes the Company, or any other
party, any fiduciary duty as a result of this Agreement.
13. Survival of Indemnities, Representations, Warranties, etc. The respective indemnities,
covenants, agreements, representations, warranties and other statements of the Company and the
Underwriter, as set forth in this Agreement or made by them respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any investigation made by or on
behalf of the Underwriter, the Company or any person controlling any of them and shall survive
delivery of and payment for the Units. Notwithstanding any termination of this Agreement,
including without limitation any termination pursuant to Section 8, the indemnity and
contribution and reimbursement agreements contained in Sections 7 and 9 and the
covenants, representations, warranties set forth in this Agreement shall not terminate and shall
remain in full force and effect at all times.
14. Notices. All statements, requests, notices and agreements hereunder shall be in writing,
and:
(a) if to the Underwriter, shall be delivered or sent by overnight courier, facsimile
transmission or email to ▇▇▇▇ Capital Partners, LLC, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: Head of Equity Capital Markets, Fax: (▇▇▇) ▇▇▇-▇▇▇▇; and
(b) if to the Company, shall be delivered or sent by overnight courier, email or
facsimile transmission to: RXi Pharmaceuticals Corporation, ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Fax (▇▇▇) ▇▇▇-▇▇▇▇, Attention: Chief Executive Officer, with a copy to
Ropes & ▇▇▇▇ LLP, Prudential Tower, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Esq., Fax: (▇▇▇) ▇▇▇-▇▇▇▇;
Any such statements, requests, notices or agreements shall take effect at the time of receipt
thereof, except that any such statement, request, notice or agreement delivered or sent by email
shall take effect at the time of confirmation of receipt thereof by the recipient thereof.
15. Definition of Certain Terms. For purposes of this Agreement, (a) “business day” means any
day on which the New York Stock Exchange, Inc. is open for trading and (b) “knowledge” means the
knowledge of the executive officers and directors of the Company after reasonable inquiry.
16. Governing Law, Agent for Service and Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, including without limitation
Section 5-1401 of the New York General Obligations Law. No legal proceeding may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District
Court for the Southern District of New
York, which courts shall have jurisdiction over the
adjudication of such matters, and the Company and the Underwriter each hereby consent to the
jurisdiction of such courts and personal service with respect thereto. The Company and the
Underwriter each hereby waive all right to trial by jury in any legal proceeding (whether based
upon contract, tort or otherwise) in any way arising out of or relating to this Agreement. The
Company agrees that a final judgment in any such legal proceeding brought in any such court shall
be conclusive and binding upon the Company and the Underwriter and may be enforced in any other
courts in the jurisdiction of which the Company is or may be subject, by suit upon such judgment.
17. Underwriter’s Information. The parties hereto acknowledge and agree that, for all purposes
of this Agreement, the Underwriter’s Information consists solely of the following information in
the Prospectus: (i) the fifth paragraph on the front cover page concerning the terms of the
offering by the Underwriter; and (ii) the statements concerning the terms of the offering contained
in the third paragraph, concerning stabilization by the Underwriter in the ninth paragraph, and
concerning electronic distributions in the eleventh paragraph, in each case under the heading
“Underwriting.”
18. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph,
clause or provision of this Agreement shall not affect the validity or enforceability of any other
section, paragraph, clause or provision hereof. If any section, paragraph, clause 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.
19. General. 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. In this Agreement, the masculine,
feminine and neuter genders and the singular and the plural include one another. The section
headings in this Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended or modified, and
the observance of any term of this Agreement may be waived, only by a writing signed by the Company
and the Underwriter.
20. Research Analyst Independence. The Company acknowledges that the
Underwriter’s research analysts and research department are required to be independent from its
investment banking division and are subject to certain regulations and internal policies, and that
the Underwriter’s research analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the Company and/or the offering
that differ from the views of their investment banking division. The Company acknowledges that the
Underwriter is a full service securities firm and as such from time to time, subject to applicable
securities laws, rules and regulations, may effect transactions for its own account or the account
of its customers and hold long or short positions in debt or equity securities of the Company;
provided, however, that nothing in this Section 20 shall relieve the Underwriter of any
responsibility or liability it may otherwise bear in connection with activities in violation of
applicable securities laws, rules or regulations.
21. Counterparts. This Agreement may be signed in any number of counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and hereto were upon the
same instrument and such signatures may be delivered by facsimile or by e-mail delivery of a “.pdf”
format data file.
If the foregoing is in accordance with your understanding of the agreement between the Company
and the Underwriter, kindly indicate your acceptance in the space provided for that purpose below.
| Very truly yours, RXI PHARMACEUTICALS CORPORATION |
||||
| By: | /s/ ▇▇▇▇ ▇. ▇▇▇ | |||
| Name: | ▇▇▇▇ ▇. ▇▇▇ | |||
| Title: | President and Chief Executive Officer | |||
Confirmed as of the date first above-
mentioned by the Underwriter.
mentioned by the Underwriter.
▇▇▇▇ CAPITAL PARTNERS, LLC
By: |
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ | |||
Name:
|
||||
Title:
|
Head of Equity Capital Markets |
[Signature Page to RXi Pharmaceuticals Underwriting Agreement]
SCHEDULE A
General Use Free Writing Prospectuses
None.
SCHEDULE B
List of officers and directors subject to Section 4(k)
Directors
▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
Section 16 Officers
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
SCHEDULE C
List of former Apthera stockholders subject to Section 4(k)
Name
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Ph.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Pharm.D.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Pharm.D.
EXHIBIT A
Form of Series Warrant
EXHIBIT B
Form of Director and Officer Lock Up Agreement
April •, 2011
▇▇▇▇ Capital Partners, LLC
24 C▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
24 C▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: RXi Pharmaceuticals Corporation — Public Offering of Units
Dear Sirs:
This Agreement is being delivered to you in connection with the Underwriting Agreement (the
“Underwriting Agreement”) by and between RXi Pharmaceuticals Corporation, a Delaware corporation
(the “Company”) and ▇▇▇▇ Capital Partners, LLC (the “Underwriter”), relating to the proposed public
offering of Units, with each Unit consisting of shares of common stock, par value $0.0001 per share
(the “Common Stock”) and warrants to purchase Common Stock (the “Offering”) of the Company.
In order to induce you to enter into the Underwriting Agreement, and in light of the benefits
that the Offering will confer upon the undersigned in his or her capacity as a security holder
and/or an officer, director or employee of the Company, and for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with the
Underwriter that, for a period (the “Lock-Up Period”) of thirty (30) days following the date of the
final prospectus filed by the Company with the Securities and Exchange Commission in connection
with the Offering, the undersigned will not, without the prior written consent of the Underwriter,
directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or announce the intention to otherwise dispose of, any Common Stock
(including, without limitation, shares of Common Stock or any such securities which may be deemed
to be beneficially owned by the undersigned in accordance with the rules and regulations
promulgated under the Securities Act of 1933, as the same may be amended or supplemented from time
to time (such shares, the “Beneficially Owned Shares”)), (ii) enter into any swap, hedge or similar
agreement or arrangement that transfers in whole or in part, the economic risk of ownership of the
Beneficially Owned Shares or securities convertible into or exercisable or exchangeable for Common
Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or (iii) engage in any short
selling of the Common Stock or securities convertible into or exercisable or exchangeable for
Common Stock. To the extent you are at such time providing research coverage to the Company and
subject to the restrictions set forth in FINRA Rule 2711(f)(4), then if (a) the Company issues an
earnings release or material news or a material event relating to the Company occurs during the
last seventeen (17) days of the Lock-Up Period, or (b) prior to the expiration of the Lock-Up
Period, the Company announces that it
will release earnings results during the sixteen (16)-day period beginning on the last day of
the Lock-Up Period, then in each case the Lock-Up Period shall be extended and the restrictions
imposed by this Agreement shall continue to apply until the expiration of the eighteen (18)-day
period beginning on the date of the issuance of the earnings release or the occurrence of the
material news or material event.
Notwithstanding the foregoing, the undersigned may (a) transfer any or all of the shares of
Common Stock or other Company securities if the transfer is (i) by gift, will or intestacy, (ii) to
a trust the beneficiaries of which are the undersigned or a member or members of the immediate
family of the undersigned, or (iii) transfers pursuant to a sale or an offer to purchase 100% of
the outstanding Common Stock, whether pursuant to a merger, tender offer or otherwise, to a third
party or group of third parties and (b) enter into a trading plan established in accordance with
Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, provided that no sale or other
disposition under such plan may occur during the Lock-up Period; provided that in the case of any
transfer or distribution pursuant to clause (a), each donee, pledgee, distributee or transferee
shall sign and deliver a lock-up agreement substantially in the form of this Agreement. For the
purposes of this paragraph, “immediate family” shall mean spouse, lineal descendant (including
adopted children), father, mother, brother or sister of the transferor.
The foregoing restrictions shall not apply to the exercise of any of the undersigned’s rights
to acquire shares of Common Stock or other securities of the Company issued pursuant to any stock
option or similar equity incentive or compensation plan approved by the Board of Directors of the
Company (“Equity Incentive Grants”), provided that, in each case, such plan is in effect as of the
date of this Lock-Up Agreement (it being understood that any subsequent sale, transfer or
disposition of any Company securities issued upon exercise of such Equity Incentive Grants shall be
subject to the restrictions set forth in this Lock-Up Agreement). Furthermore, to the extent the
undersigned receives shares of Common Stock as part of an Equity Incentive Grant, the undersigned
may offer, sell, contract to sell, or otherwise dispose of up to the number of such shares of
Common Stock necessary to satisfy withholding tax obligations incurred by the undersigned in
connection with such Equity Incentive Grant.
Anything contained herein to the contrary notwithstanding, any person to whom shares of Common
Stock, securities convertible into or exercisable or exchangeable for Common Stock or Beneficially
Owned Shares are transferred from the undersigned shall be bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until the expiration of the
Lock-Up Period, any and all rights, if any, to request or demand registration pursuant to the
Securities Act of 1933, as amended, of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock that are registered in the name of the undersigned or
that are Beneficially Owned Shares. In order to enable the aforesaid covenants to be enforced, the
undersigned hereby consents to the placing of legends and/or stop transfer orders with the transfer
agent of the Common Stock with respect to any shares of Common Stock, securities convertible into
or exercisable or exchangeable for Common Stock or Beneficially Owned Shares.
The undersigned understands that if the Underwriting Agreement does not become effective by
April [•], 2011, or if the Offering is terminated prior to payment for and delivery of the Units to
be sold thereunder, the undersigned shall be released from all obligations under this Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this agreement and that this agreement has been duly executed and delivered
by the undersigned and is a valid and binding agreement of the undersigned. This agreement and all
authority herein conferred are irrevocable and shall survive the death or incapacity of the
undersigned and shall be binding upon the undersigned and upon the heirs, personal representatives,
successors and assigns of the undersigned.
| [Signatory] | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
EXHIBIT C
Form of Former Apthera Stockholder Lock Up Agreement
April •, 2011
▇▇▇▇ Capital Partners, LLC
24 C▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
24 C▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: RXi Pharmaceuticals Corporation — Public Offering of Units
Dear Sirs:
This Agreement is being delivered to you in connection with the Underwriting Agreement (the
“Underwriting Agreement”) by and between RXi Pharmaceuticals Corporation, a Delaware corporation
(the “Company”) and ▇▇▇▇ Capital Partners, LLC (the “Underwriter”), relating to the proposed public
offering of Units, with each Unit consisting of shares of common stock, par value $0.0001 per share
(the “Common Stock”) and warrants to purchase Common Stock (the “Offering”) of the Company.
In order to induce you to enter into the Underwriting Agreement, and in light of the benefits
that the Offering will confer upon the undersigned in his or her capacity as a security holder
and/or an officer, director or employee of the Company, and for good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with the
Underwriter that, for a period (the “Lock-Up Period”) of ninety (90) days following the date of the
final prospectus filed by the Company with the Securities and Exchange Commission in connection
with the Offering, the undersigned will not, without the prior written consent of the Underwriter,
directly or indirectly, (i) offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, any shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock or announce the intention to otherwise dispose of, any Common Stock
(including, without limitation, shares of Common Stock or any such securities which may be deemed
to be beneficially owned by the undersigned in accordance with the rules and regulations
promulgated under the Securities Act of 1933, as the same may be amended or supplemented from time
to time (such shares, the “Beneficially Owned Shares”)), (ii) enter into any swap, hedge or similar
agreement or arrangement that transfers in whole or in part, the economic risk of ownership of the
Beneficially Owned Shares or securities convertible into or exercisable or exchangeable for Common
Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the
undersigned has or hereafter acquires the power of disposition, or (iii) engage in any short
selling of the Common Stock or securities convertible into or exercisable or exchangeable for
Common Stock. To the extent you are at such time providing research coverage to the Company and
subject to the restrictions set forth in FINRA Rule 2711(f)(4), then if (a) the Company issues an
earnings release or material news or a material event relating to the Company occurs during the
last seventeen (17) days of the Lock-Up Period, or (b) prior to the expiration of the Lock-Up
Period, the Company announces that it
will release earnings results during the sixteen (16)-day period beginning on the last day of
the Lock-Up Period, then in each case the Lock-Up Period shall be extended and the restrictions
imposed by this Agreement shall continue to apply until the expiration of the eighteen (18)-day
period beginning on the date of the issuance of the earnings release or the occurrence of the
material news or material event.
Notwithstanding the foregoing, the undersigned may (a) transfer any or all of the shares of
Common Stock or other Company securities if the transfer is (i) by gift, will or intestacy, (ii) to
a trust the beneficiaries of which are the undersigned or a member or members of the immediate
family of the undersigned, or (iii) transfers pursuant to a sale or an offer to purchase 100% of
the outstanding Common Stock, whether pursuant to a merger, tender offer or otherwise, to a third
party or group of third parties and (b) enter into a trading plan established in accordance with
Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, provided that no sale or other
disposition under such plan may occur during the Lock-up Period; provided that in the case of any
transfer or distribution pursuant to clause (a), each donee, pledgee, distributee or transferee
shall sign and deliver a lock-up agreement substantially in the form of this Agreement. For the
purposes of this paragraph, “immediate family” shall mean spouse, lineal descendant (including
adopted children), father, mother, brother or sister of the transferor.
The foregoing restrictions shall not apply to the exercise of any of the undersigned’s rights
to acquire shares of Common Stock or other securities of the Company issued pursuant to any stock
option or similar equity incentive or compensation plan approved by the Board of Directors of the
Company (“Equity Incentive Grants”), provided that, in each case, such plan is in effect as of the
date of this Lock-Up Agreement (it being understood that any subsequent sale, transfer or
disposition of any Company securities issued upon exercise of such Equity Incentive Grants shall be
subject to the restrictions set forth in this Lock-Up Agreement). Furthermore, to the extent the
undersigned receives shares of Common Stock as part of an Equity Incentive Grant, the undersigned
may offer, sell, contract to sell, or otherwise dispose of up to the number of such shares of
Common Stock necessary to satisfy withholding tax obligations incurred by the undersigned in
connection with such Equity Incentive Grant.
Anything contained herein to the contrary notwithstanding, any person to whom shares of Common
Stock, securities convertible into or exercisable or exchangeable for Common Stock or Beneficially
Owned Shares are transferred from the undersigned shall be bound by the terms of this Agreement.
In addition, the undersigned hereby waives, from the date hereof until the expiration of the
Lock-Up Period, any and all rights, if any, to request or demand registration pursuant to the
Securities Act of 1933, as amended, of any shares of Common Stock or securities convertible into or
exercisable or exchangeable for Common Stock that are registered in the name of the undersigned or
that are Beneficially Owned Shares. In order to enable the aforesaid covenants to be enforced, the
undersigned hereby consents to the placing of legends and/or stop transfer orders with the transfer
agent of the Common Stock with respect to any shares of Common Stock, securities convertible into
or exercisable or exchangeable for Common Stock or Beneficially Owned Shares.
The undersigned understands that if the Underwriting Agreement does not become effective by
April [•], 2011, or if the Offering is terminated prior to payment for and delivery of the Units to
be sold thereunder, the undersigned shall be released from all obligations under this Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this agreement and that this agreement has been duly executed and delivered
by the undersigned and is a valid and binding agreement of the undersigned. This agreement and all
authority herein conferred are irrevocable and shall survive the death or incapacity of the
undersigned and shall be binding upon the undersigned and upon the heirs, personal representatives,
successors and assigns of the undersigned.
| [Signatory] | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||