Exhibit 1.1
EXECUTION COPY
OncoGenex Pharmaceuticals, Inc.
3,174,602 Shares
Warrants to Purchase 1,587,301 Shares
Common Stock
($0.001 par value)
Underwriting Agreement
October 19, 2010
Stifel, Nicolaus & Company, Incorporated
As Representative of the Several Underwriters
One Montgomery Street
Suite 3700
San Francisco, California 94104
Ladies and Gentlemen:
OncoGenex Pharmaceuticals, Inc., a Delaware corporation (the Company), proposes, subject to
the terms and conditions stated herein, to issue and sell to the several underwriters named in
Schedule I hereto (collectively, the Underwriters), for whom Stifel, Nicolaus & Company,
Incorporated is acting as representative (the Representative), an aggregate of 3,174,602 units
(the Units), with each Unit consisting of (i) one share of common stock, par value $0.001, of the
Company (the Common Stock), and (ii) one-half (1/2) of a warrant in the form attached hereto as
Exhibit E. Each whole warrant (a Warrant) will entitle the holder to purchase one share
of Common Stock (a Warrant Share).
1. The Company represents and warrants to, and agrees with, each of the Underwriters that:
(a) The Company has prepared and filed with the Securities and Exchange Commission (the
Commission) a registration statement on Form S-3 (File No. 333-160251), and such amendments to
such registration statement as may have been required to the date of this Agreement, under the
Securities Act of 1933, as amended (the Securities Act), and the rules and regulations (the
Rules and Regulations) of the Commission thereunder. Such registration statement, at any given
time, including any amendments thereto to such time, the exhibits and any schedules thereto at such
time, the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act at such time and the documents and information otherwise deemed to be a part thereof
or included therein by Rule 430B under the Securities Act (the Rule 430B Information) or
otherwise pursuant to the Rules and Regulations at such time, is herein called the Registration
Statement. The Registration Statement at the time it originally became effective is herein called
the Initial Registration Statement. Any registration statement filed by the Company pursuant to
Rule 462(b) under the Securities Act is called the Rule 462(b) Registration Statement, and, from
and after the date and time of filing of the Rule 462(b) Registration Statement, the term
Registration Statement shall include any Rule 462(b) Registration Statement.
The prospectus in the form in which it appeared in the Initial Registration Statement is
herein called the Base Prospectus. Each preliminary prospectus supplement to the Base Prospectus
(including the Base Prospectus as so supplemented) that described the Shares and Warrants and the
offering thereof, that omitted the Rule 430B Information and that was used prior to the filing of
the final prospectus supplement referred to in the following sentence is herein called a
Preliminary Prospectus. Promptly after the execution and delivery of this Agreement, the Company
will prepare and file with the Commission a final prospectus supplement to the Base Prospectus
relating to the Shares and Warrants and the offering thereof in accordance with the provisions of
Rule 430B and Rule 424(b) of the Rules and Regulations. Such final supplemental form of prospectus
(including the Base Prospectus as so supplemented), in the form filed with the Commission pursuant
to Rule 424(b) under the Securities Act is herein called the Prospectus. Any reference herein to
the Base Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act as of the date of such prospectus.
The Company has filed with the British Columbia Securities Commission (BCSC) the Initial
Registration Statement, and, pursuant to and in accordance with National Instrument 71-101, The
Multijurisdictional Disclosure System, of the Canadian Securities Administrators (NI 71-101), a
prospectus, consisting of the Base Prospectus together with such additional information legends and
disclosure required by NI 71-101 (collectively, the MJDS Prospectus). The Company has received a
receipt for the MJDS Prospectus from the BCSC.
For purposes of this Agreement, all references to the Registration Statement, any Rule 462(b)
Registration Statement, the Base Prospectus, any Preliminary Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval System (EDGAR). All
references in this Agreement to financial statements and schedules and other information that is
described, contained, included or stated in the Registration Statement, the Base
Prospectus, any Preliminary Prospectus or the Prospectus (or other references of like import) shall
be deemed to mean and include all such financial statements and schedules and other information
that is incorporated by reference in or otherwise deemed by the Rules and Regulations to be a part
of or included in the Registration Statement, the Base Prospectus, any Preliminary Prospectus or
the Prospectus, as the case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, the Base Prospectus, any Preliminary Prospectus or the
Prospectus shall be deemed to mean and include the subsequent filing of any document under the
Securities Exchange Act of 1934, as amended (the Exchange Act), and which is deemed to be
incorporated by reference therein or otherwise deemed by the Rules and Regulations to be a part
thereof.
(b) At the time of the filing of the Initial Registration Statement with the Commission, the
conditions for use of Form S-3, set forth in the General Instructions thereto, were satisfied. The
Initial Registration Statement was declared effective by the Commission under the Securities Act on
July 17, 2009. The Company has complied, to the Commissions satisfaction, with all requests of
the Commission for additional or supplemental information. No other document with respect to the
Initial Registration Statement has heretofore been filed with the Commission. No stop order
suspending the effectiveness of the Registration Statement, any post-effective amendment thereto or
the Rule 462(b) Registration Statement, if any, has been issued, and no proceeding for that purpose
has been initiated or threatened by the Commission.
The Company meets the requirements for use of the multijurisdictional disclosure system
established by NI 71-101. Concurrently with the filing of the Preliminary Prospectus and the
Prospectus with the Commission, the Company will file the Preliminary Prospectus and Prospectus
with the BCSC as required by NI 71-101.
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(c) For the purposes of this Agreement, the Applicable Time is 9:00 a.m. (Eastern time) on
the date of this Agreement. The Disclosure Package (as defined below) at the Applicable Time
complied in all material respects with the requirements of the Securities Act and the Rules and
Regulations and did not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading. The preceding
sentence does not apply to statements or omissions from the Disclosure Package made in reliance
upon and in conformity with information furnished in writing to the Company by or on behalf of any
Underwriter through the Representative expressly for use therein; it being understood and agreed
that the only such information furnished by the Representative consists of the information
described as such in Section 10(f).
(d) Each part of the Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto, at the time that such part became effective (including each
deemed effective date with respect to the Underwriters pursuant to Rule 430B or otherwise under the
Securities Act), at all other subsequent times until the expiration of the Prospectus Delivery
Period (as defined below), and at the Time of Delivery (as defined below), and the Prospectus, at
the time of filing or the time of first use within the meaning of the Rules and Regulations, at all
subsequent times until expiration of the Prospectus Delivery Period, and at the Time of Delivery,
complied and will comply in all material respects with the applicable requirements and provisions
of the Securities Act, the Rules and Regulations and the Exchange Act and did not and will not
contain any untrue statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading. The Prospectus, as
amended or supplemented, as of its date, or the time of first use within the meaning of the Rules
and Regulations, at all subsequent times until the expiration of the Prospectus Delivery Period,
and at the Time of Delivery, did not and will not contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. The representations and warranties
set forth in the two immediately preceding sentences do not apply to statements in or omissions
from the Registration Statement, any Rule 462(b) Registration Statement, or any post-effective
amendment thereto, or the Prospectus made in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter through the Representative
expressly for use therein; it being understood and agreed that the only such information furnished
by the Representative consists of the information described as such in Section 10(f).
On the date of filing with the BCSC, the MJDS Prospectus did, and when the Prospectus is first
filed with the BCSC in accordance with NI 71-101 and at the Time of Delivery will, comply in all
material respects with the applicable requirements of NI 71-101; on the date of filing with the
BCSC, the MJDS Prospectus did not contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary in order to make the statements
therein not misleading; on the date of any filing pursuant to NI 71-101 and at the Time of
Delivery, the MJDS Prospectus, as amended or supplemented by the Prospectus, will not include any
untrue statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as to the statements in
the MJDS Prospectus (or any supplement thereto) made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any Underwriter through the
Representative expressly for use therein; it being understood and agreed that the only such
information furnished by the Representative consists of the information described as such in
Section 10(f).
(e) Neither (i) any Issuer General Free Writing Prospectus(es) issued at or prior to the
Applicable Time and set forth on Schedule II, the Statutory Prospectus at the Applicable
Time and the
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information set forth on Schedule III, all considered together (collectively, the
Disclosure Package); nor (ii) any individual Issuer Limited-Use Free Writing Prospectus, when
considered together with the Disclosure Package, includes or included as of the Applicable Time any
untrue statement of a material fact or omits or omitted as of the Applicable Time to state any
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The representations and warranties set forth in the
immediately preceding sentence do not apply to statements in or omissions from any Statutory
Prospectus or any Issuer Free Writing Prospectus made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any Underwriter through the
Representative expressly for use therein; it being understood and agreed that the only such
information furnished by the Representative consists of the information described as such in
Section 10(f). As used in this paragraph and elsewhere in this Agreement:
(i) Statutory Prospectus means the Base Prospectus, as amended and supplemented immediately
prior to the Applicable Time, including any document incorporated by reference therein and any
prospectus supplement deemed to be a part thereof. For purposes of this definition, Rule 430B
Information contained in a form of prospectus that is deemed retroactively to be a part of the
Registration Statement shall be considered to be included in the Statutory Prospectus as of the
actual time that form of prospectus is filed with the Commission pursuant to Rule 424(b) under the
Securities Act.
(ii) Issuer Free Writing Prospectus means any issuer free writing prospectus, as defined
in Rule 433 under the Securities Act, relating to the Shares and Warrants that (A) is required to
be filed with the Commission by the Company; or (B) is exempt from filing pursuant to Rule
433(d)(5)(i) under the Securities Act because it contains a description of the Shares and Warrants
or of the offering that does not reflect the final terms, or is a bona fide electronic roadshow,
as defined in Rule 433 of the Rules and Regulations, in each case 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 Companys
records pursuant to Rule 433(g) under the Securities Act.
(iii) Issuer General Free Writing Prospectus means any Issuer Free Writing Prospectus that
is intended for general distribution to prospective investors, as evidenced by its being specified
in Schedule II hereto.
(iv) Issuer Limited-Use Free Writing Prospectus means any Issuer Free Writing Prospectus
that is not an Issuer General Free Writing Prospectus.
(f) Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the Prospectus Delivery Period or until any earlier date that the Company notified or
notifies the Underwriters as described in Section 7(c), did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information contained in the
Registration Statement, any Statutory Prospectus or the Prospectus. The foregoing sentence does
not apply to statements in or omissions from any Issuer Free Writing Prospectus made in reliance
upon and in conformity with information furnished in writing to the Company by or on behalf of any
Underwriter through the Representative expressly for use therein; it being understood and agreed
that the only such information furnished by the Representative consists of the information
described as such in Section 10(f).
(g) Each Issuer Free Writing Prospectus satisfied, as of its issue date and at all subsequent
times through the Prospectus Delivery Period, all other conditions to use thereof as set forth in
Rules 164 and 433 under the Securities Act.
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(h) The Company is not the subject of a cease trade order, or management cease trade order,
issued by the BCSC, and the Company is, to the best of its knowledge, not aware of any such order
being contemplated or threatened by the BCSC.
The Company is a reporting issuer under the securities laws of the Province of British
Columbia (the BC Securities Laws), is not in default of any requirement of the BC Securities
Laws, and the Company is not included on the Defaulting Issuers List maintained by the BCSC.
All disclosure and filings on the public record and fees required to be made and paid by the
Company pursuant to the BC Securities Laws have been made and paid, and the Company has not filed
any confidential material change reports.
(i) The documents incorporated by reference in the Disclosure Package and 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
were filed on a timely basis with the Commission, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; any further
documents so filed and incorporated by reference in the Disclosure Package or in the Prospectus,
when such documents are filed with the Commission, will conform in all material respects to the
requirements of the Exchange Act, and will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(j) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as currently being conducted and as described in the
Registration Statement, the MJDS Prospectus, the Disclosure Package and the Prospectus and is duly
qualified as a foreign corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties or conducts any business
so as to require such qualification, except where the failure to be so qualified in any such
jurisdiction would not reasonably be expected to have a Material Adverse Effect. Complete and
correct copies of the charter and bylaws of the Company and all amendments thereto have been
delivered to the Underwriters, and no changes therein will be made on or after the date hereof
through and including the Time of Delivery.
(k) The Company has no subsidiaries (as defined under the Securities Act) other than the
subsidiaries set forth in Exhibit 21 to the Companys annual report on Form 10-K for the year ended
December 31, 2009 (collectively, the Subsidiaries). The Company owns all of the issued and
outstanding capital stock of each of the Subsidiaries. Other than the capital stock of the
Subsidiaries, and other than with respect to its cash equivalents, the Company does not own,
directly or indirectly, any shares of stock or any other equity interests or long-term debt
securities of any corporation, firm, partnership, joint venture, association or other entity.
Complete and correct copies of the charters and bylaws of each Subsidiary and all amendments
thereto have been delivered to the Underwriters, and no changes therein will be made on or after
the date hereof through and including the Time of Delivery. Each Subsidiary has been duly
organized and is validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with full corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the Registration Statement, the
MJDS Prospectus, the Disclosure Package and the Prospectus, except where failure to be in good
standing would not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, prospects, operations, assets, financial condition, members or
stockholders equity (as applicable)
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or results of operations of the Company and its consolidated Subsidiaries taken as a whole (a
Material Adverse Effect). Each Subsidiary is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where the ownership or leasing of its
properties or the conduct of its business requires such qualification, except where the failure to
be so qualified and in good standing would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. All of the outstanding shares of capital stock of each
of the Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable, have been issued in material compliance with all applicable securities laws, were
not issued in violation of any preemptive right, resale right, right of first refusal or similar
right and are owned by the Company subject to no security interest, other encumbrance or adverse
claims. No options, warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligation into shares of capital stock or ownership interests in
the Subsidiaries are outstanding. The Company has no significant subsidiary, as that term is
defined in Rule 1-02(w) of Regulation S-X under the Act other than: OncoGenex Technologies Inc.
(l) The Company has the authorized and outstanding capitalization as set forth in the
Registration Statement, the MJDS Prospectus, the Disclosure Package and the Prospectus, and all of
the issued shares of capital stock of the Company have been duly authorized and validly issued, are
fully paid and non-assessable, have been issued in compliance with all federal and state securities
laws, were not issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities that have not been waived in writing (a copy of which has been
delivered to counsel to the Underwriters) and conform in all material respects to the description
thereof contained in the Registration Statement, the MJDS Prospectus, the Disclosure Package and
the Prospectus. Except as otherwise described in the Registration Statement, the MJDS
Prospectus, the Disclosure Package and the Prospectus, there are no preemptive rights or other
rights to subscribe for or to purchase, or any restriction upon the voting or transfer of, any
shares of Common Stock pursuant to the Companys charter, bylaws or any agreement or other
instrument to which the Company is a party or by which the Company is bound. Except as described
in the Registration Statement, the MJDS Prospectus, the Disclosure Package and the Prospectus,
neither the filing of the Registration Statement nor the offering or sale of the Shares and
Warrants as contemplated by this Agreement gives rise to any rights for or relating to the
registration of any shares of Common Stock or other securities of the Company that have not been
fully complied with or previously waived. Except as described or contemplated in the Registration
Statement, the MJDS Prospectus, the Disclosure Package and the Prospectus, there are no options,
warrants, agreements, contracts or other rights in existence to purchase or acquire from the
Company any shares of the capital stock of the Company (other than as a result of the grant of
stock options under the Companys existing equity incentive plans). The description of the
Companys stock option, stock bonus and other stock plans or arrangements, and the options or other
rights granted thereunder, set forth in the Disclosure Package and the Prospectus, accurately and
fairly presents the information required to be shown with respect to such plans, arrangements,
options and rights.
(m) The Shares have been duly authorized and, when issued and delivered against payment
therefor as provided herein, will be validly issued and fully paid and non-assessable and free of
statutory and contractual preemptive rights, resale rights, rights of first refusal and similar
rights and of any restriction upon the voting or transfer thereof pursuant to the Delaware General
Corporation Law or the Companys charter or bylaws or any agreement or other instrument to which
the Company is a party. The Warrants have been duly authorized, and when executed and delivered by
the Company, will constitute valid and binding obligations of the Company enforceable in accordance
with their terms, except that such enforcement may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, now or hereafter in effect, affecting creditors
rights generally. The Warrant Shares have been duly authorized and reserved for issuance pursuant
to the terms of the Warrants, and when issued by the Company upon valid exercise of the Warrants
and
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payment of the exercise price, will be duly and validly issued, fully paid and nonassessable
and free of any preemptive or similar rights. The Shares and Warrants will conform in all material
respects to the description of the Shares and Warrants contained in the Registration Statement, the
MJDS Prospectus, the Disclosure Package and the Prospectus. The certificates for the Shares,
Warrants and Warrant Shares, if any, when issued, will be in due and proper form.
(n) The issuance and sale of the Shares and Warrants to be sold by the Company pursuant
hereto, the execution, delivery and performance by the Company of this Agreement and the
consummation of the transactions herein contemplated will not conflict with, result in any breach
or violation of or constitute a default under (nor constitute any event which, with notice, lapse
of time or both, would result in any breach or violation of, constitute a default under or give the
holder of any indebtedness (or a person acting on such holders behalf) the right to require the
repurchase, redemption or repayment of all or a part of such indebtedness under), or result in the
creation or imposition of a lien, charge or encumbrance on any property or assets of the Company or
any Subsidiary pursuant to, any indenture, mortgage, deed of trust, loan agreement or other
evidence of indebtedness, lease, license, contract or other agreement or instrument to which the
Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound or to which any of the property or assets of the Company or any of its Subsidiaries is
subject, except for such breaches or violations as would not, individually or in the aggregate,
have a Material Adverse Effect, nor will such action result in any violation of (a) the provisions
of the charter or bylaws of the Company or any of its Subsidiaries or (b) any statute or any order,
rule or regulation of any court, arbitrator, governmental agency or body having jurisdiction over
the Company or any of its Subsidiaries or any of their properties or (c) any rule or regulation of
any self-regulatory organization or other non-governmental regulatory authority (including, without
limitation, the rules and regulations of the NASDAQ Capital Market), except in the case of (b) or
(c) above, for such violations as would not, individually or in the aggregate, have a Material
Adverse Effect.
(o) No consent, approval, authorization, order, registration, qualification, permit, license,
exemption, filing or notice (each, an Authorization) of, from, with or to any court, government,
governmental or regulatory authority, self-regulatory organization or body (each, a Regulatory
Body) is required for the execution, delivery or performance of this Agreement or the issuance and
sale of the Shares and Warrants by the Company, except (i) the registration of the Shares and
Warrants under the Securities Act; (ii) such consents, approvals, authorizations, registrations or
qualifications as may be required under the rules of the Financial Industry Regulatory Authority
(FINRA) or state securities or Blue Sky laws or any securities laws of jurisdictions outside of
the United States in connection with the purchase and distribution of the Shares and Warrants by
the Underwriters; (iii) such consents, approvals, authorizations, registrations or qualifications
as may be required with the BCSC; and (iv) such other Authorizations the absence of which would
not, individually or in the aggregate, have a Material Adverse Effect; and no event has occurred
that allows or results in, or after notice or lapse of time or both would allow or result in,
revocation, suspension, termination or invalidation of any such Authorization or any other
impairment of the rights of the holder or maker of any such Authorization.
(p) This Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid, legal and binding obligation of the Company, enforceable in accordance with
its terms, except as rights to indemnity hereunder may be limited by federal or state securities
laws and except as such enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting the rights of creditors generally and subject to general principles of
equity.
(q) The Company has full power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby, including, without limitation, the authorization, issuance
and
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sale of the Shares and Warrants as contemplated by this Agreement. All corporate actions
(including those of stockholders) necessary for the Company to consummate the transactions
contemplated in this Agreement have been obtained and are in effect. Except as described in the
Disclosure Package and the Prospectus, no approval of the Company (including the approval of its
stockholders) is required under the rules and regulations of any trading market for the Company to
issue and deliver to the Underwriters the Shares and Warrants.
(r) The conditions for use of Form S-3, set forth in the General Instructions thereto, have
been satisfied.
(s) Neither the Company nor any of its Subsidiaries is in breach or violation of or in default
under (nor has any event occurred which, with notice, lapse of time or both, would result in any
breach or violation of, constitute a default under or give the holder of any indebtedness (or a
person acting on such holders behalf) the right to require the repurchase, redemption or repayment
of all or a part of such indebtedness under) (i) its charter or bylaws or other organizational
documents; (ii) any indenture, mortgage, deed of trust, loan agreement or other evidence of
indebtedness, lease, license, contract or other agreement or instrument to which it is a party or
by which it or any of its properties may be bound or affected; (iii) any federal, state, local or
foreign law, regulation or rule, including, without limitation, the Sarbanes-Oxley Act of 2002 (the
Sarbanes-Oxley Act) or the rules and regulations of the Commission thereunder; (iv) any rule or
regulation of any self-regulatory organization or other non-governmental regulatory authority
(including, without limitation, the rules and regulations of the NASDAQ Capital Market); or (v) any
decree, judgment or order applicable to it or any of its properties, except for such defaults
specified under subparagraphs (ii) through (v) herein that would not have a Material Adverse
Effect.
(t) Neither the Company nor any of its Subsidiaries has sustained since the date of the latest
audited financial statements included in the Prospectus 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 described in the
Disclosure Package and the Prospectus, except for such loss or interference as would not,
individually or in the aggregate, have a Material Adverse Effect; and, since the respective dates
as of which information is given in the Registration Statement, the MJDS Prospectus, the Disclosure
Package and the Prospectus, there has not been any change in the capital stock (other than
issuances of shares of capital stock pursuant to the exercise of options) or short-term or
long-term debt, or any issuance of options, warrants, convertible securities or other rights to
purchase capital stock (other than issuances of options under the Companys existing stock option
plans), of the Company or any of its Subsidiaries or any material adverse change, or any
development that would reasonably be expected to have a Material Adverse Effect other than as
described in the Disclosure Package and the Prospectus. Except as described in the Disclosure
Package and the Prospectus, neither the Company nor any of its Subsidiaries has incurred any
material liabilities or obligations, direct or contingent, entered into any material transactions,
or declared or paid any dividends or made any distribution of any kind with respect to its capital
stock.
(u) The Company and its Subsidiaries have good and marketable title in fee simple to all real
property and good and marketable title to all material personal property (other than Intellectual
Property) described in the Registration Statement, the MJDS Prospectus, the Disclosure Package and
the Prospectus as being owned by them, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Registration Statement, the MJDS Prospectus, the
Disclosure Package and the Prospectus or such as do not materially affect the value of such
property and do not materially interfere with the use made and proposed to be made of such property
by the Company and its Subsidiaries; and any real property and buildings held under lease by the
Company and its Subsidiaries are held by them under valid, subsisting and enforceable
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leases with such exceptions as are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company and its Subsidiaries.
(v) The Company and each of its Subsidiaries holds, and is operating in compliance with, all
franchises, grants, authorizations, licenses, permits, easements, consents, certificates and orders
(each, a Permit) of any Regulatory Body required for the conduct of its business; all such
Permits are valid and in full force and effect, except where the failure to hold or comply with any
such Permits would not, individually or in the aggregate, result in a Material Adverse Effect; and
neither the Company nor any of its Subsidiaries has received notice of any revocation, suspension
or modification of any such Permit or has reason to believe that any such Permit will not be
renewed in the ordinary course of business.
(w) The Company and each of its Subsidiaries owns, possesses or can acquire on reasonable
terms all Intellectual Property (as defined below) necessary for the conduct of its business as now
conducted or as described in the Registration Statement, the MJDS Prospectus, the Disclosure
Package and the Prospectus to be conducted, except for such failure to own, possess, or ability to
acquire such rights as would not result in a Material Adverse Effect. Except as set forth in
Registration Statement, the MJDS Prospectus, the Disclosure Package and the Prospectus, (i) to the
knowledge of the Company, there is no infringement, misappropriation or violation by third parties
of any such Intellectual Property, except for such infringement, misappropriation or violation as
would not result in a Material Adverse Effect; (ii) there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or claim by others challenging the Companys or any of
its Subsidiaries rights in or to any such Intellectual Property, and the Company is unaware of any
facts which would form a reasonable basis for any such claim; (iii) the Intellectual Property owned
by the Company and its Subsidiaries, and, to the knowledge of the Company, the Intellectual
Property licensed to the Company and its Subsidiaries has not been adjudged invalid or
unenforceable, in whole or in part, there is no pending or, to the knowledge of the Company,
threatened action, suit, proceeding or claim by others challenging the validity or scope of any
such Intellectual Property, and the Company is unaware of any facts that would form a reasonable
basis for any such claim; (iv) there is no pending or threatened action, suit, proceeding or claim
by others that the Company or any of its Subsidiaries infringes, misappropriates or otherwise
violates any Intellectual Property or other proprietary rights of others, neither the Company nor
any of its Subsidiaries has received any written notice of such claim and the Company is unaware of
any other fact which would form a reasonable basis for any such claim; (v) the Company and its
Subsidiaries have not been advised of, have not received a notice of breach of, and to the
knowledge of the Company and its Subsidiaries are unaware of any facts that would form a reasonable
basis that the Company and its Subsidiaries are in breach of, any of their agreements with the
University of British Columbia, Isis Pharmaceuticals, Inc., Bayer HealthCare LLC, and Teva
Pharmaceutical Industries Ltd, (vi) all patent applications owned by or licensed to the Company and
its Subsidiaries (including all applications pursuant to which patents have been issued) have, to
the knowledge of the Company and its Subsidiaries, been duly and properly filed, and to the
knowledge of the Company and its Subsidiaries, the parties prosecuting such applications have
complied with their duty of candor and disclosure to the U.S. Patent and Trademark Office (USPTO)
in connection with such applications, and the Company and its Subsidiaries are not aware of any
facts required to be disclosed to the USPTO that were not disclosed to the USPTO and which would
preclude the grant of a patent in connection with any such application or could form the basis of a
finding of invalidity with respect to any patents that have issued with respect to such
applications; and (vii) to the Companys knowledge, no employee of the Company or any of its
Subsidiaries is in or has ever been in violation of any term of any employment contract, patent
disclosure agreement, invention assignment agreement, non-competition agreement, non-solicitation
agreement, nondisclosure agreement or any restrictive covenant to or with a former employer where
the basis of such violation relates to such employees employment with the Company or one of its
Subsidiaries or actions undertaken by the employee while employed with the Company or such
Subsidiary, except as such violation would not result in a Material Adverse Effect.
9
Intellectual Property shall mean all patents, patent applications, trade and service marks,
trade and service mark registrations, trade names, copyrights, licenses, inventions, trade secrets,
technology, know-how and other intellectual property.
(x) As to each product subject to the jurisdiction of the U.S. Food and Drug Administration
(FDA) under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder
(FDCA) that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the
Company or any of its Subsidiaries (each such product, a Pharmaceutical Product), such
Pharmaceutical Product is being manufactured, packaged, labeled, tested, distributed, sold and/or
marketed by the Company in compliance with all applicable requirements under FDCA and similar laws,
rules and regulations relating to registration, investigational use, premarket clearance,
licensure, or application approval, good manufacturing practices, good laboratory practices, good
clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of
reports, except where the failure to be in compliance would not have or reasonably be expected to
result in a Material Adverse Effect. There is no pending, completed or, to the knowledge of the
Company, threatened, action (including any lawsuit, arbitration, or legal or administrative or
regulatory proceeding, charge, complaint, or investigation) against the Company or any of its
Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning
letter or other communication from the FDA or any other governmental entity, which (i) contests the
premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the
manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any
Pharmaceutical Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure
of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating
to, any Pharmaceutical Product, (iii) imposes a clinical hold on any clinical investigation by the
Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any
of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction
with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws,
rules or regulations by the Company or any of its Subsidiaries, and which, either individually or
in the aggregate, would have or reasonably be expected to result in a Material Adverse Effect. The
properties, business and operations of the Company and its Subsidiaries have been and are being
conducted in all material respects in accordance with all applicable laws, rules and regulations of
the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing,
sale, license or use in the United States of any product proposed to be developed, produced or
marketed by the Company and its Subsidiaries nor has the FDA expressed any concern as to approving
or clearing for marketing any product being developed or proposed to be developed by the Company
and its Subsidiaries.
(y) The Company and each of its Subsidiaries (i) is in compliance with any and all applicable
federal, state, local and foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (collectively, Environmental Laws); (ii) has received and is in
material compliance with all Permits required of it under applicable Environmental Laws to conduct
its business; and (iii) has not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except in any such case for any such failure to comply, failure to
receive required Permits or liability as would not, individually or in the aggregate, result in a
Material Adverse Effect.
(z) The Company and each of its Subsidiaries (i) is in compliance, in all material respects,
with any and all applicable foreign, federal, state and local laws, rules, regulations, treaties,
statutes and codes promulgated by any and all governmental authorities (including pursuant to the
Occupational Health and Safety Act) relating to the protection of human health and safety in the
workplace (Occupational Laws); (ii) has received all material Permits required of it under
applicable Occupational Laws to conduct its business as
10
currently conducted; and (iii) is in compliance, in all material respects, with all terms and
conditions of such Permit. No action, proceeding, revocation proceeding, writ, injunction or claim
is pending or, to the Companys knowledge, threatened against the Company or any of its
Subsidiaries relating to Occupational Laws, and the Company does not have knowledge of any facts,
circumstances or developments relating to its operations or cost accounting practices that could
reasonably be expected to form the basis for or give rise to such actions, suits, investigations or
proceedings.
(aa) Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended (ERISA), that is maintained, administered or contributed
to by the Company or any of its affiliates for employees or former employees of the Company or any
of its Subsidiaries has been maintained in material compliance with its terms and the requirements
of any applicable statutes, orders, rules and regulations, including but not limited to, ERISA and
the Internal Revenue Code of 1986, as amended (the Code). No prohibited transaction, within the
meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any such
plan excluding transactions effected pursuant to a statutory or administrative exemption; and for
each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of
ERISA, no accumulated funding deficiency as defined in Section 412 of the Code has been incurred,
whether or not waived, and the fair market value of the assets of each such plan (excluding for
these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued
under such plan determined using reasonable actuarial assumptions.
(bb) No labor problem or dispute with the employees of the Company or any of its Subsidiaries
exists or is threatened or imminent.
(cc) Except as set forth in the Registration Statement, the MJDS Prospectus, the Disclosure
Package and the Prospectus, neither the Company nor any of its Subsidiaries has granted rights to
develop, manufacture, produce, assemble, distribute, license, market or sell its products to any
other person, and neither the Company nor any of its Subsidiaries is bound by any agreement that
affects the Companys or any of its Subsidiaries exclusive right to develop, manufacture, produce,
assemble, distribute, license, market or sell its products.
(dd) Nothing has come to the attention of the Company that has caused the Company to believe
that the statistical and market-related data included in the Registration Statement, the MJDS
Prospectus, the Disclosure Package and the Prospectus is not based on or derived from sources that
are reliable and accurate in all material respects.
(ee) The Company and each of its Subsidiaries carries, or is covered by, insurance issued by
insurers of nationally recognized financial responsibility in such amounts and covering such risks
as is adequate for the conduct of its business and the value of its properties and as is customary
for companies engaged in similar businesses in similar industries; and neither the Company nor any
of its Subsidiaries has (i) received notice from any insurer or agent of such insurer that capital
improvements or other expenditures are required or necessary to be made in order to continue such
insurance; or (ii) reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from
similar insurers as may be necessary to continue its business. All such insurance is outstanding
and duly in force on the date hereof.
(ff) The Company and each of its Subsidiaries has timely filed all federal, state, local and
foreign income and franchise tax returns required to be filed and are not in default in the payment
of any taxes which were payable pursuant to said returns or any assessments with respect thereto,
other than any that the
11
Company or such Subsidiary is contesting in good faith, except for such taxes and assessments
which would not reasonably be expected to have a Material Adverse Effect. There is no pending
dispute with any taxing authority relating to any of such returns, and the Company has no knowledge
of any proposed liability for any tax to be imposed upon the properties or assets of the Company or
any of its Subsidiaries for which there is not an adequate reserve reflected in the Companys
financial statements included in the Registration Statement, the MJDS Prospectus, the Disclosure
Package and the Prospectus.
(gg) The statements set forth in the Prospectus under the caption Description of Capital
Stock, insofar as they purport to constitute a summary of the terms of the Common Stock, represent
an accurate summary of such terms in all material respects.
(hh) Other than as set forth in the Registration Statement, the MJDS Prospectus, the
Disclosure Package and the Prospectus, there are no legal or governmental proceedings pending to
which the Company or any of its Subsidiaries is a party or of which any property of the Company or
any of its Subsidiaries is the subject which, if determined adversely to the Company or any of its
Subsidiaries, would reasonably be expected to, individually or in the aggregate, have a Material
Adverse Effect; and, to the Companys knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others. There are no current or pending legal,
governmental or regulatory actions, suits or proceedings that are required to be described in the
Registration Statement, the MJDS Prospectus, the Disclosure Package and the Prospectus that have
not been so described.
(ii) There are no statutes, regulations, contracts or documents that are required to be
described in the Registration Statement, the MJDS Prospectus, the Disclosure Package and the
Prospectus or to be filed as exhibits to the Registration Statement by the Securities Act or by the
Rules and Regulations that have not been so described or filed.
(jj) The Company is not and, after giving effect to the offering and sale of the Shares and
Warrants and the application of the proceeds thereof, will not be an investment company, as such
term is defined in the Investment Company Act of 1940, as amended (the Investment Company Act).
(kk) At the earliest time after the filing of the Registration Statement that the Company or
another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the
Securities Act) of the Shares and Warrants and at the date hereof, the Company was not and is not
an ineligible issuer, as defined in Rule 405 under the Securities Act, in the preceding three
years not having been convicted of a felony or misdemeanor or having been made the subject of a
judicial or administrative decree or order as described in Rule 405 (without taking account of any
determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be
considered an ineligible issuer), nor an excluded issuer as defined in Rule 164 under the
Securities Act.
(ll) The Company has not distributed and will not distribute any prospectus or other offering
material in connection with the offering and sale of the Shares and Warrants other than the
Disclosure Package or the Prospectus, or other materials permitted by the Securities Act to be
distributed by the Company; provided, however, that, except as set forth on Schedule II,
the Company has not made and will not make any offer relating to the Shares and Warrants that would
constitute a free writing prospectus as defined in Rule 405 under the Securities Act, except in
accordance with the provisions of Section 7(a) of this Agreement.
(mm) The Common Stock of the Company is registered pursuant to Section 12(b) of the Exchange
Act and is listed on the NASDAQ Capital Market under the ticker symbol OGXI. The Company
12
has taken no action designed to, or 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 Capital
Market nor has the Company received any notice that it is not in compliance with the listing or
maintenance requirements of the NASDAQ Capital Market. The Company believes that it is, and has no
reason to believe that it will not in the foreseeable future continue to be, in material compliance
with all such listing and maintenance requirements. Except as described in the Registration
Statement, the MJDS Prospectus, the Disclosure Package and the Prospectus, there are no
affiliations among the Companys directors and officers and members of FINRA. A registration
statement relating to the Common Stock on Form 8-A or other applicable form under the Exchange Act
has become effective.
(nn) Ernst & Young LLP, who has certified certain financial statements of the Company and its
Subsidiaries filed as a part of the Registration Statement and included in the Registration
Statement, the MJDS Prospectus, the Disclosure Package and the Prospectus, is (i) an independent
public accounting firm as required by the Securities Act and the Rules and Regulations; (ii) a
registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act); and
(iii) in the performance of its work for the Company, not in violation of the auditor independence
requirements of the Sarbanes-Oxley Act and the rules and regulations of the Commission thereunder.
(oo) The financial statements of the Company and its Subsidiaries (including all notes and
schedules thereto) set forth or incorporated by reference in the Registration Statement, the MJDS
Prospectus, the Disclosure Package and the Prospectus comply in all material respects with the
requirements of the Securities Act and the Exchange Act (and exemptive relief having been received
from the BCSC, from the requirement in NI 71-101 to include in the MJDS Prospectus a reconciliation
to Canadian generally accepted accounting principles of the Companys financial statements
incorporated by references into the MJDS Prospectus) and present fairly the financial
position of the Company and its consolidated Subsidiaries at the dates indicated and the statement
of operations, stockholders equity and cash flows of the Company and its Subsidiaries for the
periods specified in conformity with generally accepted accounting principles in the United States
(GAAP), consistently applied throughout the periods involved; and the summary and selected
financial data included in the Registration Statement, the MJDS Prospectus, the Disclosure Package
and the Prospectus present fairly the information shown therein as at the respective dates and for
the respective periods specified and are derived from the consolidated financial statements set
forth in the Registration Statement, the MJDS Prospectus, the Disclosure Package and the Prospectus
and other accounting records of the Company. No other schedules or financial statements are
required to be included in the Registration Statement, the MJDS Prospectus, the Disclosure Package
and the Prospectus. Except as described in the Disclosure Package and the Prospectus,
there are no material off-balance sheet transactions, arrangements, obligations (including
contingent obligations), or any other relationships with unconsolidated entities or other persons,
that may have a material current or, to the Companys knowledge, future effect on the Companys
financial condition, changes in financial condition, results of operations, liquidity, capital
expenditures, capital resources or significant components of revenue or expenses. All non-GAAP
financial information included in the Registration Statement, the MJDS Prospectus, the Disclosure
Package and the Prospectus complies with the requirements of Regulation G and Item 10 of Regulation
S-K under the Securities Act.
(pp) The Company maintains a system of internal control over financial reporting (as such term
is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the
Exchange Act and has been designed by the Companys principal executive officer and principal
financial officer, or under their supervision, to provide reasonable assurances that (i)
transactions are executed in accordance with managements general or specific authorization; (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
13
is permitted only in accordance with managements general or specific authorization; and (iv)
the recorded accountability for assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. The Companys internal control over
financial reporting is effective. The Companys board of directors has, subject to the exceptions,
cure periods and the phase in periods specified in the applicable stock exchange rules (Exchange
Rules), validly appointed an audit committee to oversee internal accounting controls whose
composition satisfies the applicable requirements of the Exchange Rules and the Companys board of
directors and/or the audit committee has adopted a charter that satisfies the requirements of the
Exchange Rules.
(qq) Neither the Companys board of directors nor the audit committee has been informed, nor
is any director of the Company or the Company aware, of (i) during the past 36 months, any
significant deficiencies or material weaknesses (each as defined by the Public Company
Accounting Oversight Board) in the design or operation of the Companys internal controls that
could adversely affect the Companys ability to record, process, summarize and report financial
data; or (ii) any fraud, whether or not material, that involves management or other employees of
the Company who have a significant role in the Companys internal controls.
(rr) Since the date of the latest audited financial statements of the Company included in the
Prospectus, there has been no change in the Companys internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the Companys internal
control over financial reporting (other than as set forth in the Disclosure Package and the
Prospectus).
(ss) The Company maintains disclosure controls and procedures (as such term is defined in Rule
13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act, such
disclosure controls and procedures have been designed to ensure that material information relating
to the Company and its Subsidiaries is made known to the Companys principal executive officer and
principal financial officer by others within those entities, and such disclosure controls and
procedures are effective. The Company has utilized such controls and procedures in preparing and
evaluating the disclosures in the Registration Statement, the MJDS Prospectus, the Disclosure
Package and the Prospectus.
(tt) No relationship, direct or indirect, exists between or among the Company, on the one
hand, and the directors or officers or, to the knowledge of the Company, stockholders, customers or
suppliers of the Company, on the other hand, which is required to be described in the Registration
Statement, the MJDS Prospectus, the Disclosure Package and the Prospectus and which is not so
described. There are no outstanding loans, advances or guarantees of indebtedness by the Company
to or for the benefit of any of the executive officers or directors of the Company in violation of
applicable laws, including Section 402 of the Sarbanes-Oxley Act.
(uu) To the actual knowledge of the Company, no person associated with or acting on behalf of
the Company, including without limitation any director, officer, agent or employee of the Company
or its Subsidiaries has, directly or indirectly, while acting on behalf of the Company or its
Subsidiaries (i) used any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; (ii) made any unlawful payment to foreign or
domestic government officials or employees or to foreign or domestic political parties or campaigns
from corporate funds; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as
amended; or (iv) made any other unlawful payment.
(vv) Except as contemplated by this Agreement and as disclosed in the Registration Statement,
the MJDS Prospectus, the Disclosure Package and the Prospectus, no person is entitled to receive
14
from the Company a brokerage commission, finders fee or other like payment in connection with
the transactions contemplated herein.
(ww) The Company has not taken, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in, or which has constituted, the stabilization or
manipulation of the price of any security of the Company to facilitate the sale or resale of the
Shares and Warrants, and has not effected any sales of Common Stock which are required to be
disclosed in response to Item 701 of Regulation S-K under the Securities Act which have not been so
disclosed in the Registration Statement.
(xx) To enable the Underwriters to rely on Rule 5110(b)(7)(C)(i) of FINRA, the Company
represents that, it (i) satisfies the requirements set forth in instruction I.B.1 of the
Commissions Form S-3 in effect prior to October 21, 1992 and (ii) has been subject to the
Exchange Act reporting requirements for a period of at least 36 months.
(yy) Neither the Company nor any of its Subsidiaries or controlled affiliates does business
with the government of, or with any person located in any country in a manner that violates in any
material respect any of the economic sanctions programs or similar sanctions-related measures of
the United States as administered by the United States Treasury Departments Office of Foreign
Assets Control; and the net proceeds from this offering will not be used to fund any operations in,
finance any investments in or make any payments to any country, or to make any payments to any
person, in a manner that violates any of the economic sanctions of the United States administered
by the United States Treasury Departments Office of Foreign Assets Control.
(zz) Neither the Company nor any of its Subsidiaries or controlled affiliates does business
with the government of Cuba or with any person located in Cuba within the meaning of Section
517.075, Florida Statutes.
(aaa) The Company and its board of directors have taken all necessary action, if any, in order
to render inapplicable any control share acquisition, business combination, poison pill (including
any distribution under a rights agreement) or other similar anti-takeover provision under the
Companys charter documents or the laws of its state of incorporation that is or could reasonably
be expected to become applicable to the Underwriters as a result of the Underwriters and the
Company fulfilling their respective obligations or exercising their respective rights under this
Agreement, including, without limitation, the Companys issuance of the Shares and Warrants and the
Underwriters ownership of the Shares and Warrants.
2. Subject to the terms and conditions herein set forth, the Company agrees to sell to each of
the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from
the Company, at a purchase price per Unit of $14.805, the number of Shares and Warrants (to be
adjusted by the Representative so as to eliminate fractional Shares and Warrants) determined by
multiplying the aggregate number of Shares and Warrants to be sold by the Company by a fraction,
the numerator of which is the aggregate number of Shares and Warrants to be purchased by such
Underwriter as set forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the aggregate number of Shares and Warrants to be purchased by all of the
Underwriters from the Company hereunder.
3. Upon the authorization by the Representative of the release of the Shares and Warrants, the
several Underwriters propose to offer the Shares and Warrants for sale upon the terms and
conditions set forth in the Prospectus.
15
4. (a) The Shares to be purchased by each Underwriter hereunder will be represented by one or
more definitive global shares in book-entry form, which will be deposited by or on behalf of the
Company with the Depository Trust Company (DTC) or its designated custodian. The Warrants to be
purchased by each Underwriter hereunder will be in physical, certificated form. The Company will
deliver the Shares and Warrants as directed by the Representative, for the account of each
Underwriter, against payment by or on behalf of each such Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account specified by the Company to
the Representative, by (i) in the case of the Shares, causing DTC to credit the Shares to the
account of the Representative at DTC and (ii) in the case of the Warrants, physical delivery as
directed by the Representative. The time and date of such delivery and payment shall be, with
respect to the Shares and Warrants, 10:00 a.m., New York time, on October 22, 2010, or such other
time and date as the Representative and the Company may agree upon in writing. Such time and date
for delivery of the Shares and Warrants is herein called the Time of Delivery.
(b) The documents to be delivered at the Time of Delivery by or on behalf of the parties
hereto pursuant to Section 9 hereof, including the cross receipt for the Shares and Warrants and
any additional documents requested by the Underwriters pursuant to Section 9(r) hereof, will be
delivered at the offices of Goodwin Procter LLP at The New York Times Building, 620 Eighth Avenue,
New York, New York (the Closing Location), and the Shares will be delivered at the office of DTC
or its designated custodian (the Designated Office), and the Warrants will be delivered as
directed by the Representative, all at the Time of Delivery.
(c) For the purposes of this Agreement, New York Business Day shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New
York City are generally authorized or obligated by law or executive order to close.
5. The Company acknowledges and agrees that (a) the purchase and sale of the Shares and
Warrants pursuant to this Agreement is an arms-length commercial transaction between the Company,
on the one hand, and the several Underwriters, on the other; (b) in connection therewith and with
the process leading to such transaction, each Underwriter is acting solely as a principal and not
the agent or fiduciary of the Company; (c) no Underwriter has assumed an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated hereby or the
process leading thereto (irrespective of whether such Underwriter has advised or is currently
advising the Company on other matters) or any other obligation to the Company except the
obligations expressly set forth in this Agreement; (d) the Company has consulted its own legal and
financial advisors to the extent it deemed appropriate and is capable of evaluating and
understanding and understands and accepts the terms, risks and conditions of the transactions
contemplated by this Agreement; (e) the Company has been advised that each of the Underwriters and
their affiliates is engaged in a broad range of transactions which may involve interests that
differ from those of the Company and that the Underwriters have no obligation to disclose such
interest and transactions to the Company by virtue of any fiduciary, advisory or agency
relationship; (f) the Company has been advised that each of the Underwriters is acting, in respect
of the transactions contemplated by this Agreement, solely for the benefit of each such
Underwriter, and not on behalf of the Company; and (g) the Company waives to the fullest extent
permitted by law, any claims it may have against any Underwriter for breach of fiduciary duty or
alleged breach of fiduciary duty in respect of any of the transactions contemplated by this
Agreement and agrees that no Underwriter shall have any liability (whether direct or indirect) to
the Company in respect of such a fiduciary duty claim on behalf of or in right of the Company,
including stockholders, employees or creditors of the Company.
This Agreement supersedes all prior agreements and understandings (whether written or oral)
between the Company, on the one hand, and the Underwriters, or any of them, on the other, with
respect to the subject matter hereof.
16
The Company and each of the Underwriters hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby.
6. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by the Representative and to file (i) the
Prospectus pursuant to Rule 424(b) under the Securities Act not later than the Commissions close
of business on the first New York Business Day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the
Securities Act and (ii) the Prospectus with the BCSC pursuant to NI 71-101 within the time period
prescribed by NI 71-101; during the period beginning on the date hereof and ending on the later of
the Time of Delivery and the date, as determined in the opinion of counsel for the Underwriters,
that the Prospectus is no longer required by law to be delivered (assuming the absence of Rule 172
of the Securities Act) in connection with the sales by an underwriter or a dealer (the Prospectus
Delivery Period), to furnish to the Underwriters for review a copy of any proposed amendment or
supplement to the Registration Statement, the MJDS Prospectus, the Disclosure Package or the
Prospectus; to make no amendment or supplement to the Registration Statement, the MJDS Prospectus,
the Disclosure Package or the Prospectus during the Prospectus Delivery Period to which the
Underwriters or their counsel reasonably objects; to advise the Underwriters, promptly after the
Company receives notice thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Disclosure Package or the Prospectus or
any amended Prospectus has been filed and to furnish the Underwriters with copies thereof; to file
promptly all material required to be filed by the Company with the Commission pursuant to Rule
433(d) under the Securities Act or as may be required by the BCSC; to advise the Underwriters,
promptly after it receives notice or obtains knowledge thereof, of the issuance by the Commission
of any stop order or of any order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or preventing or suspending the use of any Preliminary Prospectus,
the Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, of the suspension of
the qualification of the Shares and Warrants 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 or the BCSC for the amending or supplementing of the Registration Statement, the MJDS
Prospectus, the Disclosure Package or the Prospectus or for additional information; to use its best
efforts to prevent and to promptly use its best efforts to obtain the withdrawal of any such order.
(b) During the Prospectus Delivery Period, to comply with all requirements imposed upon it by
the Securities Act and by the Rules and Regulations and by the Exchange Act and by NI 71-101 so far
as necessary to permit the continuance of sales of or dealings in the Shares and Warrants as
contemplated by the provisions of this Agreement, the Disclosure Package and the Prospectus; if,
during the Prospectus Delivery Period, any event shall occur or condition shall exist as a result
of which the Prospectus (or if the Prospectus is not yet available to prospective purchasers, the
Disclosure Package) would include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the circumstances then
existing, not misleading, or if during such period it is necessary to amend or supplement the
Registration Statement and the MJDS Prospectus or supplement the Prospectus (or, if the Prospectus
is not yet available to prospective purchasers, the Disclosure Package) to comply with the
Securities Act, NI 71-101 or to file under the Exchange Act any document which would be deemed to
be incorporated by reference in the Prospectus in order to comply with the Securities Act or the
Exchange Act or NI 71-101, to promptly notify the Underwriters and to amend or supplement the
Registration Statement and the MJDS Prospectus or supplement the Prospectus (or, if the Prospectus
is not yet available to prospective purchasers, the Disclosure Package) or
17
file such document (at the expense of the Company) so as to correct such statement or omission
or effect such compliance;
(c) Promptly from time to time to take such action as the Underwriters may reasonably request
to qualify the Shares and Warrants for offering and sale under the securities laws of such
jurisdictions as the Underwriters may request (other than a Canadian jurisdiction) and to comply
with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions
for as long as may be necessary to complete the distribution of the Shares and Warrants, provided
that in connection therewith the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any jurisdiction;
(d) To furnish, at its own expense, to the Underwriters and counsel for the Underwriters
copies of the Registration Statement and the MJDS Prospectus (which will include three complete
manually signed copies of the Registration Statement and the MJDS Prospectus and all consents and
exhibits filed therewith), and to the Underwriters and any dealer the Preliminary Prospectus, the
Disclosure Package and the Prospectus and any Issuer Free Writing Prospectus and all amendments and
supplements to such documents, in each case as soon as available and in such quantities as the
Underwriters may from time to time reasonably request;
(e) To make generally available to its securityholders as soon as practicable, but in any
event not later than eighteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earning statement 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);
(f) During the period beginning from the date hereof and continuing to and including the date
90 days after the date of the Prospectus (the Lock-Up Period), not to offer, sell, contract to
sell or otherwise dispose of, except as provided hereunder, any securities of the Company,
including but not limited to any securities that are convertible into or exchangeable for, or that
represent the right to receive, shares of Common Stock or any such substantially similar securities
(other than pursuant to employee stock option plans existing on, or upon the conversion or exchange
of convertible or exchangeable securities outstanding as of, the date of this Agreement), without
the Representatives prior written consent; provided, however, that if (i) during the last 17 days
of the initial Lock-Up Period, the Company releases earnings results or announces material news or
a material event, or (ii) prior to the expiration of the initial Lock-Up Period, the Company
announces that it will release earnings results during the 15-day period following the last day of
the initial Lock-Up Period, then, in each case, the Lock-Up Period will be automatically extended
until the expiration of the 18-day period beginning on the date of release of the earnings results
or the announcement of the material news or material event, as applicable, unless the
Representative waives, in writing, such extension; the Company will provide the Representative with
prior notice of any such announcement that gives rise to an extension of the Lock-Up Period;
(g) To issue stop transfer instructions to the transfer agent for the Common Stock with
respect to any transaction or contemplated transaction that would constitute a breach of or default
under the agreements required by Section 9(l);
(h) Unless otherwise publicly available in electronic format on the website of the Company or
the Commission, to furnish to its stockholders as soon as practicable after the end of each fiscal
year an annual report (including a balance sheet and statements of income, stockholders equity and
cash flows of the Company and its consolidated subsidiaries certified by independent public
accountants) and, as soon as
18
practicable after the end of each of the first three quarters of each fiscal year (beginning
with the fiscal quarter ending after the effective date of the Registration Statement), to make
available to its stockholders consolidated summary financial information of the Company and its
Subsidiaries for such quarter in reasonable detail;
(i) During a period of three years from the effective date of the Registration Statement,
unless otherwise publicly available in electronic format on the website of the Company or the
Commission, to furnish to the Underwriters copies of all reports or other communications (financial
or other) furnished to stockholders, and to deliver to the Underwriters (i) as soon as they are
available, copies of any reports and financial statements furnished to or filed with the
Commission, the BCSC, FINRA or any national securities exchange on which any class of securities of
the Company is listed; and (ii) such additional information concerning the business and financial
condition of the Company as the Underwriters may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of the Company and
its Subsidiaries are consolidated in reports furnished to its stockholders generally or to the
Commission); provided that the Company shall not be required to provide documents the provisions of
which would require public disclosure by the Company under Regulation FD;
(j) To use the net proceeds received by it from the sale of the Shares and Warrants pursuant
to this Agreement in the manner specified in the Prospectus under the caption Use of Proceeds;
(k) Not to take, directly or indirectly, any action designed to or which might reasonably be
expected to cause or result in, or which has constituted, the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the Shares and Warrants,
and not to effect any sales of Common Stock which are required to be disclosed in response to Item
701 of Regulation S-K under the Securities Act which have not been so disclosed in the Registration
Statement and the MJDS Prospectus;
(l) Other than as contemplated by this Agreement, not to incur any liability for any finders
or brokers fee or agents commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby;
(m) During the Prospectus Delivery Period, to file with the Commission such periodic and
special reports as required by the Rules and Regulations and to maintain its status as a reporting
issuer under the BC Securities Laws;
(n) To maintain the controls and other procedures required by Sections 302 and 906 of the
Sarbanes-Oxley Act and the applicable regulations thereunder;
(o) To comply with all applicable provisions of the Sarbanes-Oxley Act;
(p) If the Company elects to rely upon Rule 462(b) under the Securities Act, to file a Rule
462(b) Registration Statement with the Commission in compliance with Rule 462(b) under the
Securities Act (and any filings with the BCSC as may be required by NI 71-101) by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, and, at the time of filing, either to pay to
the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Securities Act, and to
pay any filing fees associated with filings made with the BCSC as may be required by NI 71-101; and
(q) To reserve and keep available at all times a sufficient number of shares of Common Stock
for the purpose of enabling the Company to issue the Warrant Shares.
19
(r) Upon request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter
an electronic version of the Companys trademarks, servicemarks and corporate logo for use on the
website, if any, operated by such Underwriter for the purpose of facilitating the on-line offering
of the Shares and Warrants (the License); provided, however, that the License shall be used
solely for the purpose described above, is granted without any fee and may not be assigned or
transferred.
7. (a) The Company represents and agrees that, without the prior consent of the
Representative, it has not made and will not make any offer relating to the Shares and Warrants
that would constitute a free writing prospectus as defined in Rule 405 under the Securities Act;
each Underwriter represents and agrees that, without the prior consent of the Company and the
Representative, it has not made and will not make any offer relating to the Shares and Warrants
that would constitute a free writing prospectus; any such free writing prospectus the use of which
has been consented to by the Company and the Representative is listed on Schedule II
hereto.
(b) The Company has complied and will comply with the requirements of Rule 433 under the
Securities Act applicable to any Issuer Free Writing Prospectus, including, without limitation,
timely filing with the Commission or retention where required and legending; and the Company
represents that it has satisfied and agrees that it will satisfy the conditions under Rule 433
under the Securities Act to avoid a requirement to file with the Commission any electronic road
show.
(c) The Company agrees that if at any time following issuance of an Issuer Free Writing
Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus
would conflict with the information in the Registration Statement, the MJDS Prospectus, the
Disclosure Package and the Prospectus or would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements therein, in the light of
the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to
the Underwriters and, if requested by the Underwriters, will prepare and furnish without charge to
each Underwriter an Issuer Free Writing Prospectus or other document which will correct such
conflict, statement or omission.
8. The Company covenants and agrees with the several Underwriters that the Company will pay or
cause to be paid the following, whether or not the transactions contemplated hereunder are
consummated or this Agreement is prevented from becoming effective or is terminated: (a) all
expenses (including, without limitation, transfer taxes allocated to the respective transferees) in
connection with the delivery to the Underwriters of the Shares and Warrants; (b) all expenses
(including, without limitation, the fees, disbursements and expenses of the Companys counsel and
accountants) in connection with the preparation, printing, reproduction, filing, delivery and
shipping of the Registration Statement, the MJDS Prospectus, the Preliminary Prospectus, the
Disclosure Package, the Prospectus and any Issuer Free Writing Prospectus, and amendments and
supplements thereto, and the mailing and delivery of copies thereof to the Underwriters and
dealers; (c) the cost of printing or producing, delivery and shipping of any Agreement Among
Underwriters, this Agreement, the Blue Sky Memorandum, closing documents (including, without
limitation, any compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Shares and Warrants; (d) all expenses in connection with the
qualification of the Shares and Warrants for offering and sale under state securities laws as
provided in Section 6(c) hereof, including, without limitation, the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in connection with the Blue
Sky survey; (e) all fees and expenses in connection with listing the Shares and Warrant Shares on
the NASDAQ Capital Market; (f) the filing fees incident to, and the fees and disbursements of
counsel for the Underwriters in connection with, securing any required review by the FINRA and/or
the BCSC of the terms of the sale of the Shares and Warrants; (g) the cost of preparing stock
certificates; (h) the cost and charges of any transfer agent or
20
registrar; (i) costs and expenses of the Company relating to investor presentations or any
roadshow undertaken in connection with the marketing of the Shares and Warrants; (j) all other
costs and expenses incident to the performance of the Companys obligations hereunder which are not
otherwise specifically provided for in this Section 8; and (k) all reasonable out-of-pocket costs
of the Underwriters (including, without limitation, fees and disbursements of counsel) in
connection with the performance of the Underwriters obligations hereunder which are not otherwise
specifically provided for in this Section 8, in an amount not to exceed $100,000 in the aggregate.
9. The obligations of the Underwriters hereunder, as to the Shares and Warrants to be
delivered at the Time of Delivery, shall be subject, in the Underwriters discretion, to the
condition that all representations and warranties and other statements of the Company herein are,
at and as of the Time of Delivery, true and correct in all material respects (except for those
representations and warranties that are qualified by materiality, in which case such
representations and warranties shall be true and correct in all respects), the condition that the
Company shall have performed all of its obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) If filing of the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, is required under the Securities Act or the Rules and Regulations or NI 71-101,
the Company shall have filed the Prospectus (or such amendment or supplement) or such Issuer Free
Writing Prospectus with the Commission or the BCSC in the manner and within the time period so
required by Rule 424(b) or NI 71-101 (without reliance on Rule 424(b)(8) or Rule 164(b)); the
Registration Statement and the MJDS Prospectus shall remain effective; no stop order
suspending the effectiveness of the Registration Statement or any part thereof or any amendment
thereto shall have been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; no stop order suspending or preventing the use of the Disclosure
Package, the Prospectus or any Issuer Free Writing Prospectus shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission or the BCSC shall have been
complied with to the Underwriters reasonable satisfaction;
(b) The Underwriters shall not have advised the Company that (i) the Registration Statement,
the MJDS Prospectus or any amendment thereof or supplement thereto contains an untrue statement of
a material fact which, in the opinion of the Underwriters, is material or omits to state a material
fact which, in the opinion of the Underwriters, is required to be stated therein or necessary to
make the statements therein not misleading; or (ii) the Disclosure Package or the Prospectus, or
any amendment thereof or supplement thereto, or any Issuer Free Writing Prospectus contains an
untrue statement of fact which, in the opinion of the Underwriters, is material, or omits to state
a fact which, in the opinion of the Underwriters, is material and is required to be stated therein,
or necessary to make the statements therein, in light of the circumstances under which they are
made, not misleading;
(c) Goodwin Procter LLP, counsel for the Underwriters, shall have furnished to the
Underwriters an opinion and written statement, dated the Time of Delivery, with respect to the
validity of the Shares, the Warrants, the Registration Statement, the Disclosure Package, the
Prospectus and other related matters as the Underwriters reasonably may request, and such counsel
shall have received such papers and information as they request to enable them to pass upon such
matters;
(d) Dorsey & Whitney, LLP, U.S. counsel for the Company, shall have furnished to the
Underwriters an opinion and written statement, dated the Time of Delivery, in the form attached as
Exhibit B hereto;
21
(e) Dorsey & Whitney, LLP, special intellectual property counsel for the Company, shall have
furnished to the Underwriters an opinion and written statement, dated the Time of Delivery, in the
form attached as Exhibit C hereto;
(f) DuMoulin Black LLP, Canadian counsel for the Company, shall have furnished to the
Underwriters an opinion and written statement, dated the Time of Delivery, in the form attached as
Exhibit D hereto;
(g) On the date of this Agreement and at the Time of Delivery, Ernst & Young LLP shall have
furnished to the Underwriters a letter or letters, dated the respective dates of delivery thereof,
in form and substance satisfactory to the Underwriters, containing statements and information of
the type ordinarily included in accountants comfort letters to underwriters with respect to the
financial statements and certain financial information contained or incorporated by reference in
the Registration Statement, the MJDS Prospectus, the Disclosure Package and the Prospectus;
(h) (i) Neither the Company nor any of its Subsidiaries shall have sustained since the date of
the latest audited financial statements included in the Prospectus 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 or contemplated in the Prospectus; and (ii) since the respective dates as of which
information is given in the Disclosure Package, the Company shall not have incurred any material
liabilities or obligations, direct or contingent, entered into any material transactions or
declared or paid any dividends or made any distribution of any kind with respect to its capital
stock; there shall not have been any change in the capital stock or short-term or long-term debt of
the Company or any of its Subsidiaries; there shall not have been any issuance of options,
warrants, convertible securities or other rights to purchase capital stock of the Company (in each
case, other than as a result of the grant or exercise of stock options under an existing equity
incentive plan of the Company); and there shall not have been any change, or any development
involving a prospective change, in or affecting the business, operations, assets, prospects,
condition (financial or otherwise) or results of operations of the Company and its consolidated
subsidiaries, otherwise than as set forth or contemplated in the Disclosure Package and the
Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in the
judgment of the Representative so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares and Warrants being delivered at
the Time of Delivery on the terms and in the manner contemplated in the Disclosure Package and the
Prospectus;
(i) On or after the Applicable Time there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New York Stock
Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or
the NYSE Amex; (ii) a suspension or material limitation in trading in the Companys securities on
the NASDAQ Capital Market; (iii) a general moratorium on commercial banking activities declared by
either Federal or New York State authorities or a material disruption in commercial banking or
securities settlement or clearance services in the United States; (iv) the outbreak or escalation
of hostilities involving the United States or the declaration by the United States of a national
emergency or war; or (v) the occurrence of any other calamity or crisis or any change in financial,
political or economic conditions in the United States or elsewhere, if the effect of any such event
specified in clause (iv) or (v) in the judgment of the Representative makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares and Warrants being
delivered at the Time of Delivery on the terms and in the manner contemplated in the Disclosure
Package or the Prospectus;
22
(j) The Shares to be sold at the Time of Delivery, and the Warrant Shares to be issued upon
exercise of the Warrants, shall have been duly listed for quotation on the NASDAQ Capital Market;
(k) The Underwriters shall not have received any unresolved objection from FINRA as to the
fairness and reasonableness of the amount of compensation allowable or payable to the Underwriters
in connection with the issuance and sale of the Shares and Warrants;
(l) The Company has obtained and delivered to the Underwriters executed copies of an agreement
from the executive officers and directors of the Company listed on Schedule IV hereto,
substantially to the effect set forth in Exhibit A hereto;
(m) The Company shall have complied with the provisions of Section 6(d) hereof with respect to
the furnishing of prospectuses on the New York Business Day next succeeding the date of this
Agreement;
(n) The Company shall have furnished or caused to be furnished to the Underwriters at the Time
of Delivery certificates of the chief executive officer and the principal financial officer of the
Company satisfactory to the Underwriters as to the accuracy of the representations and warranties
of the Company herein at and as of the Time of Delivery, as to the performance by the Company of
all of its respective obligations hereunder to be performed at or prior to the Time of Delivery,
and as to such other matters as the Underwriters may reasonably request, and the Company shall have
furnished or caused to be furnished certificates as to the matters set forth in subsections (a) and
(h) of this Section;
(o) The Underwriters shall have received at the Time of Delivery a certificate of the
Secretary of the Company;
(p) The Underwriters shall have received at the Time of Delivery a certificate of the
principal financial and accounting officer of the Company in form and substance satisfactory to the
Representative;
(q) At the Time of Delivery, counsel for the Underwriters shall have been furnished with such
information, certificates and documents as it may reasonably require for the purpose of enabling it
to pass upon the issuance and sale of the Shares and Warrants as contemplated herein and related
proceedings, or to evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained, or otherwise in connection with the
offering of the Shares and Warrants contemplated hereby; and
(r) The Company shall have furnished to the Underwriters such additional documents,
certificates and evidence as the Underwriters may have reasonably requested.
All such opinions, certificates, letters and other documents mentioned above and elsewhere in
this Agreement will be in compliance with the provisions hereof only if they are satisfactory in
form and substance to the Underwriters and their counsel. The Company will furnish the
Underwriters with such conformed copies of such opinions, certificates, letters and other documents
as the Underwriters shall reasonably request.
10. (a) The Company will indemnify and hold harmless each Underwriter from and against any
losses, claims, damages or liabilities, joint or several, to which such Underwriter may become
subject, under the
23
Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, including the 430B
Information and any other information deemed to be part of the Registration Statement at the time
of effectiveness and at any subsequent time pursuant to the Rules and Regulations, if applicable,
the MJDS Prospectus, any Preliminary Prospectus, the Disclosure Package or the Prospectus, or any
amendment or supplement thereto, or any Issuer Free Writing Prospectus, or any materials or
information provided to investors by, or at the instruction of, the Company in connection with the
marketing or the offering of the Shares and Warrants (the Marketing Materials), including,
without limitation, any roadshow or investor presentations made to investors by the Company
(whether in person or electronically), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter in connection with investigating or defending any
such action or claim as such 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 or liability arises out
of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, the MJDS Prospectus, any Preliminary Prospectus, the Disclosure
Package or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing
Prospectus or any Marketing Materials, in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter through the Representative
expressly for use therein; it being understood and agreed that the only such information furnished
by or on behalf of any Underwriter through the Representative consists of the information described
as such in Section 10(f); and will reimburse the Underwriters for any legal or other expenses
reasonably incurred by the Underwriters in connection with investigating or defending any such
action or claim as such expenses are incurred.
(b) Each Underwriter, severally and not jointly, will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, the MJDS Prospectus, any Preliminary
Prospectus, the Disclosure Package or the Prospectus, or any amendment or supplement thereto, or
any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the MJDS Prospectus, any Preliminary Prospectus, the Disclosure Package or
the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in
reliance upon and in conformity with written information furnished to the Company by or on behalf
of any Underwriter through the Representative expressly for use therein; it being understood and
agreed that the only such information furnished by or on behalf of any Underwriter through the
Representative consists of the information described as such in Section 10(f); and will reimburse
the Company for any legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice
of the commencement of any action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party except to the extent that
such indemnifying party has been materially prejudiced by such failure. In case any such action
shall be brought against any indemnified party
24
and it shall notify the indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional release of the
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.
(d) If the indemnification provided for in this Section 10 is unavailable to or insufficient
to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Shares and Warrants. If, however,
the allocation provided by the immediately preceding sentence is not permitted by applicable law or
if the indemnified party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or liabilities (or actions
in respect thereof), as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall be deemed to be in
the same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The
relative fault 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 Underwriters on the
other and the parties relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to above
in this subsection (d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Shares and
Warrants underwritten by it and distributed to the public were offered to the public exceeds the
amount of any damages which such Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
25
misrepresentation. The Underwriters obligations in this subsection (d) to contribute are
several in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 10 shall be in addition to any liability
which the Company may otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Securities Act; and the
obligations of any Underwriter under this Section 10 shall be in addition to any liability which
the respective Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to director of the Company (including any person who, with his or her consent, is named
in the Registration Statement as about to become a director of the Company), to each officer of the
Company who has signed the Registration Statement and to each person, if any, who controls the
Company within the meaning of the Securities Act.
(f) The Underwriters confirm and the Company acknowledges that the statements with respect to
the public offering of the Shares and Warrants by the Underwriters set forth in the fourth, seventh
and twelfth paragraphs under the caption Underwriting in the Disclosure Package and the
Prospectus are correct and constitute the only information concerning the Underwriters furnished in
writing to the Company by or on behalf of any Underwriter through the Representative expressly for
use in the Registration Statement, the MJDS Prospectus, any Preliminary Prospectus, the Disclosure
Package, the Prospectus, or any Issuer Free Writing Prospectus.
11. The Underwriters shall have the right to terminate this Agreement by giving notice to the
Company as hereinafter specified at any time at or prior to the Time of Delivery, if (a) the
Company shall have failed, refused or been unable, at or prior to such closing date, to perform any
agreement on its part to be performed hereunder; (b) any other condition of the Underwriters
obligations hereunder is not fulfilled; (c) trading on the New York Stock Exchange, the NASDAQ
Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the NYSE Amex shall
have been suspended; (d) minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, on the New York Stock Exchange, the
NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the NYSE Amex,
by such exchange or by order of the Commission or any other Regulatory Body having jurisdiction;
(e) a banking moratorium shall have been declared by federal or state authorities or Canadian
authorities; or (f) there shall have occurred any outbreak or escalation of hostilities, any change
in financial markets or any calamity or crisis that, in the Representatives judgment, is material
and adverse and makes it impractical or inadvisable to proceed with the completion of the sale of
and payment for the Shares and Warrants. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 8 and Section 10 hereof shall at all
times be effective and shall survive such termination. If the Underwriters elect to terminate this
Agreement as provided in this Section 11, the Company shall be notified promptly by the
Underwriters by telephone, confirmed by letter.
12. (a) If any Underwriter shall default in its obligation to purchase the Shares and Warrants
which it has agreed to purchase hereunder at the Time of Delivery, the Representative may in its
discretion arrange for the Representative or another party or other parties to purchase such Shares
and Warrants on the terms contained herein. If within thirty-six hours after such default by any
Underwriter the Representative does not arrange for the purchase of such Shares and Warrants, then
the Company shall be entitled to a further period of thirty-six hours within which to procure
another party or other parties satisfactory to the Representative to purchase such Shares and
Warrants on such terms. In the event that, within the respective prescribed periods, the
Representative notifies the Company that it has so arranged for the purchase of such Shares and
Warrants, or the Company notifies the Representative that it has so arranged for the purchase of
such Shares and Warrants, the Representative or the Company shall have the right to postpone the
Time of Delivery for a period of not
26
more than seven days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement, the MJDS Prospectus, the Disclosure Package or the Prospectus, or in any
other documents or arrangements, and the Company agrees to file promptly any amendments or
supplements to the Registration Statement, the MJDS Prospectus, the Disclosure Package or the
Prospectus which in the Representatives opinion may thereby be made necessary. The term
Underwriter as used in this Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to this Agreement with respect to
such Shares and Warrants.
(b) If, after giving effect to any arrangements for the purchase of the Shares and Warrants of
a defaulting Underwriter or Underwriters by the Representative and the Company as provided in
subsection (a) above, the aggregate number of such Shares and Warrants which remain unpurchased
does not exceed one-eleventh of the aggregate number of all the Shares and Warrants to be purchased
at the Time of Delivery, then the Company shall have the right to require each non-defaulting
Underwriter to purchase the number of Shares and Warrants which such Underwriter agreed to purchase
hereunder at the Time of Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares and Warrants which such Underwriter
agreed to purchase hereunder) of the Shares and Warrants of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Shares and Warrants of
a defaulting Underwriter or Underwriters by the Representative and the Company as provided in
subsection (a) above, the aggregate number of such Shares and Warrants which remains unpurchased
exceeds one-eleventh of the aggregate number of all of the Shares and Warrants to be purchased at
the Time of Delivery, or if the Company shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Shares and Warrants of a defaulting
Underwriter or Underwriters, then this Agreement shall thereupon terminate, without liability on
the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by
the Company and the Underwriters as provided in Section 8 hereof and the indemnity and contribution
agreements in Section 10 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
13. The respective indemnities, agreements, representations, warranties and other statements
of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company or any officer or
director or controlling person of the Company, and shall survive delivery of and payment for the
Shares and Warrants.
14. If this Agreement shall be terminated pursuant to Section 12(b) hereof, the Company shall
not then be under any liability to any Underwriter except as provided in Sections 10 and 14 hereof;
but, except as otherwise provided in this Agreement, if for any other reason any Shares and
Warrants are not delivered by or on behalf of the Company as provided herein, the Company will
reimburse the Underwriters for all out-of-pocket expenses, including, without limitation, fees and
disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the
purchase, sale and delivery of the Shares and Warrants not so delivered, but the Company shall then
be under no further liability to any Underwriter in respect of the Shares and Warrants not so
delivered, except as provided in Sections 10 and 14 hereof.
27
15. In all dealings hereunder, the Representative shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by the Representative.
All statements, requests, notices and agreements hereunder shall be in writing, and if to the
Underwriters shall be delivered or sent by mail, telex or facsimile transmission to the
Representative as follows: Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, Suite
3700, San Francisco, California 94104, Attention: General Counsel; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth
in the Registration Statement, Attention: Secretary. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
16. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters
and the Company and, to the extent provided in Sections 10 and 13 hereof, the officers and
directors of the Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Shares
and Warrants from any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
17. Time shall be of the essence of this Agreement.
18. This Agreement may not be amended or modified unless in writing by all of the parties
hereto, and no condition herein (express or implied) may be waived unless waived in writing by each
party whom the condition is meant to benefit. The Section headings herein are for the convenience
of the parties only and shall not affect the construction or interpretation of this Agreement.
19. This Agreement shall be governed by and construed in accordance with the laws of the State
of New York.
20. This Agreement may be executed by any one or more of the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
21. Notwithstanding anything herein to the contrary, the Company is authorized to disclose to
any persons the U.S. federal and state income tax treatment and tax structure of the potential
transaction contemplated by this Agreement and all materials of any kind (including, without
limitation, tax opinions and other tax analyses) provided to the Company relating to that treatment
and structure, without the Underwriters imposing any limitation of any kind. However, any
information relating to the tax treatment and tax structure shall remain confidential (and the
foregoing sentence shall not apply) to the extent necessary to enable any person to comply with
securities laws. For this purpose, tax structure is limited to any facts that may be relevant to
that treatment.
28
If the foregoing is in accordance with your understanding, please sign and return to us one
for the Company plus one for counsel of any counterparts hereof, and upon the acceptance hereof by
the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement
between the Underwriters and the Company.
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Very truly yours,
OncoGenex Pharmaceuticals, Inc.
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By: |
/s/ Cameron Lawrence
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Name: |
Cameron Lawrence |
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Title: |
Principal Financial Officer |
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Accepted as of the date hereof at San Francisco, California
Stifel, Nicolaus & Company, Incorporated
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By: |
/s/
Seth Rubin
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Name: |
Seth Rubin |
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Title: |
Managing Director |
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For itself and on behalf of each of the Underwriters
SCHEDULE I
UNDERWRITERS
|
|
|
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|
|
|
|
|
|
|
Total Number of |
|
Total Number of |
|
|
Shares |
|
Warrants |
Underwriters |
|
to be Purchased |
|
to be Purchased |
Stifel, Nicolaus & Company, Incorporated |
|
|
2,063,490 |
|
|
|
1,031,745 |
|
Needham & Company, LLC |
|
|
380,952 |
|
|
|
190,476 |
|
Rodman & Renshaw, LLC |
|
|
365,080 |
|
|
|
182,540 |
|
Wedbush
Morgan Securities, Inc. |
|
|
365,080 |
|
|
|
182,540 |
|
|
|
|
|
|
|
|
|
|
Total |
|
|
3,174,602 |
|
|
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1,587,301 |
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SCHEDULE II
ISSUER FREE WRITING PROSPECTUSES
None.
SCHEDULE III
PRICING INFORMATION
Purchase Price Per Unit: $15.75
Number of Shares Offered: 3,174,602
Number of Warrants Offered: 1,587,301
Underwriting Discount: 6.0%
Time of Delivery: October 22, 2010
SCHEDULE IV
EXECUTIVE OFFICERS AND DIRECTORS EXECUTING LOCKUP AGREEMENTS
Scott Cormack
Cindy Jacobs
Cameron Lawrence
Jack Goldstein
Michelle Burris
Neil James Clendeninn
Martin Mattingly
Stewart Parker
David Smith
EXHIBIT A
FORM OF LOCKUP AGREEMENT
_________, 2010
Stifel, Nicolaus & Company, Incorporated
As Representative of the Several Underwriters
One Montgomery Street
Suite 3700
San Francisco, California 94104
Re: Offering of Common Stock and Warrants of OncoGenex Pharmaceuticals, Inc.
Ladies and Gentlemen:
The undersigned understands that you, as representative of the underwriters (the
Underwriters), propose to enter into an Underwriting Agreement with OncoGenex Pharmaceuticals,
Inc., a Delaware corporation (the Company), providing for an offering of shares (the Shares) of
common stock, par value $0.001 per share, of the Company (the Common Stock), and warrants to
purchase shares of Common Stock (the Warrants), pursuant to a Registration Statement on Form S-3
filed with the Securities and Exchange Commission (the SEC).
In consideration of the agreement by the Underwriters to offer and sell the Shares and
Warrants, and of other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the undersigned agrees that, during the period specified in the following
paragraph (the Lock-Up Period), the undersigned will not offer, sell, contract to sell, pledge
(except a pledge for the benefit of the Company pursuant to an agreement entered or to be entered
into between the Company and the undersigned), grant any option to purchase, make any short sale or
otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock of the
Company, or any options or warrants to purchase any shares of Common Stock of the Company, or any
securities convertible into, exchangeable for or that represent the right to receive shares of
Common Stock of the Company, whether now owned or hereafter acquired, owned directly by the
undersigned (including holding as a custodian) or with respect to which the undersigned has
beneficial ownership within the rules and regulations of the SEC (collectively the Undersigneds
Shares); provided, however, that (i) during the Lock-Up Period, the undersigned shall be permitted
to exercise any options of the Company that the undersigned owns directly (including holding as a
custodian) or with respect to which the undersigned has beneficial ownership within the rules and
regulations of the SEC, which options, under their terms, expire on or before March 31, 2011 (the
Options), provided that any such shares issued upon exercise of such Options shall continue to be
subject to the applicable provisions of this Lock-Up Agreement and (ii) during the period beginning
on the date that is 71 days after the offering date set forth on the final prospectus used to sell
the Shares and Warrants and ending on the last day of the Lock-Up Period, the restrictions set
forth in this paragraph shall no longer apply with respect to sales of the Undersigneds Shares,
the proceeds of which shall be used solely to cover expenses and tax obligations incurred by the
undersigned in connection with the exercise the Options as provided in clause (i) above. The
foregoing restriction is expressly agreed to preclude the undersigned from engaging in any hedging
or other transaction which is designed to or which reasonably could be expected to lead to or
result in a sale or disposition of the Undersigneds Shares even if such Undersigneds Shares would
be disposed of by someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any purchase, sale or grant of any
right (including without limitation any put or call option) with respect to
any of the Undersigneds Shares or with respect to any security that includes, relates to, or
derives any significant part of its value from such Undersigneds Shares (regardless of whether any
of the transactions described herein is to be settled by delivery of Common Stock of the Company,
or such other securities, in cash or otherwise). Further, the undersigned agrees not to make any
demand for, or exercise any right with respect to, the registration of any shares of Common Stock
of the Company or securities convertible into or exercisable or exchangeable for Common Stock of
the Company during the Lock-Up Period.
The initial Lock-Up Period will commence on the date of this Lock-Up Agreement and continue
for 90 days after the offering date set forth on the final prospectus used to sell the Shares and
Warrants (the Offering Date) pursuant to the Underwriting Agreement; provided, however, that if
(1) during the last 17 days of the initial Lock-Up Period, the Company releases earnings results or
announces material news or a material event or (2) prior to the expiration of the initial Lock-Up
Period, the Company announces that it will release earnings results during the 15-day period
following the last day of the initial Lock-Up Period, then in each case the Lock-Up Period will be
automatically extended until the expiration of the 18-day period beginning on the date of release
of the earnings results or the announcement of the material news or material event, as applicable,
unless Stifel, Nicolaus & Company, Incorporated waives, in writing, such extension.
The undersigned hereby acknowledges that the Company has agreed in the Underwriting Agreement
to provide written notice of any event that would result in an extension of the Lock-Up Period
pursuant to the previous paragraph to the undersigned and agrees that any such notice properly
delivered will be deemed to have been given to, and received by, the undersigned. The undersigned
hereby further agrees that, prior to engaging in any transaction or taking any other action that is
subject to the terms of this Lock-Up Agreement during the period from the date of this Lock-Up
Agreement to and including the 34th day following the expiration of the initial Lock-Up Period, it
will give notice thereof to the Company and will not consummate such transaction or take any such
action unless it has received written confirmation from the Company that the Lock-Up Period (as
such may have been extended pursuant to the previous paragraph) has expired.
Notwithstanding the foregoing, the undersigned may transfer the Undersigneds Shares (i) as a
bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by
the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the
undersigned or the immediate family of the undersigned, provided that the trustee of the trust
agrees to be bound in writing by the restrictions set forth herein, and provided further that any
such transfer shall not involve a disposition for value, or (iii) with the prior written consent of
Stifel, Nicolaus & Company, Incorporated. For purposes of this Lock-Up Agreement, immediate
family shall mean any relationship by blood, marriage or adoption, not more remote than first
cousin. The undersigned now has, and, except as contemplated by clause (i), (ii), or (iii) above,
for the duration of this Lock-Up Agreement will have, good and marketable title to the
Undersigneds Shares, free and clear of all liens, encumbrances and claims whatsoever. The
undersigned agrees and consents to the entry of stop transfer instructions with the Companys
transfer agent and registrar against the transfer of the Undersigneds Shares except in compliance
with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are relying upon this
Lock-Up Agreement in proceeding toward consummation of the offering. The undersigned hereby
represents and warrants that it has full power and authority to enter into this Lock-Up Agreement
and that upon request, the undersigned will execute any additional documents reasonably necessary
or desirable in connection with the enforcement hereof. The undersigned further understands that
this Lock-Up Agreement is irrevocable and shall be binding upon the undersigneds heirs, legal
representatives, successors, and assigns.
This Lock-Up Agreement shall lapse and become null and void upon written notice from the
Company to the Underwriters that the Company does not intend to proceed with the offering or wishes
to terminate the engagement of the Underwriters as underwriters of the offering.
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Very truly yours, |
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Exact Name of Stockholder
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Authorized Signature
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Title
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EXHIBIT B
FORM OF OPINION OF U.S. COUNSEL
EXHIBIT C
FORM OF OPINION OF INTELLECTUAL PROPERTY COUNSEL
EXHIBIT D
FORM OF OPINION OF CANADIAN COUNSEL
EXHIBIT E
FORM OF WARRANT