ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On January 22, 2020, Zymeworks Inc. (Zymeworks or the Company) entered into an underwriting agreement (the Underwriting
Agreement) with J.P. Morgan Securities LLC and Citigroup Global Markets Canada Inc. as representatives of the several underwriters named in Schedule II thereto (the Underwriters), relating to the issuance and sale of 4,924,729 of
the Companys common shares and, in lieu of common shares, to a certain investor, pre-funded warrants to purchase up to 1,075,271 common shares (together the Offered Securities). The common
shares are being offered at a price to the public of US$46.50 per share and the pre-funded warrants are being offered at a price of US$46.4999 per pre-funded warrant
(the Offering), which will result in approximately US$261.7 million of net proceeds to the Company after deducting underwriting discounts and commissions and estimated offering expenses payable by us. In addition, the Company
granted the Underwriters a 30-day option to purchase up to an additional 900,000 common shares to cover over-allotments, if any. The Offering is expected to close on or about January 27, 2020, subject to
customary closing conditions.
The Offering is being made pursuant to the Companys effective automatic shelf registration statement on Form S-3ASR (No. 333-234517) previously filed with the Securities and Exchange Commission (SEC), including the prospectus, dated November 5, 2019, and the
prospectus supplement, dated January 22, 2020. The offering is also being made in Canada pursuant to the Companys prospectus supplement dated June 22, 2020 to its Canadian short form base shelf prospectus dated November 18, 2019 filed
with the securities regulatory authorities in each of the provinces and territories of Canada.
The Underwriting Agreement contains customary
representations, warranties and agreements by the Company, conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended, and other obligations of the
parties and termination provisions. The representations, warranties and covenants contained in the Underwriting Agreement were made only for the purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such
agreement and may be subject to limitations agreed upon by the contracting parties. In addition, pursuant to the terms of the Underwriting Agreement, the Company and the executive officers and directors of the Company have entered into lock-up agreements with the Underwriters, which generally prohibit the sale, transfer or other disposition of common shares of the Company or securities convertible into, exchangeable for, exercisable
for or repayable with common shares of the Company for a 90-day period with respect to the Company and a 60-day period with respect to the Companys executive
officers and directors, subject to certain exceptions. The foregoing restrictions do not apply, among other limited exceptions, to sales of up to an aggregate of 50,000 of the Companys common shares on the open market by all directors and
employees that have entered into lock-up agreements, collectively, beginning 45 days after the date of the prospectus supplement.
The foregoing is only a brief description of the terms of the Underwriting Agreement and the transactions contemplated thereby, and is qualified in its
entirety by reference to the Underwriting Agreement that is filed as Exhibit 1.1 hereto.