Exhibit 1.1
_________ SHARES
EYETECH PHARMACEUTICALS, INC.
COMMON STOCK, PAR VALUE $.01 PER SHARE
UNDERWRITING AGREEMENT
__________, 2004
__________, 2004
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
As Representatives of the Several Underwriters
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs and Mesdames:
Certain shareholders of Eyetech Pharmaceuticals, Inc., a Delaware
corporation (the "COMPANY"), named in Schedule I hereto (each, a "SELLING
SHAREHOLDER" and collectively, the "SELLING SHAREHOLDERS") severally propose to
sell to the several Underwriters named in Schedule II hereto (the
"UNDERWRITERS") an aggregate of __________ shares of the Company's common stock,
par value $.01 per share (the "FIRM SHARES"), each Selling Shareholder selling
the amount set forth opposite such Selling Shareholder's name under "Number of
Firm Shares to be Sold" in Schedule I hereto. The Selling Shareholders also
propose to sell to the several Underwriters not more than an additional
__________ shares of common stock, par value $.01 per share, of the Company (the
"ADDITIONAL SHARES"), each Selling Shareholder selling up to the amount set
forth opposite such Selling Shareholder's name under "Number of Additional
Shares to Be Sold" in Schedule I hereto, if and to the extent that you, as
Managers of the offering, shall have determined to exercise, on behalf of the
Underwriters, the right to purchase such shares of common stock granted to the
Underwriters in Section 2 hereof. The Firm Shares and the Additional Shares are
hereinafter collectively referred to as the "SHARES." The outstanding shares of
common stock, par value $.01 per share, of the Company (including the Shares)
are hereinafter referred to as the "COMMON STOCK."
The Company has filed with the Securities and Exchange Commission
(the "COMMISSION") a registration statement on Form S-1 (File No. 333-115441),
including a prospectus, relating to the Shares. The registration statement as
amended at the time it becomes effective, including the information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION STATEMENT";
the prospectus in the form first used to confirm sales of Shares is hereinafter
referred to as the "PROSPECTUS."
The term "PRELIMINARY PROSPECTUS" as used in this Agreement shall
mean each preliminary prospectus included in the Registration Statement prior to
the time it becomes effective. If the Company has filed an abbreviated
registration statement to register additional shares of Common Stock pursuant to
Rule 462(b) under the Securities Act (the "RULE 462
REGISTRATION STATEMENT"), then any reference herein to the term "Registration
Statement" shall be deemed to include such Rule 462 Registration Statement.
1. Representations and Warranties. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or, to the
Company's knowledge, threatened by the Commission.
(b) (i) The Registration Statement, when it became effective, did
not contain and, as amended or supplemented, if applicable, 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, (ii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (iii) the
Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in this paragraph
do not apply to statements in or omissions from the Registration Statement
or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(c) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the State of Delaware,
has the corporate power and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material adverse
effect on the Company and the Subsidiary (as defined below), taken as a
whole (a "MATERIAL ADVERSE EFFECT").
(d) The Company's only subsidiary is Eyetech Pharmaceuticals
(Ireland) Limited, a company incorporated under the laws of the Republic
of Ireland (the "SUBSIDIARY"). The Subsidiary is not a "significant
subsidiary" as defined in Rule 1-02(w) of Regulation S-X. The Subsidiary
has no assets or liabilities and has conducted no business since the date
of its formation. The Subsidiary has been duly incorporated and is validly
existing as a company under the laws of the jurisdiction of its
incorporation. All of the issued shares of capital stock of the Subsidiary
have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly by the Company, free and clear of
all liens, encumbrances, equities or claims; there are no outstanding
securities convertible into or exchangeable for, or warrants rights or
options to purchase from the Company or the Subsidiary, or obligations of
the
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Company or the Subsidiary to issue, any shares of capital stock or
membership interests in the Subsidiary.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding on the date hereof
(including the Shares to be sold by the Selling Shareholders) have been
duly authorized and are validly issued, fully paid and non-assessable and
were not issued in violation or breach of any preemptive or similar
rights. There are no outstanding securities convertible into or
exchangeable for, or warrants, rights or options to purchase from the
Company, or obligations of the Company to issue, any shares of its Common
Stock or any other class of shares of capital stock of the Company, except
as described in the Prospectus.
(h) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement will
not contravene any provision of (i) applicable law, (ii) the certificate
of incorporation or by-laws of the Company, (iii) any agreement or other
instrument binding upon the Company that is material to the Company, or
(iv) any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company, except, with respect to
clauses (i), (iii) and (iv), for any contraventions which would not,
singly or in the aggregate, result in a Material Adverse Effect. No
consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the Company
of its obligations under this Agreement, except (i) such as have been
obtained or made under the Securities Act, (ii) such as may be required by
the securities or Blue Sky laws of the various states in connection with
the offer and sale of the Shares or (iii) such as may be required by the
National Association of Securities Dealers, Inc. in connection with the
purchase and distribution of the Shares.
(i) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and the Subsidiary, taken as a whole, from that
set forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement).
(j) There are no legal or governmental proceedings pending or, to
the Company's knowledge, threatened to which the Company or the Subsidiary
is a party or to which any of the properties of the Company or the
Subsidiary is subject that are required to be described in the
Registration Statement or the Prospectus pursuant to the Securities Act or
the rules and regulations promulgated thereunder and are not so described
or any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the
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Registration Statement, in each case pursuant to the Securities Act or the
rules and regulations promulgated thereunder, that are not described or
filed as required.
(k) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or
filed pursuant to Rule 424 under the Securities Act, complied when so
filed in all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder.
(l) The Company is not required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(m) The Company (i) is in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
LAWS"), (ii) has received all permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its business
and (iii) is in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such
permits, licenses or approvals would not, singly or in the aggregate, have
a Material Adverse Effect.
(n) There are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities
to third parties) which would, singly or in the aggregate, have a Material
Adverse Effect.
(o) Except as described in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company or to require the Company to include such securities with the
Shares registered pursuant to the Registration Statement. All persons who
possess such rights with respect to the offering of the Shares have
effectively waived them.
(p) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) the Company
and the Subsidiary, taken as a whole, have not incurred any material
liability or obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business; (ii) the
Company has not purchased any of its outstanding capital stock; (iii) the
Company has not declared, paid or otherwise made any dividend or
distribution of any kind on its capital stock, except in each case as
described in the Prospectus; and (iv) there has not been any material
change in the capital stock, short-term debt or long-term debt of the
Company and the Subsidiary, taken as a whole, except in each case as
described in the Prospectus.
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(q) The Company and the Subsidiary do not own any real property.
The Company has good and marketable title to all personal property owned
by it which is material to the business of the Company and the Subsidiary,
taken as a whole, free and clear of all liens, encumbrances and defects
except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company; and any
real or personal property and buildings held under lease by the Company
are held by the Company under valid, subsisting and enforceable 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, in each case except as described in the Prospectus.
(r) The Company owns or possesses adequate licenses or other
rights to use the patent rights, inventions, copyrights, trademarks,
service marks, trade names, technology and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary rights, and
excluding generally commercially available "off the shelf" software
programs licensed pursuant to shrink wrap or "click and accept" licenses)
(collectively, "INTELLECTUAL PROPERTY") necessary to conduct the business
of the Company in the manner described in the Prospectus (collectively,
the "COMPANY INTELLECTUAL PROPERTY") and the absence of which,
individually or in the aggregate, would not have a Material Adverse
Effect. Except as disclosed in the Prospectus, neither the Company nor the
Subsidiary is obligated to pay a royalty, grant a license, or provide
other consideration to any third party in connection with the Company
Intellectual Property. Except as disclosed in the Prospectus or as would
not have a Material Adverse Effect, neither the Company nor the Subsidiary
has received any notice of infringement of or conflict with any
Intellectual Property rights of others. Except as disclosed in the
Prospectus or as would not have a Material Adverse Effect, the conduct of
the current and future business of the Company in the manner described in
the Prospectus does not and will not, to the knowledge of the Company,
infringe, interfere or conflict with any valid issued patent claim or
other Intellectual Property right of any third party, or any claim of a
patent application filed by any third party, which patent application has
been published in the PTO or similar foreign authority or is otherwise
known to the Company and which claim would reasonably be expected to issue
as a valid claim. Except as described in the Prospectus or as would not
have a Material Adverse Effect, no third party, including any academic or
governmental organization, possesses or could obtain rights to the Company
Intellectual Property which, if exercised, could enable such party to
develop products competitive to those of the Company.
(s) The Company has duly and properly filed or caused to be filed
with the United States Patent and Trademark Office (the "PTO") and
applicable foreign and international patent authorities all patent
applications owned by the Company (the "COMPANY PATENT APPLICATIONS"). To
the knowledge of the Company, the Company has complied with the PTO's duty
of candor and disclosure for the Company Patent Applications and has made
no material misrepresentation in the Company Patent Applications. The
Company is not aware of any information material to a determination of
patentability regarding the Company Patent Applications not called to the
attention of
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the PTO or similar foreign authority. The Company is not aware of any
information not called to the attention of the PTO or similar foreign
authority which would preclude the grant of a patent for the Company
Patent Applications. The Company has no knowledge of any information which
would preclude the Company from having clear title to the Company Patent
Applications.
(t) No material labor dispute with the employees of the Company
exists, or, to the knowledge of the Company, is imminent; and the Company
is not aware of any existing, threatened or imminent labor disturbance by
the employees of any of its principal suppliers, manufacturers or
contractors that would have a Material Adverse Effect.
(u) The Company carries, or is covered by, insurance in such
amounts and covering such risks as the Company reasonably believes are
adequate for the conduct of its business and the value of its properties
and as are customary in the business in which the Company is engaged; the
Company has not been refused any insurance coverage sought or applied for;
and the Company has no 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 from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse
Effect.
(v) Except as described in the Prospectus, the Company possesses
all certificates, authorizations and permits issued by the appropriate
federal, state or foreign regulatory authorities necessary to conduct its
business, including without limitation all such certificates,
authorizations and permits required by the United States Food and Drug
Administration (the "FDA") or any other federal, state or foreign agencies
or bodies engaged in the regulation of pharmaceuticals or biohazardous
materials, except where the failure to so possess such certificates,
authorizations and permits, singly or in the aggregate, would not result
in a Material Adverse Effect; and, except as described in the Prospectus,
the Company has not received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse Effect.
(w) The studies, tests and preclinical and clinical trials
conducted by or on behalf of the Company that are described in the
Registration Statement and the Prospectus were and, if still pending, are
being, conducted in all material respects in accordance with experimental
protocols, procedures and controls pursuant to, where applicable, accepted
professional and scientific standards; the descriptions of the results of
such studies, tests and trials contained in the Registration Statement and
the Prospectus are accurate in all material respects; and the Company has
not received any notices or correspondence from the FDA or any foreign,
state or local governmental body exercising comparable authority requiring
the termination, suspension or material modification of any studies, tests
or preclinical or clinical trials conducted by or on behalf of the Company
which termination, suspension or material modification would reasonably be
expected to have a Material Adverse Effect.
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(x) The Company and the Subsidiary maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals; and the
Company is otherwise in compliance in all materials respects with all
applicable effective provisions of the Xxxxxxxx-Xxxxx Act of 2002 and the
rules and regulations issued thereunder by the Commission.
(y) Ernst & Young LLP is, and during the periods covered in their
report included in the Registration Statement and the Prospectus was, the
independent accountants with respect to the Company and the Subsidiary as
required by the Securities Act.
(z) The consolidated financial statements of the Company and its
subsidiaries (in each case, together with the related notes thereto)
included in the Registration Statement and the Prospectus present fairly
the consolidated financial position and results of the operations of the
respective companies as of the respective dates indicated and for the
respective periods specified; and such consolidated financial statements
(together with the related notes thereto) have been prepared in conformity
with generally accepted accounting principles, consistently applied
throughout the periods involved except as otherwise stated therein. The
selected financial information included in the Registration Statement and
the Prospectus presents fairly, on the basis stated in the Registration
Statement and the Prospectus, the information shown therein and has been
compiled on a basis consistent with that of the audited consolidated
financial information included in the Registration Statement and the
Prospectus.
(aa) Each material contract, agreement and license to which the
Company is bound is legal, valid, binding, enforceable, and in full force
and effect against the Company, and to the knowledge of the Company, each
other party thereto, except to the extent such enforceability is subject
to (i) laws of general application relating to bankruptcy, insolvency,
moratorium and the relief of debtors and (ii) the availability of specific
performance, injunctive relief and other equitable remedies. The Company
is not, and to the Company's knowledge, no other party is in material
breach or default with respect to any such contract, agreement and
license, and, to the Company's knowledge, no event has occurred which with
notice or lapse of time would constitute a material breach or default, or
permit termination, modification, or acceleration, under any such
contract, agreement or license. No party has repudiated any material
provision of any such contract, agreement or license.
(bb) The Shares are listed for quotation on the Nasdaq National
Market.
(cc) Each of the executive officers and directors of the Company
(other than those who have signed below as Selling Shareholders) have
executed "lock-up"
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agreements in substantially the form of Exhibit A hereto, except as
described in the Prospectus.
2. Representations and Warranties of the Selling Shareholders.
Each Selling Shareholder, severally and not jointly, represents and warrants to
and agrees with each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder.
(b) The execution and delivery by such Selling Shareholder of, and
the performance by such Selling Shareholder of its obligations under, this
Agreement, the Custody Agreement signed by such Selling Shareholder and
____________, as Custodian, relating to the deposit of the Shares to be
sold by such Selling Shareholder (the "CUSTODY AGREEMENT") and the Power
of Attorney appointing certain individuals as such Selling Shareholder's
attorneys-in-fact to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement (the
"POWER OF ATTORNEY") will not contravene any provision of applicable law,
or the certificate of incorporation or by-laws of such Selling Shareholder
(if such Selling Shareholder is a corporation), or any agreement or other
instrument binding upon such Selling Shareholder or any judgment, order or
decree of any governmental body, agency or court having jurisdiction over
such Selling Shareholder, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for
the performance by such Selling Shareholder of its obligations under this
Agreement or the Custody Agreement or Power of Attorney of such Selling
Shareholder, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the
Shares.
(c) Such Selling Shareholder has, and on the Closing Date will
have, valid title to, or a valid "security entitlement" within the meaning
of Section 8-501 of the New York Uniform Commercial Code in respect of,
the Shares to be sold by such Selling Shareholder free and clear of all
security interests, claims, liens, equities or other encumbrances and the
legal right and power, and all authorization and approval required by law,
to enter into this Agreement, the Custody Agreement and the Power of
Attorney and to sell, transfer and deliver the Shares to be sold by such
Selling Shareholder or a security entitlement in respect of such Shares.
(d) The Custody Agreement and the Power of Attorney have been duly
authorized, executed and delivered by such Selling Shareholder and are
valid and binding agreements of such Selling Shareholder except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles.
(e) Delivery of the Shares to be sold by such Selling Shareholder
and payment therefor pursuant to this Agreement will pass valid title to
such Shares, free and clear of any adverse claim within the meaning of
Section 8-102 of the New York Uniform
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Commercial Code, to each Underwriter who has purchased such Shares without
notice of an adverse claim.
(f) If the Selling Shareholder is an officer or director of the
Company, (i) the Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, 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, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder and (iii) the Prospectus does not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph 2(f) do not
apply to statements or omissions in the Registration Statement or the
Prospectus based upon information relating to any Underwriter furnished to
the Company in writing by such Underwriter through you expressly for use
therein.
(g) For each Selling Shareholder other than those making a
representation and warranty pursuant to paragraph 2(f) above, (i) the
Registration Statement, when it became effective, did not contain and, as
amended or supplemented, if applicable, 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, and (ii) the Prospectus does not contain and, as amended or
supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided that the representations and
warranties set forth in this paragraph 2(g) are limited to statements or
omissions made in reliance upon information relating to such Selling
Shareholder furnished to the Company in writing by such Selling
Shareholder expressly for use in the Registration Statement, the
Prospectus or any amendments or supplements thereto.
3. Agreements to Sell and Purchase. Each Selling Shareholder,
severally and not jointly, hereby agrees to sell to the several Underwriters,
and each Underwriter, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agrees,
severally and not jointly, to purchase from such Selling Shareholder at $_____ a
share (the "PURCHASE PRICE") the number of Firm Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the number of Firm Shares to be sold by such Selling
Shareholder as the number of Firm Shares set forth in Schedule II hereto
opposite the name of such Underwriter bears to the total number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Selling Shareholders
agree to sell to the Underwriters the Additional Shares, and the Underwriters
shall have the right to purchase, severally and not
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jointly, up to _______ Additional Shares at the Purchase Price. You may exercise
this right on behalf of the Underwriters in whole or from time to time in part
by giving written notice of each election to exercise the option not later than
30 days after the date of this Agreement. Any exercise notice shall specify the
number of Additional Shares to be purchased by the Underwriters and the date on
which such shares are to be purchased. Each purchase date must be at least two
business days after the written notice is given and may not be earlier than the
closing date for the Firm Shares nor later than ten business days after the date
of such notice. Additional Shares may be purchased as provided in this Section 3
and Section 5 hereof solely for the purpose of covering over-allotments made in
connection with the offering of the Firm Shares. On each day, if any, that
Additional Shares are to be purchased (an "OPTION CLOSING DATE"), each Selling
Shareholder, severally and not jointly, agrees to sell to the several
Underwriters, the number of Additional Shares that bears the same proportion to
the total number of Additional Shares set forth opposite such Selling
Shareholder's name on Schedule I as the number of Additional Shares to be sold
on such Option Closing Date bears to the total number of Additional Shares, and
each Underwriter, severally and not jointly, agrees to purchase from such
Selling Shareholder, the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as you may determine) that bears the
same proportion to the total number of Additional Shares to be sold by such
Selling Shareholder on such Option Closing Date as the number of Firm Shares set
forth in Schedule II hereto opposite the name of such Underwriter bears to the
total number of Firm Shares.
The Company hereby agrees that, without the prior written consent of
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxx Xxxxxxx & Co.
Incorporated on behalf of the Underwriters, it will not, during the period
ending 90 days after the date of the Prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock; (ii) file any registration statement with the Securities and
Exchange Commission relating to the offering of any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock;
or (iii) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (i), (ii) or (iii) above
is to be settled by delivery of Common Stock or such other securities, in cash
or otherwise. The foregoing sentence shall not apply to (A) the sale of the
Shares hereunder, (B) the issuance by the Company of shares of Common Stock upon
the exercise of an option or warrant or the conversion of a security outstanding
on the date hereof that is described in the Prospectus or of which the
Underwriters have been advised in writing, (C) the grant of any stock option or
stock purchase right pursuant to the Company's 2003 Stock Incentive Plan or 2003
Employee Stock Purchase Plan provided that such stock option or Stock Purchase
right shall not be exercisable during the period ending 90 days after the date
of the Prospectus, (D) the issuance of any shares of Common Stock in connection
with acquisition, licensing, collaboration or similar strategic arrangements,
provided that, prior to the issuance of any such shares of Common Stock, the
Company shall cause the recipients of such shares to execute and deliver to you
"lock-up" agreements, each substantially in the form of Exhibit A hereto, or (E)
the issuance by the Company of shares of Common Stock pursuant to
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Section 1.4(b) of the Series D Preferred Stock Purchase Agreement, dated as of
December 17, 2002, by and between the Company, Pfizer Ireland Pharmaceuticals
and Pfizer Inc., provided that, prior to the issuance of any such shares of
Common Stock, the Company shall cause the recipients of such shares to execute
and deliver to you "lock-up" agreements, each substantially in the form of
Exhibit A hereto.
Each Selling Shareholder hereby agrees that, without the prior
written consent of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxx
Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not, during
the period commencing on the date hereof and ending 90 days after the date of
the Prospectus (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the sale of the Shares hereunder, (B)
transactions relating to shares of Common Stock or other securities acquired in
open market transactions after the completion of the Public Offering, (C)
transfers of shares of Common Stock or any security convertible into Common
Stock as a bona fide gift or gifts, (D) transfers of shares of Common Stock or
any security convertible into Common Stock to any trust for the direct or
indirect benefit of such Selling Shareholder or a member of the "immediate
family" (i.e. any relationship by blood, marriage or adoption, not more remote
than first cousin) or affiliate of such Selling Shareholder not involving a
disposition for value, and (E) distributions of shares of Common Stock or any
security convertible into Common Stock to limited partners or stockholders of
such Selling Shareholder; provided that in the case of any transfer or
distribution pursuant to clause (C), (D) or (E), (1) each donee, transferee,
trustee or distributee shall execute and deliver to Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated and Xxxxxx Xxxxxxx & Co. Incorporated a duplicate
form of the "lock-up" agreement set forth in Exhibit A hereto and (2) such
transfer or distribution is not required to be reported in any public report or
filing with the Securities and Exchange Commission, and no such filing or report
shall be made voluntarily by such Selling Shareholder or any other party to such
transfer or distribution (donor, donee, trustee, beneficiary, transferor or
transferee) in connection with such transfer or distribution, other than a
filing on a Form 5 made after the expiration of the 90-day period referred to
above.
In addition, each Selling Shareholder agrees that, without the prior
written consent of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxx
Xxxxxxx & Co. Incorporated on behalf of the Underwriters, it will not, during
the period commencing on the date hereof and ending 90 days after the date of
the Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock. Each Selling Shareholder also
agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of such Selling
Shareholder's share of Common Stock except in compliance with the foregoing
restrictions.
-11-
The Company and each Selling Shareholder further agree that,
notwithstanding the foregoing, if (1) during the last 17 days of the 90-day
restricted period described in the two preceding paragraphs, the Company issues
a earnings release or material news or a material event relating to the Company
occurs, or (2) prior to the expiration of such 90-day restricted period, the
Company announces that it will release earnings results during the 16-day period
beginning on the last day of the 90-day period, then the restrictions set forth
in the two preceding paragraphs shall continue to apply until the expiration of
the 18-day period beginning on the issuance of the earnings release or the
occurrence of the material news or material event.
4. Terms of Public Offering. The Company and the Selling
Shareholders are advised by you that the Underwriters propose to make a public
offering of their respective portions of the Shares as soon after the
Registration Statement and this Agreement have become effective as in your
judgment is advisable. The Company and the Selling Shareholders are further
advised by you that the Shares are to be offered to the public initially at
$_____ a share (the "PUBLIC OFFERING PRICE") and to certain dealers selected by
you at a price that represents a concession not in excess of $____ a share under
the Public Offering Price.
5. Payment and Delivery. Payment for the Firm Shares to be sold
by each Selling Shareholder shall be made to such Selling Shareholder in Federal
or other funds immediately available in New York City against delivery of such
Firm Shares for the respective accounts of the several Underwriters at 10:00
a.m., New York City time, on __________, 2004, or at such other time on the same
or such other date, not later than ___________, 2004, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to as
the "CLOSING DATE." The Closing of the offering and sale of the Firm Shares will
be held at the offices of Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Payment for any Additional Shares to be sold by each Selling
Shareholder shall be made to such Selling Shareholder in Federal or other funds
immediately available in New York City against delivery of such Additional
Shares for the respective accounts of the several Underwriters at 10:00 a.m.,
New York City time, on the date specified in the corresponding notice described
in Section 3 or at such other time on the same or on such other date, in any
event not later than ________, 2004 as shall be designated in writing by you.
The time and date of such payment are hereinafter referred to as the "OPTION
CLOSING DATE." The Closing of the offering and sale of the Additional Shares
will be held at the offices of Xxxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
Firm Shares and Additional Shares shall be registered in such names
and in such denominations as you shall request in writing not later than one
full business day prior to the Closing Date or the applicable Option Closing
Date, as the case may be. The Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or the applicable Option Closing Date, as
the case may be, for the respective accounts of the several Underwriters, with
any transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.
-12-
6. Conditions to the Underwriters' Obligations. The obligations
of the Selling Shareholders to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares on
the Closing Date are subject to the condition that the Registration Statement
shall have become effective not later than 3:00 p.m. (New York City time) on the
date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall
any notice have been given of any intended or potential downgrading
or of any review for a possible change that does not indicate the
direction of the possible change, in the rating accorded any of the
Company's securities by any "nationally recognized statistical
rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or operations
of the Company and the Subsidiary, taken as a whole, from that set
forth in the Prospectus (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate of the Company, dated the Closing Date and signed by an
executive officer on behalf of the Company, to the effect set forth in
Section 6(a)(i) above and to the effect that the representations and
warranties of the Company contained in this Agreement are true and correct
as of the Closing Date and that the Company has complied in all material
respects with all of the agreements and satisfied all of the conditions on
its part to be performed or satisfied hereunder on or before the Closing
Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Xxxxxxxx & Xxxxxxxx LLP, outside counsel for the Company, dated
the Closing Date, to the effect that:
(i) the Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, and has all the requisite corporate power and authority to
own its property and to conduct its
-13-
business as such businesses and properties are described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction listed on an exhibit to such opinion;
(ii) the authorized capital stock of the Company conforms in
all material respects as to legal matters to the description thereof
contained in the Prospectus under the caption "Description of
Capital Stock";
(iii) the shares of Common Stock outstanding on the date
hereof have been duly authorized and are validly issued, fully paid
and non-assessable and were not issued in violation or breach of any
preemptive or similar rights;
(iv) to such counsel's knowledge, except as described in the
Prospectus, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares
registered pursuant to the Registration Statement, and all such
rights with respect to the offering of the Shares have been
satisfied or effectively waived by persons who possess such rights.
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the execution, delivery and performance of this Agreement
by the Company and the consummation by the Company on the Closing
Date of the transaction herein contemplated do not and will not (A)
conflict with or constitute a breach of any of the terms or
provisions of, or constitute a default under, the certificate of
incorporation or bylaws of the Company, or any indenture, loan
agreement, mortgage, deed of trust or other agreement or instrument
to which the Company is a party or by which the Company may be bound
and which is filed as an exhibit to the Registration Statement; (B)
violate any United States federal or New York state statute, rule or
regulation applicable to the Company; or (C) contravene any
judgment, order or decree specifically naming the Company of any
governmental body, agency or court having jurisdiction over the
Company of which such counsel is aware;
(vii) The execution, delivery and performance of this
Agreement by the Company, and the consummation by the Company on the
Closing Date of the transactions herein contemplated will not
require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency, except
such as have been obtained under the Securities Act and the Exchange
Act and except such as may be required by the securities or Blue Sky
laws of the various states or foreign jurisdictions or by the
National Association of Securities Dealers, Inc., as to which such
counsel need express no opinion;
-14-
(viii) the statements included in (A) the Prospectus under the
captions "Risk Factors -- The success of Macugen depends heavily on
our collaboration with Pfizer, which was established only recently
and involves a complex sharing of control over decisions,
responsibilities and costs and benefits. Any loss of Pfizer as a
collaborator, or adverse development in the collaboration, would
materially harm our business," "Risk Factors --If our clinical
trials are unsuccessful, or if we experience significant delays in
these trials, our ability to commercialize Macugen and our future
product candidates will be impaired," "Risk Factors -- The
manufacture and packaging of pharmaceutical products such as Macugen
are subject to the requirements of the FDA and similar foreign
regulatory bodies. If we or our third party manufacturers fail to
satisfy these requirements, our product development and
commercialization efforts may be materially harmed," "Risk Factors
-- Macugen and our other potential products may not be commercially
viable if we fail to obtain an adequate level of reimbursement for
these products by Medicare and other third party payors. The markets
for our products may also be limited by the indications for which
their use may be reimbursed or the frequency in which they may be
administered," "Risk Factors -- We may not be able to obtain
marketing approval for any of the products resulting from our
development efforts, including Macugen. Failure to obtain these
approvals could materially harm our business," "Risk Factors -- The
'fast track' designation for development of Macugen may not actually
lead to a faster development or regulatory review or approval
process," "Risk Factors -- Our products could be subject to
restrictions or withdrawal from the market and we may be subject to
penalties if we fail to comply with regulatory requirements, or if
we experience unanticipated problems with our products, when and if
any of them are approved," "Risk Factors -- If we are unable to
obtain and maintain protection for the intellectual property
incorporated into our products, the value of our technology and
products will be adversely affected," "Risk Factors -- If we fail to
comply with our obligations in the agreements under which we license
development or commercialization rights to products or technology
from third parties, we could lose license rights that are important
to our business," "Risk Factors --Third parties may own or control
patents or patent applications and require us to seek licenses,
which could increase our development and commercialization costs, or
prevent us from developing or marketing our products or services,"
"Risk Factors -- Third parties may own or control patent
applications that would be infringed by our technologies, drug
targets or potential products. This could cause us to become
involved in expensive patent litigation or other proceedings, which
could result in our incurring substantial costs and expenses and
liability for damages and could require us to stop some of our
development and commercialization efforts," "Business --
Collaboration with Pfizer," "Business -- Manufacturing," "Business
-- License Agreements," "Business -- Patents and Proprietary
Rights," "Business -- Government Regulation -- United States
Governmental Regulation," "Business -- Third Party Reimbursement and
Pricing Controls," "Business -- Trademarks," "Description of Capital
Stock" and "Underwriters"
-15-
and (B) the Registration Statement in Items 14 and 15, insofar as
such statements constitute matters of law or legal conclusions, or
summarize the terms of agreements or other documents, are correct in
all material respects;
(ix) to such counsel's knowledge, there are no agreements,
contracts, leases or other documents to which the Company is a party
or by which the Company may be bound that are required by the
Securities Act and the rules and regulations thereunder to be filed
as exhibits to the Registration Statement that are not so filed;
(x) such counsel does not know of any legal or governmental
proceedings pending or threatened against the Company that are
required by the Securities Act or the rules and regulations
thereunder to be described in the Registration Statement or in the
Prospectus that are not so described;
(xi) the Company is not required to register as an "investment
company" as such term is defined in the Investment Company Act of
1940, as amended; and
(xii) such counsel (A) is of the opinion that the Registration
Statement and the Prospectus (except for the financial statements
and other financial and accounting data and statistical data derived
from the financial statements included therein as to which such
counsel need not express any belief) comply as to form in all
material respects with the requirements of the Securities Act and
the applicable rules and regulations of the Commission thereunder,
(B) has no reason to believe that the Registration Statement and the
Prospectus included therein at the time the Registration Statement
became effective (except for the financial statements included
therein and other financial and accounting data and statistical data
derived from the financial statements included therein, as to which
such counsel need not express any belief) contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading and (C) has no reason to believe that the
Prospectus (except for the financial statements and other financial
and accounting data and statistical data derived from the financial
statements included therein, as to which such counsel need not
express any belief) as of its date or as of the Closing Date
contained or contains any untrue statement of a material fact or
omitted or omits 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.
(d) The Underwriters shall have received on the Closing Date an
intellectual property opinion from Xxxxxxxx & Xxxxxxxx LLP, counsel to the
Company, dated the Closing Date, to the effect that:
(i) to such counsel's knowledge, the Company owns, possesses
or has adequate rights to use the Company Intellectual Property
reasonably necessary
-16-
to conduct the business of the Company in the manner described in
the Prospectus, except to the extent that the failure to own,
possess or have adequate rights to use such Company Intellectual
Property would not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect;
(ii) other than as set forth or contemplated in the
Prospectus, to such counsel's knowledge, the Company has not
received any notice of infringement of or conflict with, and such
counsel has no knowledge of any infringement of or conflict with,
asserted rights of others with respect to the Company Intellectual
Property, except as would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect;
(iii) other than as set forth or contemplated in the
Prospectus or as would not reasonably be expected to result in a
Material Adverse Effect, to such counsel's knowledge, the conduct of
the current and future business of the Company in the manner
described in the Prospectus does not and will not infringe,
interfere or conflict with any valid issued patent claim or other
Intellectual Property right of any third party, or any claim of a
patent application filed by any third party, which patent
application has been published in the PTO or similar foreign
authority or is otherwise known to the Company and which claim would
reasonably be expected to issue as a valid claim;
(iv) other than as set forth or contemplated in the
Prospectus, to such counsel's knowledge, no third party, including
any academic or governmental organization, possesses or could obtain
rights to the patents, patent applications or patent rights of the
Company which, if exercised, would allow such third party to develop
products competitive with those of the Company and would,
individually or in the aggregate, reasonably be expected to result
in a Material Adverse Effect;
(v) to the knowledge of such counsel, all information material
to patentability has been timely disclosed to the PTO during the
prosecution of the Company Patent Applications and no
misrepresentation has been made to, or material information withheld
from, the PTO during such prosecution; and
(vi) such counsel has no reason to believe that any of the
Company's trademark applications filed with the PTO will not
eventuate in registered trademarks.
(e) The Underwriters shall have received on the Closing Date an
opinion of the respective counsel for each of the Selling Shareholders,
dated the Closing Date, to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by or on behalf of such Selling Shareholder;
-17-
(ii) the execution and delivery by such Selling Shareholder
of, and the performance by such Selling Shareholder of its
obligations under, this Agreement and the Custody Agreement and
Power of Attorney of such Selling Shareholder will not contravene
any provision of applicable law, or the certificate of incorporation
or by-laws of such Selling Shareholder (if such Selling Shareholder
is a corporation), or, to the best of such counsel's knowledge, any
agreement or other instrument binding upon such Selling Shareholder
or, to the best of such counsel's knowledge, any judgment, order or
decree of any governmental body, agency or court having jurisdiction
over such Selling Shareholder, and no consent, approval,
authorization or order of, or qualification with, any governmental
body or agency is required for the performance by such Selling
Shareholder of its obligations under this Agreement or the Custody
Agreement or Power of Attorney of such Selling Shareholder, except
such as may be required by the securities or Blue Sky laws of the
various states in connection with offer and sale of the Shares;
(iii) such Selling Shareholder is the record owner and, to
such counsel's knowledge, the beneficial owner of the Shares to be
sold by such Selling Shareholder and has the legal right and power,
and all authorization and approval required by law, to enter into
this Agreement and the Custody Agreement and Power of Attorney of
such Selling Shareholder and to sell, transfer and deliver the
Shares to be sold by such Selling Shareholder or a security
entitlement in respect of such Shares;
(iv) the Custody Agreement and the Power of Attorney of such
Selling Shareholder have been duly authorized, executed and
delivered by such Selling Shareholder and are valid and binding
agreements of such Selling Shareholder;
(v) delivery of stock certificates representing the Shares to
be sold by such Selling Shareholder, endorsed to the Underwriters
and payment therefor pursuant to this Agreement will pass valid
title to such Shares, free and clear of any adverse claim within the
meaning of Section 8-102 of the New York Uniform Commercial Code, to
each Underwriter who has purchased such Shares without notice of an
adverse claim;
(vi) nothing has come to the attention of such counsel that
causes such counsel to believe that the information relating
specifically to such Selling Shareholder and the Shares to be sold
by such Selling Shareholder hereunder in (A) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or (B) the Prospectus as of its date or as
of the Closing Date contained or contains an untrue statement of a
material fact or omitted or omits 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.
-18-
(f) The Underwriters shall have received on the Closing Date an
opinion of Ropes & Xxxx LLP, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 6(c)(v) and
6(c)(viii) (but only as to the statements in the Prospectus under
"Description of Capital Stock" and "Underwriters") and 6(c)(xii) above.
With respect to Section 6(c)(xii) and Section 6(f) (with respect to
the matters in Section 6(c)(xiii)) above, such counsel may state that
their opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification,
except as specified.
The opinions of Xxxxxxxx & Xxxxxxxx LLP described in Section 6(c)
and Section 6(d) above and the opinion(s) described in Section 6(e) above
shall be rendered to the Underwriters at the request of the Company or one
or more of the Selling Shareholders, as the case may be, and shall so
state therein.
(g) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the Closing
Date, as the case may be, in form and substance satisfactory to the
Underwriters, from Ernst & Young LLP, independent public accountants,
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 in the
Registration Statement and the Prospectus; provided that the letter
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
(h) The "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you, on the one hand, and each of the officers
and directors of the Company (other than those who have signed below as
Selling Shareholders) except as described in the Prospectus, on the other,
relating to sales and certain other dispositions of shares of Common Stock
or certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the applicable Option Closing
Date of such documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the Additional
Shares to be sold on such Option Closing Date and other matters related to the
issuance of such Additional Shares.
7. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, four signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City as soon
as practicable following the date of this Agreement and in no event later
than 9:00 p.m. New York City time on the business day next succeeding
-19-
the date of this Agreement and during the period mentioned in Section 7(c)
below, as many copies of the Prospectus and any supplements and amendments
thereto or to the Registration Statement as you may reasonably request.
The costs of furnishing such copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement shall be borne by
the Company with respect to any such documents furnished during the
nine-month period after the date of this Agreement and by the Underwriters
thereafter.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment
or supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is necessary to amend or supplement the Prospectus in
order to make the statements therein, in the light of the circumstances
when the Prospectus is delivered to a purchaser, not misleading, or if, in
the opinion of counsel for the Underwriters, it is necessary to amend or
supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company) to
which Shares may have been sold by you on behalf of the Underwriters and
to any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law. The costs of
complying with this Section 7(c) shall be borne by the Company with
respect to any amendment or supplement required during the nine-month
period after the date of this Agreement and by the Underwriters
thereafter.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as you shall reasonably
request, except where such qualification would subject the Company to
general service of process in suits, other than those arising out of the
offering or sale of the Shares, in any jurisdiction where it is not
presently qualified or where it would be subject to material taxation as a
foreign corporation in any jurisdiction where it is not now so subject.
(e) To make generally available to the Company's security holders
and to you as soon as practicable an earning statement covering the
twelve-month period ending June 30, 2005 that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) Except as otherwise provided herein, whether or not the
transactions contemplated in this Agreement are consummated or this
Agreement is terminated, to pay
-20-
or cause to be paid all expenses incident to the performance of the
Company's obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel, the Company's
accountants in connection with the registration and delivery of the Shares
under the Securities Act and all other fees or expenses in connection with
the preparation and filing of the Registration Statement, any preliminary
prospectus, the Prospectus and amendments and supplements to any of the
foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the Underwriters and dealers,
in the quantities hereinabove specified, (ii) all costs and expenses
related to the transfer and delivery of the Shares to the Underwriters,
including any transfer or other taxes payable thereon, (iii) the cost of
producing any Blue Sky or Legal Investment memorandum in connection with
the offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer and
sale under state securities laws as provided in Section 6(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel
for the Underwriters in connection with such qualification and in
connection with the Blue Sky memorandum, (iv) all expenses in connection
with any offer and sale of the Shares outside of the United States,
including filing fees and the reasonable fees and disbursements of counsel
for the Underwriters in connection with offers and sales outside of the
United States, (v) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriters incurred in connection with
the review and qualification of the offering of the Shares by the National
Association of Securities Dealers, Inc., all costs and expenses incident
to listing the Shares on the NASDAQ National Market, (vi) the cost of
printing certificates representing the Shares, (vii) the costs and charges
of any transfer agent, registrar or depositary, (viii) the costs and
expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the offering of the
Shares, including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations with
the prior approval of the Company, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and
the cost of any aircraft chartered in connection with the road show, and
(ix) all other costs and expenses incident to the performance of the
obligations of the Company hereunder for which provision is not otherwise
made in this Section. It is understood, however, that except as provided
in this Section, Section 8 entitled "Indemnity and Contribution," and the
last paragraph of Section 10 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel;
stock transfer taxes payable on resale of any of the Shares by them; and
any advertising expenses connected with any offers they may make.
(g) To enforce the Company's rights under the agreements referred
to in Section 1(cc) above (i) to restrict the transfer of securities
during the 90-day period following the Closing Date and (ii) to obtain
executed copies of "lock-up" agreements in the form of Exhibit A hereto
from each option holder who exercises an option during the 90-day period
following the Closing Date.
-21-
8. Indemnity and Contribution.
(a) The Company and each Selling Shareholder who is a director or
officer of the Company (as designated with an asterisk "*" on Schedule I)
on the date of this Agreement, jointly and severally, agree to indemnify
and hold harmless each Underwriter, each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act
or Section 20 of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), and each affiliate of any Underwriter within the meaning
of Rule 405 under the Securities Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal
or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission
based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use
therein; provided, however, that the foregoing indemnity agreement with
respect to any preliminary prospectus shall not inure to the benefit of
any Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Shares, any person controlling such
Underwriter, or any affiliate of such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 7(a) hereof.
(b) Each Selling Shareholder who is not an officer or director of
the Company severally agrees to indemnify and hold harmless each
Underwriter, each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, and each affiliate of any Underwriter within the meaning of
Rule 405 under the Securities Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal
or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement or any amendment thereof, any preliminary prospectus or the
Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
only with reference to information relating to such Selling Shareholder
furnished in writing by or on behalf of such Selling Shareholder
-22-
expressly for use in the Registration Statement, any preliminary
prospectus, the Prospectus or any amendments or supplements thereto;
provided, however, that the foregoing indemnity agreement with respect to
any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims,
damages or liabilities purchased Shares, any person controlling such
Underwriter, or any affiliate of such Underwriter, if a copy of the
Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to
have been delivered, at or prior to the written confirmation of the sale
of the Shares to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses,
claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 7(a) hereof.
(c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, the Selling Shareholders, the
directors of the Company, the officers of the Company who sign the
Registration Statement and each person, if any, who controls the Company
or any Selling Shareholder within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Underwriter, but only with
reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in
the Registration Statement, any preliminary prospectus, the Prospectus or
any amendments or supplements thereto.
(d) The aggregate liability of each Selling Shareholder under the
indemnity agreement contained in this Section 8 shall be limited in amount
to the aggregate Public Offering Price of the Shares sold by such Selling
Shareholder under this Agreement.
(e) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to Section 8(a), 8(b) of 8(c), such
person (the "INDEMNIFIED PARTY") shall promptly notify the person against
whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of
such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii)
the named parties to any such proceeding (including any impleaded parties)
include both the indemnifying party and the indemnified party and
representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for (x) the fees
and expenses of more than one separate firm (in addition to any local
counsel) for all
-23-
Underwriters and all persons, if any, who control any Underwriter within
the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, (y) the fees and expenses of more than one separate firm
(in addition to any local counsel) for the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls the Company within the meaning of either such Section, or (z) the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Selling Shareholders and all persons, if any, who control
any Selling Shareholder within the meaning of either such Section and that
all such fees and expenses shall be reimbursed as they are incurred. In
the case of any separate firm for the Underwriters and such control
persons of any Underwriters, such firm shall be designated in writing
jointly by Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxx
Xxxxxxx & Co. Incorporated. In the case of any such separate firm for the
Company and such directors, officers and control persons of the Company,
such firm shall be designated in writing by the Company. In the case of
any such separate firm for the Selling Shareholders, such firm shall be
designated in writing by the persons named as attorneys-in-fact for the
Selling Shareholders under the Powers of Attorney. The indemnifying party
shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there be a
final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by the second and third sentences of
this paragraph, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by
such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement (other
than reimbursement for fees and expenses that the indemnifying party is
contesting in good faith). No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceeding.
(f) To the extent the indemnification provided for in Section
8(a), 8(b) or 8(c) is unavailable to an indemnified party or insufficient
in respect of any losses, claims, damages or liabilities referred to
therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the
amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Selling
Shareholders and the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation
provided by clause 8(f)(i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative
benefits referred to in clause 8(f)(i) above but
-24-
also the relative fault of the Selling Shareholders and the Company on the
one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Selling Shareholders and the Company on
the one hand and the Underwriters on the other hand in connection with the
offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by each Selling Shareholder and the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover of the Prospectus, bear
to the aggregate Public Offering Price of the Shares. The relative fault
of the Selling Shareholders and the Company on the one hand and the
Underwriters on the other hand 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 Selling Shareholders and the Company or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Underwriters' respective obligations to contribute pursuant
to this Section 8 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint. The liability of each
Selling Shareholder who is not an officer or director of the Company under
the contribution agreement contained in this paragraph shall be limited to
an amount equal to the Public Offering Price of the Shares sold by such
Selling Shareholder under this Agreement.
(g) The Company, the Selling Shareholders and the Underwriters
agree that it would not be just or equitable if contribution pursuant to
this Section 8 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 that does not take account of the equitable
considerations referred to in Section 8(f). The amount paid or payable by
an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, 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 Section 8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that
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 misrepresentation.
The remedies provided for in this Section 8 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
(h) The indemnity and contribution provisions contained in this
Section 8 and the representations, warranties and other statements of the
Company and the Selling Shareholders contained in this Agreement shall
remain operative and in full force and
-25-
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Underwriter, any person
controlling any Underwriter or any affiliate of any Underwriter, any
Selling Shareholder or any person controlling any Selling Shareholder or
the Company, its officers or directors of any person controlling the
Company and (iii) acceptance of and payment for any of the Shares.
9. Termination. The Underwriters may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the NASDAQ National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall have
been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Shares on the
terms and in the manner contemplated in the Prospectus.
10. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the applicable Option Closing Date, as
the case may be, any one or more of the Underwriters shall fail or refuse to
purchase Shares that it has or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase is not more than one-tenth
of the aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule II bears to
the aggregate number of Firm Shares set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 10 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Firm Shares are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on the applicable Option Closing Date, any
Underwriter or Underwriters shall fail or
-26-
refuse to purchase Additional Shares and the aggregate number of Additional
Shares with respect to which such default occurs is more than one-tenth of the
aggregate number of Additional Shares to be purchased on such Option Closing
Date, the non-defaulting Underwriters shall have the option to (i) terminate
their obligation hereunder to purchase the Additional Shares to be sold on such
Option Closing Date or (ii) purchase not less than the number of Additional
Shares that such non-defaulting Underwriters would have been obligated to
purchase in the absence of such default. Any action taken under this paragraph
shall not relieve any defaulting Underwriter from liability in respect of any
default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
11. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
12. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
-27-
13. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Very truly yours,
EYETECH PHARMACEUTICALS, INC.
By:____________________________
Name:
Title:
The SELLING SHAREHOLDERS named in Schedule I
hereto, acting severally
By:____________________________
Name:
Title: Attorney-in-Fact
Accepted as of the date hereof
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
XXXXXX XXXXXXX & CO. INCORPORATED
Acting severally on behalf of themselves and the
several Underwriters named in Schedule II hereto.
BY: XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By:_________________________
Name:
Title:
BY: XXXXXX XXXXXXX & CO. INCORPORATED
By:__________________________
Name:
Title:
SCHEDULE I
NUMBER OF NUMBER OF
FIRM SHARES ADDITIONAL SHARES
SELLING SHAREHOLDER TO BE SOLD TO BE SOLD
------------------- ---------- ----------
------------ -----------
Total..............................................
------------ -----------
SCHEDULE II
NUMBER OF
FIRM SHARES
UNDERWRITER TO BE PURCHASED
----------- ---------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
---------------
Total Firm Shares......................................................
===============
Exhibit A
[FORM OF LOCK-UP LETTER]
May 13, 2004
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Dear Sirs and Mesdames:
The undersigned understands that Xxxxxx Xxxxxxx & Co. Incorporated
("XXXXXX XXXXXXX") and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
("XXXXXXX XXXXX") propose to enter into an Underwriting Agreement (the
"UNDERWRITING AGREEMENT") with Eyetech Pharmaceuticals, Inc., a Delaware
corporation (the "COMPANY"), providing for the public offering (the "PUBLIC
OFFERING") by the several Underwriters, including Xxxxxx Xxxxxxx and Xxxxxxx
Xxxxx (the "UNDERWRITERS"), of shares (the "SHARES") of the Common Stock, $.01
par value per share, of the Company (the "COMMON STOCK").
To induce the Underwriters that may participate in the Public Offering to
continue their efforts in connection with the Public Offering, the undersigned
hereby agrees that, without the prior written consent of Xxxxxx Xxxxxxx and
Xxxxxxx Xxxxx on behalf of the Underwriters, it will not, during the period
commencing on the date hereof and ending 90 days after the date of the final
prospectus relating to the Public Offering (the "PROSPECTUS"), (1) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant to
purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or (2) enter into any swap or other arrangement
that transfers to another, in whole or in part, any of the economic consequences
of ownership of the Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (a) transactions relating to shares of Common Stock or other securities
acquired in open market transactions after the completion of the Public
Offering, (b) transfers of shares of Common Stock or any security convertible
into Common Stock as a bona fide gift or gifts, (c) transfers of shares of
Common Stock or any security convertible into Common Stock to any trust for the
direct or indirect benefit of the undersigned or a member of the "immediate
family"
(i.e. any relationship by blood, marriage or adoption, not more remote that
first cousin) or affiliates of the undersigned not involving a disposition for
value, and (d) distributions of shares of Common Stock or any security
convertible into Common Stock to limited partners or stockholders of the
undersigned; provided that in the case of any transfer or distribution pursuant
to clause (b), (c) or (d), (i) each donee, transferee, trustee or distributee
shall execute and deliver to Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx a duplicate form
of this letter agreement and (ii) such transfer or distribution is not required
to be reported in any public report or filing with the Securities and Exchange
Commission, and no such filing or report shall be made voluntarily by the
undersigned or any other party to such transfer or distribution (donor, donee,
trustee, beneficiary, transferor or transferee) in connection with such transfer
or distribution, other than a filing on a Form 5 made after the expiration of
the 90-day period referred to above.
In addition, the undersigned agrees that, without the prior written
consent of Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx on behalf of the Underwriters, it
will not, during the period commencing on the date hereof and ending 90 days
after the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock. The
undersigned also agrees and consents to the entry of stop transfer instructions
with the Company's transfer agent and registrar against the transfer of the
undersigned's share of Common Stock except in compliance with the foregoing
restrictions.
Notwithstanding the foregoing, if:
(1) during the last 17 days of the 90-day restricted period the Company
issues an earnings release or material news or a material event
relating to the Company occurs; or
(2) prior to the expiration of the 90-day restricted period, the Company
announces that it will release earnings results during the 16-day
period beginning on the last day of the 90-day period,
the restrictions imposed by this letter shall continue to apply until the
expiration of the 18-day period beginning on the issuance of the earnings
release or the occurrence of the material news or material event.
The undersigned understands that the Company and the Underwriters are
relying upon this letter agreement in proceeding toward consummation of the
Public Offering. The undersigned further understands that this letter agreement
is irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Public Offering actually occurs depends on a number of
factors, including market conditions. Any Public Offering will only be made
pursuant to an Underwriting Agreement, the terms of which are subject to
negotiation between the Company and the Underwriters.
This letter agreement shall automatically terminate upon the earliest to
occur, if any, of: (a) either Xxxxxx Xxxxxxx and Xxxxxxx Xxxxx, on the one hand,
or the Company, on the other hand, advising the other in writing, prior to the
execution of the Underwriting Agreement, that it has determined not to proceed
with the Public Offering, (b) termination of the Underwriting Agreement before
the sale of any Shares to the Underwriters, or (c) November 15, 2004, in the
event that the Underwriting Agreement has not been executed by that date.
Very truly yours,
_______________________________________________________
(Signature of Stockholder)
Printed Name: ________________________________________
(Exact Name of Stockholder - should match stock records
of Company)
____________________________________________
____________________________________________
(Address)
