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EXHIBIT 1.1
6,500,000 SHARES
ARRAY BIOPHARMA INC.
COMMON STOCK
UNDERWRITING AGREEMENT
November 16, 2000
XXXXXX BROTHERS INC.
DEUTSCHE BANK SECURITIES INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
As Representatives of the several
Underwriters named in Schedule 1,
c/x Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Array BioPharma Inc., a Delaware corporation (the "Company"), proposes
to sell 6,500,000 shares (the "Firm Stock") of the Company's Common Stock, par
value $0.001 per share (the "Common Stock"). In addition, the Company proposes
to grant to the Underwriters named in Schedule 1 hereto (the "Underwriters") an
option to purchase up to an additional 975,000 shares of the Common Stock on the
terms and for the purposes set forth in Section 2 (such 975,000 additional
shares being referred to hereinafter as the "Option Stock"). The Firm Stock and
the Option Stock, if purchased, are hereinafter collectively called the "Stock."
This is to confirm the agreement concerning the purchase of the Stock from the
Company by the Underwriters.
SECTION 1. Representations, Warranties and Agreements of the Company.
The Company represents, warrants and agrees that:
(a) A registration statement on Form S-1 with respect to the Stock has
(i) been prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Securities Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the Commission
under the Securities Act and (iii) become effective under the Securities Act.
Copies of such registration statement and each of the amendments thereto have
been delivered by the Company to you. As used in this Agreement, "Effective
Time" means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any,
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was declared effective by the Commission; "Effective Date" means the date of the
Effective Time; "Preliminary Prospectus" means each prospectus included in such
registration statement, or amendments thereof, before it became effective under
the Securities Act and any prospectus filed with the Commission by the Company
with the consent of the Representatives pursuant to Rule 424(a) of the Rules and
Regulations; "Registration Statement" means such registration statement, as
amended at the Effective Time, including all information contained in the final
prospectus filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations and deemed to be a part of the registration statement as of the
Effective Time pursuant to Rule 430A of the Rules and Regulations; and
"Prospectus" means such final prospectus in the form first used to confirm sales
of Stock. 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. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus.
(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the Commission, as
the case may be, conform to the requirements of the Securities Act and the Rules
and Regulations and do not and will not, as of the applicable effective date (as
to the Registration Statement and any amendment thereto) contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading and as of the
applicable filing date (as to the Prospectus and any amendment or supplement
thereto) contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information furnished
to the Company through the Representatives by or on behalf of any Underwriter
specifically for inclusion therein.
(c) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such qualification (except
where the failure to qualify or be in good standing in such other jurisdiction
would not result in a material adverse effect on the financial condition,
results of operations, stockholders' equity, management, general affairs,
business or prospects of the Company (a "Material Adverse Effect") and has all
power and authority necessary to own or hold its properties and to conduct the
business in which it is engaged; and the Company has no subsidiaries.
(d) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description thereof contained in the Prospectus.
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(e) The shares of the Stock to be issued and sold by the Company to the
Underwriters hereunder have been duly and validly authorized and, when issued
and delivered against payment therefor in accordance with this Agreement, will
be duly and validly issued, fully paid and non-assessable; and the Stock will
conform to the description thereof contained in the Prospectus.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, (i) any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument which has been filed
as an exhibit to the Registration Statement, or (ii) any other indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which the Company is bound or to which any of
the property or assets of the Company is subject (except where such conflicts,
breaches, violations or defaults would not have a Material Adverse Effect); nor
will such actions result in any violation of the provisions of the charter or
by-laws of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or any
of their properties or assets; and except for the registration of the Stock
under the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and applicable state securities
laws in connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is required for
the execution, delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated hereby.
(h) 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 owned or to be owned by such person or to require the
Company to include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Securities Act,
except pursuant to the Amended and Restated Investors Rights Agreement and all
amendments thereto, which have been filed as exhibits to the Registration
Statement.
(i) Except as described in the Prospectus, the Company has not sold or
issued any shares of Common Stock during the six-month period preceding the date
of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act other than shares issued pursuant to
employee benefit plans, qualified stock options plans or other employee
compensation plans or pursuant to outstanding options, rights or warrants.
(j) The Company has not sustained, since the date of the latest audited
financial statements included in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor
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dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since such date, there has not
been any change in the capital stock or long-term debt of the Company or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, consolidated
financial position, stockholders' equity, results of operations, business or
prospects of the Company, otherwise than as set forth or contemplated in the
Prospectus.
(k) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or included in
the Prospectus present fairly the financial condition and results of operations
of the Company, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles applied on
a consistent basis throughout the periods involved.
(l) Ernst & Young LLP, who have certified certain financial statements
of the Company, whose report appears in the Prospectus and who have delivered
the initial letter referred to in Section 9(f) hereof, are independent public
accountants as required by the Securities Act and the Rules and Regulations.
(m) The Company has good and marketable title in fee simple to all real
property and good and marketable title to all personal property owned by it, in
each case 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 materially interfere with the use made and proposed to
be made of such property by the Company; and all assets held under lease by the
Company are held by it 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 assets by the Company.
(n) The Company carries, or is covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of its business and the
value of its properties and as is customary for companies engaged in a similar
business in a similar industry.
(o) The Company owns or possesses adequate rights to use all material
patents, patent applications, trademarks, service marks, trade names, trademark
registrations, service xxxx registrations, copyrights, know-how, manufacturing
processes, formulae, trade secrets, licenses and rights in any thereof and any
other intangible property and assets (herein called the "Proprietary Rights")
necessary to conduct its business in the manner described in the Prospectus. The
Company takes security measures to provide adequate trade secret protection in
its non-patented technology. Except as disclosed in the Prospectus, the Company
has not received any notice of infringement or conflict with asserted rights of
others with respect to any Proprietary Rights which could result in any Material
Adverse Effect on the Company, and except as described in the Prospectus, no
action, suit, arbitration, or legal, administrative or other proceeding, or
investigation is pending, or, to the knowledge of the Company, is threatened,
which involves any Proprietary Rights. The Proprietary Rights of the Company
referred to in the Prospectus do not, to the best knowledge of the Company,
infringe or conflict with any right or valid and enforceable patent of any third
party, or any discovery, invention, product or process which is the subject of a
patent application filed by any third party, which could have a material
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adverse effect on the Company. The Company is not subject to any judgment,
order, writ, injunction or decree of any court or any Federal, state, local,
foreign or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or any arbitrator, nor, except as
described in the Prospectus, has it entered into or is a party to any contract
which restricts or impairs the use of any such Proprietary Rights in a manner
which would have a material adverse effect on the use of any of the Proprietary
Rights. The Company has complied, in all material respects, with its respective
contractual obligations relating to the protection of the Proprietary Rights
used pursuant to licenses. To the best knowledge of the Company, no person is
infringing on or violating the Proprietary Rights owned or used by the Company.
(p) There are no legal or governmental proceedings pending to which the
Company is a party or of which any property or assets of the Company is the
subject which, if determined adversely to the Company might have a Material
Adverse Effect; and to the best of the Company's knowledge, no such proceedings
are threatened by governmental authorities or by others.
(q) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Securities Act or by the Rules and Regulations which have not been
described in the Prospectus or filed as exhibits to the Registration Statement.
(r) No relationship, direct or indirect, exists between or among the
Company, on the one hand, and the directors, officers, stockholders, customers
or suppliers of the Company, on the other hand, which is required to be
described in the Prospectus which is not so described.
(s) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent, which might be expected to have a
Material Adverse Effect.
(t) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"); no "reportable event" (as defined in ERISA) has occurred
with respect to any "pension plan" (as defined in ERISA) for which the Company
would have any liability; the Company has not incurred and does not expect to
incur liability under (i) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal
Revenue Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for which the
Company would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing has
occurred, whether by action or by failure to act, which would cause the loss of
such qualification.
(u) The Company has filed all Federal, state and local income and
franchise tax returns required to be filed through the date hereof and has paid
all taxes due thereon, and no tax deficiency has been determined adversely to
the Company which has had (nor does the Company
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have any knowledge of any tax deficiency which, if determined adversely to the
Company might have) a Material Adverse Effect.
(v) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.
(w) The Company (i) makes and keeps accurate books and records and (ii)
maintains internal accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with management's authorization, (B)
transactions are recorded as necessary to permit preparation of its financial
statements and to maintain accountability for its assets, (C) access to its
assets is permitted only in accordance with management's authorization and (D)
the reported accountability for its assets is compared with existing assets at
reasonable intervals.
(x) The Company (i) is not in violation of its charter or by-laws, (ii)
is not in default in any material respect, and no event has occurred which, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
material indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which it is a party or by which it is bound or to which any of
its properties or assets is subject and (iii) is not in violation in any
material respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject or has failed to
obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its property
or to the conduct of its business.
(y) Neither the Company nor any director, officer, agent, employee or
other person associated with or acting on behalf of the Company has used any
corporate funds for any unlawful contribution, gift, entertainment or other
unlawful expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from
corporate funds; violated or is in violation of any provision of the Foreign
Corrupt Practices Act of 1977; or made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment.
(z) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company (or, to the
knowledge of the Company, any of its predecessors in interest) at, upon or from
any of the property now or previously owned or leased by the Company in
violation of any applicable law, ordinance, rule, regulation, order, judgment,
decree or permit or which would require remedial action under any applicable
law, ordinance, rule, regulation, order, judgment, decree or permit, except for
any violation or remedial action which would not be reasonably likely to have,
singularly or in the aggregate with all such violations and remedial actions, a
Material Adverse Effect; there has been no material spill,
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discharge, leak, emission, injection, escape, dumping or release of any kind
onto such property or into the environment at, on or under such property of any
toxic wastes, medical wastes, solid wastes, hazardous wastes or hazardous
substances caused by the Company or with respect to which the Company has
knowledge, except for any such spill, discharge, leak, emission, injection,
escape, dumping or release which would not have or would not be reasonably
likely to have, singularly or in the aggregate with all such spills, discharges,
leaks, emissions, injections, escapes, dumpings and releases, a Material Adverse
Effect; and the terms "hazardous wastes", "toxic wastes", "hazardous substances"
and "medical wastes" shall have the meanings specified in any applicable local,
state, federal and foreign laws or regulations with respect to environmental
protection.
(aa) The Company is not, and, as of any Delivery Date (as hereinafter
defined) after giving effect to the purchase of the Shares from the Company by
the Underwriters and the application of the net proceeds therefrom as described
in the Prospectus, will not be an investment company" as defined in the
Investment Company Act of 1940, as amended.
(bb) No consent, approval, authorization or order of, or qualification
with, any governmental body or agency, other than those obtained, is required in
connection with the offering of up to 300,000 shares of the Firm Stock, which
Xxxxxx Brothers Inc. has agreed to reserve for sale to the Company's employees
and persons having business relationships with the Company.
(cc) None of the Directed Shares (as defined in Section 3) distributed
in connection with the Directed Share Program (as defined in Section 3) will be
offered or sold outside of the United States.
SECTION 2. Purchase of the Stock by the Underwriters On the basis of
the representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 6,500,000 shares of
the Firm Stock to the several Underwriters and each of the Underwriters,
severally and not jointly, agrees to purchase the number of shares of the Firm
Stock set forth opposite that Underwriter's name in Schedule 1 hereto. The
respective purchase obligations of the Underwriters with respect to the Firm
Stock shall be rounded among the Underwriters to avoid fractional shares, as the
Representatives may determine.
In addition, the Company grants to the Underwriters an option to
purchase up to 975,000 shares of Option Stock. Such option is granted for the
purpose of covering over-allotments in the sale of Firm Stock and is exercisable
as provided in Section 4 hereof. Shares of Option Stock shall be purchased
severally for the account of the Underwriters in proportion to the number of
shares of Firm Stock set forth opposite the name of such Underwriters in
Schedule 1 hereto. The respective purchase obligations of each Underwriter with
respect to the Option Stock shall be adjusted by the Representatives so that no
Underwriter shall be obligated to purchase Option Stock other than in 100 share
increments.
The price of both the Firm Stock and any Option Stock shall be $6.975
per share.
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The Company shall not be obligated to deliver any of the Stock to be
delivered on any Delivery Date (as hereinafter defined), except upon payment for
all the Stock to be purchased on such Delivery Date as provided herein.
SECTION 3. Offering of Stock by the Underwriters.
Upon authorization by the Representatives of the release of the Firm
Stock, the several Underwriters propose to offer the Firm Stock for sale upon
the terms and conditions set forth in the Prospectus.
It is understood that approximately 300,000 shares of the Firm Stock
("Directed Shares") will initially be reserved by the Underwriters for offer and
sale to employees and persons having business relationships with the Company
("Directed Share Participants") upon the terms and conditions set forth in the
Prospectus and in accordance with the rules and regulations of the National
Association of Securities Dealers, Inc. Under no circumstances will Xxxxxx
Brothers Inc. or any Underwriter be liable to the Company or to any Directed
Share Participant for any action taken or omitted to be taken in good faith in
connection with such Directed Share Program. To the extent that any Directed
Shares are not affirmatively reconfirmed for purchase by any Directed Share
Participant on or immediately after the date of this Agreement, such Directed
Shares may be offered to the public as part of the public offering contemplated
hereby.
The Company agrees to pay all fees and disbursements incurred by the
Underwriters in connection with the Directed Share Program, including counsel
fees and any stamp duties or other taxes incurred by the Underwriters in
connection with the Directed Share Program.
In connection with the offer and sale of the Directed Shares, the
Company agrees, promptly upon a request in writing, to indemnify and hold
harmless Xxxxxx Brothers Inc. and the other Underwriters from and against any
loss, claim, damage, expense, liability or action which (i) arises out of, or is
based upon, any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the approval of the Company for
distribution to Directed Share Participants in connection with the Directed
Share Program or 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, (ii) arises out of the failure of any Directed Share Participant
to pay for and accept delivery of Directed Shares that the Directed Share
Participant agreed to purchase or (iii) is otherwise related to the Directed
Share Program, other than losses, claims, damages or liabilities (or expenses
relating thereto) that are finally judicially determined to have resulted
directly from the bad faith or gross negligence of Xxxxxx Brothers Inc.
SECTION 4. Delivery of and Payment for the Stock. Delivery of and
payment for the Firm Stock shall be made at the offices of Xxxxx & Xxxxxxx
L.L.P., 0000 Xxxxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, at 10:00 A.M., New
York City time, on the fourth full business day following the date of this
Agreement or at such other date or place as shall be determined by agreement
between the Representatives and the Company. This date and time are
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sometimes referred to as the "First Delivery Date." On the First Delivery Date,
the Company shall deliver or cause to be delivered certificates representing the
Firm Stock to the Representatives for the account of each Underwriter against
payment to or upon the order of the Company of the purchase price by wire
transfer in immediately available funds. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a further
condition of the obligation of each Underwriter hereunder. Upon delivery, the
Firm Stock shall be registered in such names and in such denominations as the
Representatives shall request in writing not less than two full business days
prior to the First Delivery Date. For the purpose of expediting the checking and
packaging of the certificates for the Firm Stock, the Company shall make the
certificates representing the Firm Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to the First Delivery Date.
The option granted in Section 2 will expire 30 days after the date of
this Agreement and may be exercised in whole or in part from time to time by
written notice being given to the Company by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the
option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as a "Second Delivery Date" and the First Delivery
Date and any Second Delivery Date are sometimes each referred to as a "Delivery
Date."
Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 4 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on such Second Delivery
Date. On such Second Delivery Date, the Company shall deliver or cause to be
delivered the certificates representing the Option Stock to the Representatives
for the account of each Underwriter against payment to or upon the order of the
Company of the purchase price by wire transfer in immediately available funds.
Time shall be of the essence, and delivery at the time and place specified
pursuant to this Agreement is a further condition of the obligation of each
Underwriter hereunder. Upon delivery, the Option Stock shall be registered in
such names and in such denominations as the Representatives shall request in the
aforesaid written notice. For the purpose of expediting the checking and
packaging of the certificates for the Option Stock, the Company shall make the
certificates representing the Option Stock available for inspection by the
Representatives in New York, New York, not later than 2:00 P.M., New York City
time, on the business day prior to such Second Delivery Date.
SECTION 5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Representatives
and to file such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than Commission's close of business on the second business day following
the execution and delivery
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of this Agreement or, if applicable, such earlier time as may be required by
Rule 430A(a)(3) under the Securities Act; to make no further amendment or any
supplement to the Registration Statement or to the Prospectus, except as
permitted herein; to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish the Representatives with copies
thereof; to advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for offering or
sale in any jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification, to use promptly its reasonable best
efforts to obtain its withdrawal;
(b) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement as originally
filed with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith;
(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and (ii)
each Preliminary Prospectus, the Prospectus and any amended or supplemented
Prospectus; and, if the delivery of a prospectus is required at any time after
the Effective Time in connection with the offering or sale of the Stock or any
other securities relating thereto and if at such time any events shall have
occurred as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend or
supplement the Prospectus in order to comply with the Securities Act, to notify
the Representatives and, upon their request, to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended or
supplemented Prospectus which will correct such statement or omission or effect
such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the Prospectus
that may, in the judgment of the Company or the Representatives, be required by
the Securities Act or requested by the Commission;
(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus or any Prospectus
pursuant to Rule 424 of the Rules
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and Regulations, to furnish a copy thereof to the Representatives and counsel
for the Underwriters and obtain the consent of the Representatives to the
filing;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries (which
need not be audited) complying with Section 11(a) of the Securities Act and the
Rules and Regulations (including, at the option of the Company, Rule 158);
(g) For a period of five years following the Effective Date, to furnish
to the Representatives copies of all materials furnished by the Company to its
stockholders and all public reports and all reports and financial statements
furnished by the Company to the principal national securities exchange upon
which the Common Stock may be listed pursuant to requirements of or agreements
with such exchange or to the Commission pursuant to the Exchange Act or any rule
or regulation of the Commission thereunder;
(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering and
sale under the securities laws of such jurisdictions as the Representatives may
request and to comply with such laws so as to permit the continuance of sales
and dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Stock; provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation or to file
a general consent to service of process in any jurisdiction;
(i) For a period of 180 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise dispose of
(or enter into any transaction or device which is designed to, or could be
expected to, result in the disposition by any person at any time in the future
of) any shares of Common Stock or securities convertible into or exchangeable
for Common Stock (other than the Stock and shares issued pursuant to employee
benefit plans, qualified stock option plans or other employee, consultant or
director compensation plans existing on the date hereof or pursuant to currently
outstanding options, warrants or rights), or sell or grant options, rights or
warrants with respect to any shares of Common Stock or securities convertible
into or exchangeable for Common Stock (other than the grant of options pursuant
to option plans existing on the date hereof), or (2) enter into any swap or
other derivatives transaction that transfers to another, in whole or in part,
any of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Xxxxxx Brothers
Inc. on behalf of the Underwriters; and to cause each officer and director of
the Company and stockholders of the Company who collectively own at least 94% of
the Common Stock outstanding as of the date of this Agreement, assuming the
conversion or exercise of all convertible securities, stock options and warrants
of the Company outstanding as of the date of this Agreement and exercisable
within 180 days from the date of the Prospectus to furnish to the
Representatives, prior to the First Delivery Date, a letter or letters,
substantially in the form of Exhibit A hereto, pursuant to which each such
person shall agree not to, directly or indirectly, (x) offer for sale, sell,
pledge or otherwise dispose of (or enter into any transaction or device which
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is designed to, or could be expected to, result in the disposition by any person
at any time in the future of) any shares of Common Stock or securities
convertible into or exchangeable for Common Stock (other than as a result of the
conversion of securities existing as of the date hereof and provided that such
securities remain subject to the restrictions of this paragraph (i)) or (y)
enter into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of such
shares of Common Stock, whether any such transaction described in clause (x) or
(y) above is to be settled by delivery of Common Stock or other securities, in
cash or otherwise, in each case for a period of 180 days from the date of the
Prospectus, without the prior written consent of Xxxxxx Brothers Inc. on behalf
of the Underwriters;
(j) To apply for the inclusion of the Stock on the NASDAQ National
Market, and to use its best efforts to complete that listing, subject only to
official notice of issuance and evidence of satisfactory distribution, prior to
the First Delivery Date;
(k) To take such steps as shall be necessary to ensure that neither the
Company nor any subsidiary shall become an "investment company" as defined in
the Investment Company Act of 1940, as amended;
(l) In connection with the Directed Share Program, to ensure that the
Directed Shares will be restricted to the extent required by the National
Association of Securities Dealers, Inc. or the rules of such association from
sale, transfer, assignment, pledge or hypothecation for a period of three months
following the date of the effectiveness of the Registration Statement, and
Xxxxxx Brothers Inc. will notify the Company as to which Directed Share
Participants will need to be so restricted. At the request of Xxxxxx Brothers
Inc., the Company will direct its transfer agent to place stop transfer
restrictions upon such securities for such period of time; and
(m) To apply the net proceeds from the sale of the Stock being sold by
the Company as set forth in the Prospectus.
SECTION 6. Expenses. The Company agrees to pay (a) the costs incident
to the authorization, issuance, sale and delivery of the Stock and any taxes
payable in that connection; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; (c) the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), any Preliminary
Prospectus, the Prospectus and any amendment or supplement to the Prospectus,
all as provided in this Agreement; (d) the costs of producing and distributing
this Agreement and any other related documents in connection with the offering,
purchase, sale and delivery of the Stock; (e) the filing fees incident to
securing the review by the National Association of Securities Dealers, Inc. of
the terms of sale of the Stock; (f) any applicable listing or other fees; (g)
the fees and expenses (not in excess, in the aggregate, of $10,000) of
qualifying the Stock under the securities laws of the several jurisdictions as
provided in Section 4(h) and of preparing, printing and distributing a Blue Sky
Memorandum (including reasonable related fees and expenses of counsel to the
Underwriters); (h) all costs and expenses of the Underwriters, including the
fees and disbursements of counsel for the Underwriters, incident to the Directed
Stock Program described
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in Section 3; (i) 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 Stock, 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 (j) all
other costs and expenses incident to the performance of the obligations of the
Company under this Agreement; provided that, except as provided in this Section
6 and in Section 11, the Underwriters shall pay their own costs and expenses,
including the costs and expenses of their counsel, any transfer taxes on the
Stock which they may sell and the expenses of advertising any offering of the
Stock made by the Underwriters.
SECTION 7. Conditions of Underwriters' Obligations. The respective
obligations of the Underwriters on each Delivery Date hereunder are subject to
the accuracy, when made and on such Delivery Date, of the representations and
warranties of the Company contained herein, to the performance by the Company of
its obligations hereunder, and to each of the following additional terms and
conditions:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a); no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and any request of the Commission for inclusion of additional
information in the Registration Statement or the Prospectus or otherwise shall
have been complied with.
(b) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Stock, the Registration
Statement and the Prospectus, and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriters, and the
Company shall have furnished to such counsel all documents and information that
they may reasonably request to enable them to pass upon such matters.
(c) Xxxxx & Xxxxxxx L.L.P. shall have furnished to the Representatives
their written opinion, as counsel to the Company, addressed to the Underwriters
and dated such Delivery Date, in form and substance reasonably satisfactory to
the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its respective
jurisdictions of incorporation, are duly qualified to do business and are in
good standing as foreign corporations in each jurisdiction in which its
respective ownership or lease of property or the conduct of its respective
businesses requires such qualification and has all power and authority necessary
to own or hold its respective properties and conduct the businesses in which it
is engaged;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the Company
have been duly and
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validly authorized and issued, are fully paid and non-assessable and conform to
the description thereof contained in the Prospectus;
(iii) The shares of the Stock being delivered on such Delivery
Date to the Underwriters hereunder have been duly and validly authorized and,
when issued and delivered against payment therefor will be duly and validly
issued, fully paid and non-assessable;
(iv) There are no preemptive or other rights to subscribe for
or to purchase, nor any restriction upon the voting or transfer of, any shares
of the Stock pursuant to the Company's charter or by-laws or any agreement or
other instrument known to such counsel;
(v) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of which
any property or assets of the Company or any of its subsidiaries is the subject
which, if determined adversely to the Company or any of its subsidiaries, might
have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(vi) The Registration Statement was declared effective under
the Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph of Rule
424(b) of the Rules and Regulations specified in such opinion on the date
specified therein and no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the knowledge of such counsel, no
proceeding for that purpose is pending or threatened by the Commission;
(vii) The Registration Statement and the Prospectus and any
further amendments or supplements thereto made by the Company prior to such
Delivery Date (except for the financial statements and financial schedules and
other financial and statistical data included therein, as to which such counsel
need express no belief) comply as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations;
(viii) The statements contained in the Prospectus under the
captions "Description of Capital Stock" and "Shares Eligible for Future Sale"
insofar as it describes federal statutes, rules and regulations, constitutes a
fair summary thereof;
(ix) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the Securities
Act or by the Rules and Regulations which have not been described or filed as
exhibits to the Registration Statement;
(x) This Agreement has been duly authorized, executed and
delivered by the Company;
(xi) The issue and sale of the shares of Stock being delivered
on such Delivery Date by the Company pursuant to this Agreement, and the
execution, delivery and
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compliance by the Company with all of the provisions of this Agreement and the
consummation of the transactions contemplated hereby will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such actions result in
any violation of the provisions of the charter or by-laws of the Company or any
of its subsidiaries or any statute or any order, rule or regulation known to
such counsel of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties or
assets; and, except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the Underwriters,
no consent, approval, authorization or order of, or filing or registration with,
any such court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby, except for such consents, approvals,
authorizations, orders, filings or registrations as have been obtained or made;
(xii) Except as described in the Prospectus, to the best of
such counsel's knowledge, 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 owned or to be owned by such person or to
require the Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Company under the
Securities Act;
(xiii) Neither the Company nor any subsidiary is an
"investment company" as defined in the Investment Company Act of 1940, as
amended;
(xiv) The Company is listed in the records of the Patent and
Trademark Office as the sole holder of record of each of the patent applications
listed under the heading "U.S. Patent Applications Submitted by the Company" on
Schedule 2 hereof (the "U.S. Applications"). Such counsel knows of no claims of
third parties to any ownership interest or lien with respect to any of the U.S.
Applications. To such counsel's knowledge, none of the U.S. Applications has
been rejected;
(xv) The Company is listed in the records of the appropriate
foreign office as the sole holder of record of each of the foreign patent
applications listed under the heading "Non-U.S. Patent Applications Submitted by
the Company" on Schedule 3 hereof (the "Non-U.S. Applications") (collectively,
the U.S. Applications and the Non-U.S. Applications are referred to herein as
the "Applications"). Such counsel knows of no claims of third parties to any
ownership interest or lien with respect to any of the Non-U.S. Applications. To
such counsel's knowledge, none of the Non-U.S. Applications has been rejected;
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(xvi) Such counsel is not aware of any facts that would lead
such counsel to conclude that any patent issued in respect of an Application
would be invalid;
(xvii) Such counsel is not aware of any material defects of
form in the preparation or filing of the Applications on behalf of the Company.
The Applications are being diligently pursued by the Company;
(xviii) The statements under the Prospectus captions "Risk
Factors--The intellectual property rights we rely on to protect the technology
underlying our products and techniques may be inadequate to prevent third
parties from using our technology or developing competing products and services
or to protect our interests in our proprietary drug candidates,"
"Business--Array's Technology Platform," "Business--Array's Products and
Services" and "Business--Intellectual Property" (collectively, the "Intellectual
Property Portion") in the Registration Statement and the Prospectus, and any
amendments or supplements thereto, insofar as such statements constitute a
summary of the Applications, are in all material respects accurate summaries and
fairly summarize in all material respects the legal matters, documents and
proceedings relating to the Applications;
(xix) Such counsel is not aware that any valid patent is
infringed by the activities of the Company or by the manufacture, use or sale of
any product, device, instrument, drug or other material made and used according
to the Applications;
(xx) Such counsel knows of no pending or threatened action,
suit, proceeding or claim by others that the Company is infringing or otherwise
violating any patents or trade secrets;
(xxi) Such counsel is not aware of any pending or threatened
actions, suits, proceedings or claim by others challenging the validity or scope
of the Applications; and
(xxii) Such counsel is not aware of any infringement on the
part of any third party of the Applications, trade secrets, know-how or other
proprietary rights of the Company.
In rendering such opinion, such counsel may state that their opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of New York and the General Corporation Law of the State
of Delaware. Such opinion shall also be to the effect that (x) such counsel has
acted as counsel to the Company in connection with the preparation of the
Registration Statement and (y) based on the foregoing, no facts have come to the
attention of such counsel which lead them to believe that the Registration
Statement (except for the financial statements and financial schedules and other
financial and statistical data included therein, as to which such counsel need
express no belief) as of the Effective Date, contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or that the
Prospectus (except as stated above) contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The
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foregoing opinion and statement may be qualified by a statement to the effect
that such counsel does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus (other than as set forth in clause (viii) above).
(d) The Representatives shall have received from Xxxxxx & Xxxxxxx,
counsel for the Underwriters, such opinion or opinions, dated such Delivery
Date, with respect to the issuance and sale of the Stock, the Registration
Statement, the Prospectus and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel such
documents as they reasonably request for the purpose of enabling them to pass
upon such matters.
(e) At the time of execution of this Agreement, the Representatives
shall have received from Ernst & Young LLP a letter or letters, in form and
substance satisfactory to the Representatives, addressed to the Underwriters and
dated the date hereof (i) confirming that they are independent public
accountants within the meaning of the Securities Act and are in compliance with
the applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission and (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than five days prior to the date hereof), the
conclusions and findings of such firm with respect to the financial information
and other matters ordinarily covered by accountants' "comfort letters" to
underwriters in connection with registered public offerings.
(f) With respect to the letter or letters of Ernst & Young LLP referred
to in the preceding paragraph and delivered to the Representatives concurrently
with the execution of this Agreement (the "initial letters"), the Company shall
have furnished to the Representatives a letter (the "bring-down letter") of such
accountants, addressed to the Underwriters and dated such Delivery Date (i)
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualification of accountants under Rule 2-01 of Regulation S-X
of the Commission, (ii) stating, as of the date of the bring-down letter (or,
with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the Prospectus, as
of a date not more than five days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by the initial letters and (iii)
confirming in all material respects the conclusions and findings set forth in
the initial letters.
(g) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:
(i) The representations, warranties and agreements of the
Company in Section 1 are true and correct as of such Delivery Date; the Company
has complied with all its agreements contained herein; and the conditions set
forth in Sections 7(a) and 7(h) have been fulfilled; and
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(ii) They have carefully examined the Registration Statement
and the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue statement of a
material fact and did not omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and (B)
since the Effective Date, no event has occurred which should have been set forth
in a supplement or amendment to the Registration Statement or the Prospectus.
(h) The Company shall not have sustained since the date of the latest
audited financial statements included in the Prospectus (A) any loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus or (B) since such date there shall not have been
any change in the capital stock or long-term debt of the Company or any change,
or any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (A) or
(B), is, in the judgment of the Representatives, so material and adverse as to
make it impracticable or inadvisable to proceed with the public offering or the
delivery of the Stock being delivered on such Delivery Date on the terms and in
the manner contemplated in the Prospectus.
(i) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or in
the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or minimum
prices shall have been established on any such exchange or such market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a declaration
of a national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of
the Representatives, impracticable or inadvisable to proceed with the public
offering or delivery of the Stock being delivered on such Delivery Date on the
terms and in the manner contemplated in the Prospectus.
(j) The National Market System shall have approved the Stock for
inclusion, subject only to official notice of issuance and evidence of
satisfactory distribution.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to Xxxxxx & Xxxxxxx, counsel for the Underwriters.
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SECTION 8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus or in any amendment or supplement thereto, or (B) in
any materials or information provided to investors by, or with the approval of,
the Company in connection with the marketing of the offering of the Stock
("Marketing Materials"), including any roadshow or investor presentations made
to investors by the Company (whether in person or electronically), (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto, or in any Marketing Materials, any material fact required to be stated
therein or necessary to make the statements therein not misleading or (iii) any
act or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Stock or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent that it is determined in a final
judgment by a court of competent jurisdiction that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct), and shall reimburse each Underwriter and each
such officer, employee or controlling person promptly upon demand for any legal
or other expenses reasonably incurred by that Underwriter, officer, employee or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or in any such amendment or
supplement, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein which
information consists solely of the information specified in Section 8(e),
provided, further, that the foregoing indemnity with respect to any Preliminary
Prospectus shall not inure to the benefit of the Underwriters from whom the
person asserting any such loss, claim, damage or liability purchased Stock which
is subject thereof if the Underwriters were provided copies of the Preliminary
Prospectus and such person did not receive a copy of the Prospectus (or the
Prospectus as supplemented) at or prior to the confirmation of the sale of such
Stock to such person in any case where such delivery is required by the
Securities Act and the untrue statement or omission of a material fact contained
in such Preliminary Prospectus was corrected in the Prospectus (or the
Prospectus supplemented). The foregoing indemnity agreement is in addition
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to any liability which the Company may otherwise have to any Underwriter or to
any officer, employee or controlling person of that Underwriter.
The Company agrees to indemnify and hold harmless Xxxxxx Brothers Inc.
(including its officers and employees) and each person, if any, who controls
Xxxxxx Brothers Inc. within the meaning of the Securities Act ("Xxxxxx Brothers
Entities"), from and against any loss, claim, damage or liability or any action
in respect thereof to which any of the Xxxxxx Brothers Entities may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon (i) the failure of
any Directed Share Participant to pay for and accept delivery of the Directed
Share sold pursuant to the Directed Stock Program which, immediately following
the effectiveness of the Registration Statement, was subject to a properly
confirmed agreement to purchase or (ii) the Directed Stock Program, provided
that, the Company shall not be responsible under this subparagraph (ii) for any
loss, claim, damage, liability or action that is finally judicially determined
to have resulted from the gross negligence or willful misconduct of the Xxxxxx
Brothers Entities. The Company shall reimburse the Xxxxxx Brothers Entities
promptly upon demand for any legal or other expenses reasonably incurred by them
in connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company, its officers and employees, each of its directors,
and each person, if any, who controls the Company within the meaning of the
Securities Act from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer, employee or controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, the Registration Statement or the Prospectus, or in any amendment or
supplement thereto, any material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of that Underwriter specifically for inclusion
therein, and shall reimburse the Company and any such director, officer,
employee or controlling person for any legal or other expenses reasonably
incurred by such person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in addition to
any liability which any Underwriter may otherwise have to the Company or any
such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 8, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability
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which it may have under this Section 8 except to the extent it has been
materially prejudiced by such failure and, provided further, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party otherwise than under this Section 8. If any
such claim or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ a single national counsel and
local counsel to represent jointly the Representatives and those other
Underwriters and their respective officers, employees and controlling persons
who may be subject to liability arising out of any claim in respect of which
indemnity may be sought by the Underwriters against the Company under this
Section 8 if, in the reasonable judgment of the Representatives, it is advisable
for the Representatives and those Underwriters, officers, employees and
controlling persons to be jointly represented by separate counsel, and in that
event the fees and expenses of such separate counsel shall be paid by the
Company. Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to Section 8(a) hereof in respect of such claim or
action, then in addition to such separate firm for the indemnified parties, the
indemnifying party shall be liable for the fees and expenses of not more than
one separate firm (in addition to any local counsel) for the Xxxxxx Brothers
Entities for the defense of any loss, claim, damage, liability or action arising
out of the Directed Stock Program. No indemnifying party shall (i) without the
prior written consent of the indemnified parties (which consent shall not be
unreasonably withheld), settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 8(a) or 8(b) in respect of any loss, claim, damage or liability,
or any action in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party, contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability, or action in respect thereof, (i) in such proportion
as shall be appropriate to reflect the relative benefits received by the Company
on the one hand and the Underwriters on the other from the offering of the Stock
or (ii) if the allocation provided by clause (i) above is not
21
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permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Underwriters on the other with respect to such offering shall
be deemed to be in the same proportion as the total net proceeds from the
offering of the Stock purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total underwriting discounts
and commissions received by the Underwriters with respect to the shares of the
Stock purchased under this Agreement on the other hand bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company or the
Underwriters, the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 8 were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 8 shall be deemed
to include, for purposes of this Section 8(d), 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(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Stock underwritten by
it and distributed to the public was offered to the public exceeds the amount of
any damages which such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 13(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 8(d) are
several in proportion to their respective underwriting obligations and not
joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of and in the "Underwriting"
section and the concession and reallowance figures appearing under the caption
"Underwriting" in, the Prospectus are correct and constitute the only
information concerning such Underwriters furnished in writing to the Company by
or on behalf of the Underwriters specifically for inclusion in the Registration
Statement and the Prospectus.
SECTION 9. Defaulting Underwriters. If, on either Delivery Date, any
Underwriter defaults in the performance of its obligations under this Agreement,
the remaining non-defaulting Underwriters shall be obligated to purchase the
Stock which the defaulting Underwriter agreed but failed to purchase on such
Delivery Date in the respective proportions which the number of shares of the
Firm Stock set opposite the name of each remaining non-
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defaulting Underwriter in Schedule 1 hereto bears to the total number of shares
of the Firm Stock set opposite the names of all the remaining non-defaulting
Underwriters in Schedule 1 hereto; provided, however, that the remaining
non-defaulting Underwriters shall not be obligated to purchase any of the Stock
on such Delivery Date if the total number of shares of the Stock which the
defaulting Underwriter or Underwriters agreed but failed to purchase on such
date exceeds 9.09% of the total number of shares of the Stock to be purchased on
such Delivery Date, and any remaining non-defaulting Underwriter shall not be
obligated to purchase more than 110% of the number of shares of the Stock which
it agreed to purchase on such Delivery Date pursuant to the terms of Section 2.
If the foregoing maximums are exceeded, the remaining non-defaulting
Underwriters, or those other underwriters satisfactory to the Representatives
who so agree, shall have the right, but shall not be obligated, to purchase, in
such proportion as may be agreed upon among them, all the Stock to be purchased
on such Delivery Date. If the remaining Underwriters or other underwriters
satisfactory to the Representatives do not elect to purchase the shares which
the defaulting Underwriter or Underwriters agreed but failed to purchase on such
Delivery Date, this Agreement (or, with respect to the Second Delivery Date, the
obligation of the Underwriters to purchase, and of the Company to sell, the
Option Stock) shall terminate without liability on the part of any
non-defaulting Underwriter or the Company, except that the Company will continue
to be liable for the payment of expenses to the extent set forth in Sections [6]
and 11. As used in this Agreement, the term "Underwriter" includes, for all
purposes of this Agreement unless the context requires otherwise, any party not
listed in Schedule 1 hereto who, pursuant to this Section 9, purchases the
Shares which a defaulting Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Stock of a defaulting or
withdrawing Underwriter, either the Representatives or the Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of counsel for the Company or counsel for the
Underwriters may be necessary in the Registration Statement, the Prospectus or
in any other document or arrangement.
SECTION 10. Termination. The obligations of the Underwriters hereunder
may be terminated by the Representatives by notice given to and received by the
Company prior to delivery of and payment for the Firm Stock if, prior to that
time, any of the events described in Sections 7(j) or 7(k), shall have occurred
or if the Underwriters shall decline to purchase the Stock for any reason
permitted under this Agreement.
SECTION 11. Reimbursement of Underwriters' Expenses. If the Company
shall fail to tender the Stock for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company
(including, without limitation, with respect to the transactions) is not
fulfilled, the Company will reimburse the Underwriters for all reasonable
out-of-pocket expenses (including fees and disbursements of counsel) incurred by
the Underwriters in connection with this Agreement and the proposed purchase of
the Stock, and, upon demand, the Company shall pay the full amount thereof to
the Representatives. If this Agreement is terminated pursuant to
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Section 9 by reason of the default of one or more Underwriters, the Company
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
SECTION 12. Notices, Etc. All statements, requests, notices and
agreements hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Xxxxxx Brothers Inc., Three World Financial Center,
New York, New York 10285, Attention: Syndicate Department (Fax: 000-000-0000),
with a copy, in the case of any notice pursuant to Section 8(c), to the Director
of Litigation, Office of the General Counsel, Xxxxxx Brothers Inc., 0 Xxxxx
Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX 00000; and
(b) if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Xxxxxx Xxxxxx, Chief Executive Officer (Fax:
(000) 000-0000).
provided, however, that any notice to an Underwriter pursuant to Section 9(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company shall
be entitled to act and rely upon any request, consent, notice or agreement given
or made on behalf of the Underwriters by Xxxxxx Brothers Inc. on behalf of the
Representatives.
SECTION 13. Persons Entitled to Benefit of Agreement. This Agreement
shall inure to the benefit of and be binding upon the Underwriters and the
Company and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
(A) the representations, warranties, indemnities and agreements of the Company
contained in this Agreement shall also be deemed to be for the benefit of the
person or persons, if any, who control any Underwriter within the meaning of
Section 15 of the Securities Act and (B) the indemnity agreement of the
Underwriters contained in Section 8(b) of this Agreement shall be deemed to be
for the benefit of directors of the Company, officers of the Company who have
signed the Registration Statement and any person controlling the Company within
the meaning of Section 15 of the Securities Act. Nothing in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
SECTION 14. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement or made by or on behalf on them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Stock and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
SECTION 15. Definition of the Terms "Business Day" and "Subsidiary."
For purposes of this Agreement, (a) "business day" means each Monday, Tuesday,
Wednesday,
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Thursday or Friday which is not a day on which banking institutions in New York
are generally authorized or obligated by law or executive order to close and (b)
"subsidiary" has the meaning set forth in Rule 405 of the Rules and Regulations.
SECTION 16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.
SECTION 17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
SECTION 18. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
ARRAY BIOPHARMA INC.
By /s/ XXXXXXX XXXXXXXXXX
----------------------------------
Name: Xxxxxxx Xxxxxxxxxx
-------------------------------
Title: Chief Financial Officer
-----------------------------
Accepted:
XXXXXX BROTHERS INC.
DEUTSCHE BANK SECURITIES INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto
By XXXXXX BROTHERS INC.
By /s/ XXXXXX XXXXXXXXX
--------------------------------
Xxxxxx Xxxxxxxxx
Vice President
S-1
27
SCHEDULE 1
NUMBER OF SHARES OF
U.S. UNDERWRITERS FIRM STOCK TO BE PURCHASED
----------------- --------------------------
Xxxxxx Brothers Inc................................................. 2,926,000
Deutsche Bank Securities Inc. ...................................... 2,048,000
Xxxx Xxxxx Xxxx Xxxxxx, Inc......................................... 877,000
Chase Securities Inc................................................ 65,000
ING Barings LLC..................................................... 65,000
Prudential Securities Incorporated.................................. 65,000
XX Xxxxx Securities Corporation..................................... 65,000
UBS Warburg LLC..................................................... 65,000
Xxxxxx Xxxxxx Partners LLC.......................................... 65,000
Chatsworth Securities LLC........................................... 37,000
Xxxxxxxx & Xxxxxxxx LLC............................................. 37,000
Xxxxxxxxxx & Co. Inc................................................ 37,000
Xxxxxx Xxxxxx Xxxxxxxx & Co., Inc................................... 37,000
Xxxxxx X. Xxxxx & Co., L.P.......................................... 37,000
PMG Capital......................................................... 37,000
Xxxxxxx Xxxxx & Associates, Inc..................................... 37,000
Total............................................................... 6,500,000
=========
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SCHEDULE 2
U.S. APPLICATIONS
29
SCHEDULE 3
NON-U.S. APPLICATIONS
30
EXHIBIT A
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
DEUTSCHE BANC ALEX. XXXXX
XXXX XXXXX XXXX XXXXXX, INCORPORATED
As Representatives of the
several underwriters
c/x XXXXXX BROTHERS INC.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that Xxxxxx Brothers Inc. ("Xxxxxx
Brothers"), and Deutsche Banc Alex. Xxxxx and Xxxx Xxxxx Xxxx Xxxxxx,
Incorporated, as representatives (the "Representatives") of the several
underwriters (the "Underwriters"), propose to enter into an underwriting
agreement (the "Underwriting Agreement") with Array BioPharma, Inc., a Delaware
corporation (the "Company") providing for the initial public offering by the
Underwriters, including the Representatives, of shares of common stock (the
"Common Stock") of the Company (the "Initial Public Offering").
In consideration of the Underwriter's agreement to purchase and
undertake the Initial Public Offering of Common Stock, and for other good and
valuable consideration, receipt of which is hereby acknowledged, the undersigned
hereby irrevocably agrees that, without the prior written consent of Xxxxxx
Brothers, the undersigned will not, directly or indirectly, (1) offer for sale,
sell, pledge, or otherwise dispose of (or enter into any transaction or device
that is designed to, or could be expected to, result in the disposition by any
person at any time in the future of) any shares of Common Stock (including,
without limitation, shares of Common Stock that may be deemed to be beneficially
owned by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission (the "SEC") and shares of Common Stock that
may be issued upon exercise of any option or warrant) or securities convertible
into or exchangeable for Common Stock owned by the undersigned on the date of
execution of this Lock-Up Letter Agreement or on the date of completion of the
Initial Public Offering, or (2) enter into any swap or other derivatives
transaction that transfers to another, in whole or in part, any of the economic
benefits or risks of ownership of such shares of Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or other securities, in cash or otherwise, for a period of 180 days
from the
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effective date of the Registration Statement on Form S-1 filed with the SEC in
connection with the Initial Public Offering.
Notwithstanding the foregoing, the undersigned may transfer the Common
Stock (i) as a bona fide gift or gifts, provided that the donee or donees
thereof agree to be bound by the restrictions set forth herein, (ii) to any
trust or partnership for the direct or indirect benefit of the undersigned or
the immediate family of the undersigned, provided that the trustee of the trust
or the general partner of the partnership agrees to be bound by the restrictions
set forth herein, and provided further that any such transfer shall not involve
a disposition for value, or (iii) with the prior written consent of Xxxxxx
Brothers on behalf of the Underwriters. For purposes of this Lock-Up Letter
Agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin. In addition, notwithstanding the
foregoing, if the undersigned is a corporation, the corporation may transfer the
capital stock of the Company to any wholly-owned subsidiary of such corporation;
provided, however, that in any such case, it shall be a condition to the
transfer that the transferee execute an agreement stating that the transferee is
receiving and holding such capital stock subject to the provisions of this
Lock-Up Letter Agreement and there shall be no further transfer of such capital
stock except in accordance with this Lock-Up Letter Agreement, and provided
further that any such transfer shall not involve a disposition for value. 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
Common Stock except in compliance with the foregoing restrictions.
The undersigned further agrees not to cause, or request that the
Company cause, a registration statement covering any shares of Common Stock to
be filed by the Company for a period of 180 days from the effective date of the
above-referenced Registration Statement, pursuant to rights under any
registration rights agreement or otherwise, without the prior written consent of
Xxxxxx Brothers.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this Lock-Up Letter Agreement.
It is understood that, if the Company does not proceed with the Initial
Public Offering by February 28, 2001, we will be released from our obligations
under this Lock-Up Agreement.
The undersigned understands that the Company and the Underwriters will
proceed with the Initial Public Offering in reliance on this Lock-Up Letter
Agreement.
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The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this Lock-Up Letter Agreement and that,
upon request, the undersigned will execute any additional documents necessary in
connection with the enforcement hereof. Any obligations of the undersigned shall
be binding upon the heirs, personal representatives, successors and assigns of
the undersigned.
Very truly yours,
---------------------------------
Signature
---------------------------------
Print Name
Dated: , 2000
--------------
