Exhibit A to Amendment No. 3
to Schedule 13D for Tercica, Inc.
LOCK-UP LETTER AGREEMENT
XXXXXX BROTHERS INC.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The undersigned understands that you (the "Underwriter") propose to
enter into an Underwriting Agreement (the "Underwriting Agreement") providing
for the purchase by the Underwriter of shares (the "Stock") of Common Stock,
par value $0.001 per share (the "Common Stock"), of Tercica, Inc., a Delaware
corporation (the "Company"), and that the Underwriter proposes to reoffer the
Stock to the public (the "Offering").
In consideration of the execution of the Underwriting Agreement by the
Underwriter, and for other good and valuable consideration, the undersigned
hereby irrevocably agrees that, without the prior written consent of the
Underwriter, 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) ("Transfer") 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 and shares of
Common Stock that may be issued upon exercise of any options or warrants) or
securities convertible into or exercisable or exchangeable for Common Stock,
(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 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, (3) make any demand for or exercise any
right or cause to be filed a registration statement, including any amendments
thereto, with respect to the registration of any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock or
any other securities of the Company or (4) publicly disclose the intention to
do any of the foregoing, for a period commencing on the date hereof and ending
on the 45th day after the date of the Prospectus Supplement relating to the
Offering (such 45-day period, the "Lock-Up Period").
The foregoing paragraph shall not apply to (a) the sale of any Stock to
the Underwriter pursuant to the Underwriting Agreement, (b) transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Offering, (c) transactions pursuant
to written trading plans designed to comply with Rule 10b5-1(c) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (d) bona
fide gifts or other Transfers of shares of Common Stock for no consideration,
or (e) Transfers of any shares of Common Stock to any trust for the direct or
indirect benefit of the undersigned or to the "immediate family" (meaning any
relationship by blood, marriage or adoption, not more remote than first
cousin) of the undersigned, provided, however, that in the case of any
Transfer or distribution pursuant to clause (d) or (e), (I) each donee or
distributee shall execute and deliver to the Underwriter a duplicate form of
this lock-up agreement, (ii) no filing by any party (donor, donee, transferor
or transferee) under Section 16(a) of the Exchange Act, shall be required or
shall be made voluntarily in connection with such Transfer or distribution
(other than, in connection with Transfers or distributions made prior to
January 1, 2006, a filing on a Form 5 for the Company's fiscal year 2005,
which are due no later than February 14, 2006), and (iii) such Transfer or
distribution shall not involve a disposition for value.
In addition, notwithstanding the foregoing, if the undersigned is a
partnership or limited liability company, the undersigned may transfer the
undersigned's shares of Common Stock to partners or members of the
undersigned, as applicable, or to the estates of any such partners, or
members, and any partner or member who is an individual may transfer any such
shares of Common Stock by gift, will or intestate succession; and if the
undersigned is a trust, the undersigned may Transfer the undersigneds shares
of Common Stock to any beneficiary of the undersigned or to the estate of any
such beneficiary; and if the undersigned is a corporation, the undersigned may
Transfer the undersigned's shares of Common Stock to majority-owned
subsidiaries of the undersigned, to holders of securities possessing at least
50% of the undersigned's outstanding voting power or to entities under common
control with the undersigned; provided, however, that in any such case, it
shall be a condition to the Transfer that (I) each transferee shall execute
and deliver to the Underwriter a duplicate form of this lock-up agreement,
(ii) no filing by any party (donor, donee, transferor or transferee) under
Section 16(a) of the Exchange Act, shall be required or shall be made
voluntarily in connection with such Transfer (other than, in connection with
Transfers or distributions made prior to January 1, 2006, a filing on a Form 5
for the Company's fiscal year 2005, which are due no later than February 14,
2006), and (iii) such Transfer shall not involve a disposition for value.
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 notifies the Underwriter that it
does not intend to proceed with the Offering, if the Underwriting Agreement
does not become effective, or if the Underwriting Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated
prior to payment for and delivery of the Stock, the undersigned will be
released from its obligations under this Lock-Up Letter Agreement.
The undersigned understands that the Company and the Underwriter will
proceed with the Offering in reliance on this Lock-Up Letter Agreement.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will only be made pursuant
to an Underwriting Agreement, the terms of which are subject to negotiation
between the Company and the Underwriter.
[Signature page follows]
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,
RHO VENTURES IV, L.P.
By: Rho Management Ventures IV, L.L.C., General Partner
/s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, Managing Partner
RHO VENTURES IV (QP), L.P.
By: Rho Management Ventures IV, L.L.C., General Partner
/s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, Managing Partner
RHO VENTURES IV GmbH & CO. BETEILIGUNGS KG
By: Rho Capital Partners Verwaltungs GmbH, General Partner
/s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, Managing Partner
RHO MANAGEMENT TRUST I
By: Rho Capital Partners, Inc., as Investment Advisor
/s/ Xxxxxx Xxxx
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Xxxxxx Xxxx [Chief Executive Officer]
Dated: [executed January 23, 2006]
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,
Xxxx Xxxxxxx
/s/ Xxxx Xxxxxxx
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Dated: [executed January 23, 2006]
