5,800,000 SHARES*
LA JOLLA PHARMACEUTICAL COMPANY
COMMON STOCK
UNDERWRITING AGREEMENT
March 29, 2007
XXXXXXX & COMPANY, LLC
X.X. XXXXXXX & SONS, INC.
As Representatives of the several Underwriters
c/o Needham & Company, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
La Jolla Pharmaceutical Company, a Delaware corporation (the "Company"),
proposes to issue and sell 5,800,000 shares (the "Firm Shares") of the Company's
Common Stock, $.01 par value per share (the "Common Stock"), to you and to the
several other Underwriters named in Schedule I hereto (collectively, the
"Underwriters"), for whom you are acting as representatives (the
"Representatives"). The Company has also agreed to grant to you and the other
Underwriters an option (the "Option") to purchase up to an additional 870,000
shares of Common Stock, on the terms and for the purposes set forth in Section
1(b) (the "Option Shares"). The Firm Shares and the Option Shares are referred
to collectively herein as the "Shares."
The Company confirms as follows its agreements with the Representatives and
the several other Underwriters.
1. Agreement to Sell and Purchase.
(a) On the basis of the representations, warranties and agreements of the
Company herein contained and subject to all the terms and conditions of this
Agreement, (i) the Company agrees to issue and sell the Firm Shares to the
several Underwriters and (ii) each of the Underwriters, severally and not
jointly, agrees to purchase from the Company the respective number of Firm
Shares set forth opposite that Underwriter's name in Schedule I hereto, at the
purchase price of $5.88 for each Firm Share sold to the individuals or entities
listed on Schedule II hereto and at the purchase price of $5.64 for each Firm
Share sold to other individuals or entities.
(b) Subject to all the terms and conditions of this Agreement, the Company
grants the Option to the several Underwriters to purchase, severally and not
jointly, up to 870,000 Option Shares at the same price per share, as applicable,
as the Underwriters shall pay for the Firm Shares. The Option may be exercised
only to cover over-allotments in the sale of the Firm Shares by the Underwriters
and may be exercised in whole or in part at any time (but not more than once) on
or before the 30th day after the date of this Agreement upon written or
telegraphic notice (the "Option Shares Notice") by the Representatives to the
Company no later than 12:00 noon, New York City time, at least two and no more
than five business days before the date specified for closing in the Option
Shares Notice (the "Option Closing Date"), setting forth the aggregate number of
Option Shares to be purchased and the
----------
* Plus an option to purchase up to an additional 870,000 shares to cover
over-allotments.
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time and date for such purchase. On the Option Closing Date, the Company will
issue and sell to the Underwriters the number of Option Shares set forth in the
Option Shares Notice, and each Underwriter will purchase such percentage of the
Option Shares as is equal to the percentage of Firm Shares that such Underwriter
is purchasing, as adjusted by the Representatives in such manner as they deem
advisable to avoid fractional shares.
2. Delivery and Payment. Delivery of the Firm Shares shall be made to or as
instructed by the Representatives for the accounts of the several Underwriters
in a form reasonably acceptable to the Representatives against payment by the
Underwriters of the purchase price by wire transfer payable in same-day funds to
the order of the Company at the office of Xxxxxxx & Company, LLC, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at 10:00 a.m., New York City time, on the
third (or, if each purchase price set forth in Section 1(a) hereof is determined
after 4:30 p.m., New York City time, the fourth) business day after the date of
this Agreement, or at such time on such other date, not later than seven
business days after the date of this Agreement, as may be agreed upon by the
Company and the Representatives (such date is hereinafter referred to as the
"Closing Date").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Underwriters (in the manner specified above) will take
place at the offices specified above for the Closing Date at the time and date
(which may be the Closing Date) specified in the Option Shares Notice.
The Shares shall be in definitive form and shall be registered in such
names and in such denominations as the Representatives shall request at least
two business days prior to the Closing Date or the Option Closing Date, as the
case may be, by written notice to the Company, and shall be delivered by or on
behalf of the Company as instructed by the Representatives through the
facilities of The Depository Trust Company ("DTC"). The Company agrees to make
certificates representing the Shares or evidence of their issuance available for
inspection at least 24 hours prior to the Closing Date or the Option Closing
Date, as the case may be.
The cost of original issue tax stamps and other transfer taxes, if any, in
connection with the issuance and delivery of the Firm Shares and Option Shares
by the Company to the respective Underwriters shall be borne by the Company. The
Company will pay and save each Underwriter and any subsequent holder of the
Shares harmless from any and all liabilities with respect to or resulting from
any failure or delay in paying federal and state stamp and other transfer taxes,
if any, which may be payable or determined to be payable in connection with the
original issuance or sale to such Underwriter of the Shares.
3. Representations and Warranties of the Company. The Company represents,
warrants and covenants to each Underwriter that:
(a) The Company meets the requirements for the use of Form S-3 and a
registration statement (Registration No. 333-101499) on Form S-3 relating to the
Shares, including a base prospectus relating to the Shares (the "Base
Prospectus") and such amendments thereto as may have been required to the date
of this Agreement, has been prepared by the Company under the provisions of the
Securities Act of 1933, as amended (the "Act"), and the rules and regulations
(collectively referred to as the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder, has been filed with the
Commission, and has been declared effective by the Commission, and the offering
of the Shares complies with Rule 415 under the Act. A final prospectus
supplement to the Base Prospectus relating to the Shares and the offering
thereof will be filed promptly by the Company with the Commission in accordance
with Rule 424(b) of the Rules and Regulations (such final prospectus supplement,
as so filed, the "Prospectus Supplement"). Such registration statement at any
given time, including the amendments thereto to such time, the exhibits and any
schedules thereto at such time, the documents otherwise deemed to be a part
thereof or included therein by the Rules and Regulations (including Rule 430B
thereof), and any registration statement relating to the offering contemplated
by this Agreement and filed pursuant to Rule 462(b) of the Rules and Regulations
("Rule 462(b)"), is herein called the "Registration Statement." The term
"preliminary prospectus" means the preliminary prospectus (including any
preliminary prospectus supplement) relating to the Shares and the offering
thereof as first filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations ("Rule 424(b)"). The term "Prospectus" means the Base Prospectus
together with the Prospectus Supplement, except that if such Base Prospectus is
amended or supplemented on or prior to the date on which the Prospectus
Supplement was first filed pursuant to Rule 424(b), the term "Prospectus" shall
mean the Base Prospectus as so amended or supplemented and as supplemented by
the Prospectus Supplement. Any reference herein to the Registration Statement,
the Base Prospectus, a preliminary prospectus, the Prospectus Supplement, or
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the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein, and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration Statement,
the Base Prospectus, a preliminary prospectus, the Prospectus Supplement, or the
Prospectus shall be deemed to refer to and include the filing of any document
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
after the time the Registration Statement initially became effective (the
"Effective Date"), the date of the Base Prospectus, any preliminary prospectus,
the Prospectus Supplement, or the Prospectus, as the case may be, and deemed to
be incorporated therein by reference. The term "Issuer Free Writing Prospectus"
means any "issuer free writing prospectus," as defined in Rule 433 of the Rules
and Regulations ("Rule 433"), relating to the Shares in the form filed or
required to be filed with the Commission or, if not required to be filed, in the
form retained in the Company's records pursuant to Rule 433(g).
(b) No order preventing or suspending the use of the Base Prospectus, any
preliminary prospectus, the Prospectus Supplement, the Prospectus or any Issuer
Free Writing Prospectus has been issued by the Commission, and no stop order
suspending the effectiveness of the Registration Statement (including any
related registration statement filed pursuant to Rule 462(b)) or any
post-effective amendment thereto has been issued, and no proceeding for that
purpose has been initiated or threatened by the Commission. On the Effective
Date, on the date the Base Prospectus, any preliminary prospectus, the
Prospectus Supplement, or the Prospectus is first filed with the Commission
pursuant to Rule 424(b) (if required), at all times during the period through
and including the Closing Date and, if later, the Option Closing Date and when
any post-effective amendment to the Registration Statement becomes effective or
any amendment or supplement to the Prospectus is filed with the Commission, the
Registration Statement and the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment or supplement
thereto), including the financial statements included or incorporated by
reference in the Prospectus, did and will comply with all applicable provisions
of the Act, the Exchange Act, the rules and regulations of the Commission under
the Exchange Act (the "Exchange Act Rules and Regulations"), and the Rules and
Regulations and will contain all statements required to be stated therein in
accordance with the Act, the Exchange Act, the Exchange Act Rules and
Regulations, and the Rules and Regulations. As of the applicable effective date
as to each part of the Registration Statement, no part of the Registration
Statement, the Prospectus or any such amendment or supplement thereto did or
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements
therein not misleading. At the Effective Date, the date the Base Prospectus or
any amendment or supplement to the Base Prospectus, including any preliminary
prospectus or the Prospectus Supplement, is filed with the Commission, the date
of first use of any preliminary prospectus or the Prospectus Supplement, and at
the Closing Date and, if later, the Option Closing Date, the Prospectus did not
and will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
As of the Applicable Time, neither (x) the Issuer General Use Free Writing
Prospectus(es) (as defined below) issued at or prior to the Applicable Time (as
defined below), the Pricing Prospectus (as defined below) and the documents
listed on Schedule III hereto, all considered together (collectively, the
"General Disclosure Package"), nor (y) any individual Issuer Limited Use Free
Writing Prospectus, when considered together with the General Disclosure
Package, included any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
As used in this subsection and elsewhere in this Agreement:
"Applicable Time" means 7:00 P.M. (Eastern time) on March 29, 2007 or such
other time as agreed by the Company and Xxxxxxx & Company, LLC.
"Pricing Prospectus" means the Base Prospectus, as amended or supplemented
immediately prior to the Applicable Time, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part thereof. For
purposes of this definition, information contained in a form of prospectus that
is deemed retroactively to be a part of the Registration Statement pursuant to
Rule 430B shall be considered to be included in the Pricing Prospectus only if
the actual time that form of prospectus is filed with the Commission pursuant to
Rule 424(b) is prior to the Applicable Time.
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"Issuer General Use Free Writing Prospectus" means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors,
as evidenced by its being specified in Schedule III hereto.
"Issuer Limited Use Free Writing Prospectus" means any Issuer Free Writing
Prospectus that is not an Issuer General Use Free Writing Prospectus.
Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of the
Shares or until any earlier date that the issuer notified or notifies Xxxxxxx &
Company, LLC as described in the next sentence, did not, does not and will not
include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement or the Prospectus, including
any document incorporated by reference therein that has not been superseded or
modified. If there occurs an event or development as a result of which the
General Disclosure Package would include an untrue statement of a material fact
or would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances then prevailing, not misleading, the
Company will promptly notify the Representatives so that any use of the General
Disclosure Package may cease until it is amended or supplemented to correct
untrue statement or omission.
The foregoing representations and warranties in this Section 3(b) do not
apply to any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement,
the Prospectus Supplement, the Pricing Prospectus, the Prospectus or any Issuer
Free Writing Prospectus or any amendment or supplement thereto. The Company
acknowledges that the public offering price and the statements set forth in the
third, eighth, ninth, tenth and eleventh paragraphs under the heading
"Underwriting" in the Pricing Prospectus and the Prospectus constitute the only
information relating to any Underwriter furnished in writing to the Company by
the Representatives specifically for inclusion in the Registration Statement,
the Prospectus Supplement, the Pricing Prospectus, the Prospectus and any Issuer
Free Writing Prospectus.
(c) (i) At the earliest time after the filing of the Registration Statement
that the Company or another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2) of the Rules and Regulations) of the Shares and
(ii) as of the date hereof, the Company was not and is not an Ineligible Issuer
(as defined in Rule 405 of the Rules and Regulations ("Rule 405")), without
taking account of any determination by the Commission pursuant to Rule 405 that
it is not necessary that the Company be considered an Ineligible Issuer.
(d) The documents that are incorporated by reference in the Base
Prospectus, any preliminary prospectus, the Pricing Prospectus and the
Prospectus or from which information is so incorporated by reference, when they
became or become effective or were or are filed with the Commission, as the case
may be, complied or will comply in all material respects with the requirements
of the Act or the Exchange Act, as applicable, and the Rules and Regulations or
the Exchange Act Rules and Regulations, as applicable; and any documents so
filed and incorporated by reference subsequent to the Effective Date shall, when
they are filed with the Commission, comply in all material respects with the
requirements of the Act or the Exchange Act, as applicable, and the Rules and
Regulations or the Exchange Act Rules and Regulations, as applicable. No such
documents were filed with the Commission since the Commission's close of
business on the business day immediately prior to the date of this Agreement and
prior to the execution of this Agreement, except as set forth on Schedule III
hereto.
(e) The Company does not own, directly or indirectly, any shares of stock
or any other equity or long-term debt securities of any corporation or have any
equity interest in any corporation, firm, partnership, joint venture,
association or other entity, other than the subsidiaries listed in Exhibit 21 to
the Company's Annual Report on Form 10-K for the fiscal year ended December 31,
2006 (the "Subsidiaries"). The Company and each of its Subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation. The Company and each of its Subsidiaries
has full power and authority to conduct all the activities conducted by it, to
own or lease all the assets owned or leased by it and to conduct its business as
described in the Registration Statement, the Pricing Prospectus and the
Prospectus. The Company and each of its Subsidiaries is duly licensed or
qualified to do business and in good standing as a foreign corporation in all
jurisdictions in which the nature of the activities conducted by it or the
character of the assets owned or leased by it makes such license or
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not materially and adversely affect the
Company and its Subsidiaries, taken as a whole, or their respective businesses,
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properties, business prospects, conditions (financial or other) or results of
operations, taken as a whole (such effect is referred to herein as a "Material
Adverse Effect"). All of the outstanding shares of capital stock of each
Subsidiary have been duly authorized and validly issued and are fully paid and
nonassessable, and owned by the Company free and clear of all claims, liens,
charges and encumbrances; there are no securities outstanding that are
convertible into or exercisable or exchangeable for capital stock of any
Subsidiary. The Company and its Subsidiaries are not engaged in any discussions
or a party to any agreement or understanding, written or oral, regarding the
acquisition of an interest in any corporation, firm, partnership, joint venture,
association or other entity where such discussions, agreements or understandings
would require amendment to the Registration Statement pursuant to applicable
securities laws. Complete and correct copies of the certificate of incorporation
and of the by-laws of the Company and the memorandum or articles of association
of each of its Subsidiaries, all amendments thereto, have been delivered to the
Representatives, and no changes therein will be made subsequent to the date
hereof and prior to the Closing Date or, if later, the Option Closing Date.
(f) The Company has authorized capital stock as set forth under the caption
"Description of Capital Stock" and issued and outstanding capital stock as set
forth under the caption "The Offering" in the Pricing Prospectus as of the
respective dates set forth therein. All of the outstanding shares of capital
stock of the Company have been duly authorized, validly issued and are fully
paid and nonassessable and were issued in compliance with all applicable state
and federal securities laws; the Firm Shares and the Option Shares have been
duly authorized and when issued and paid for as contemplated herein will be
validly issued, fully paid and nonassessable; no preemptive or similar rights
exist with respect to any of the Shares or the issue and sale thereof other than
those rights that have been waived. The description of the capital stock of the
Company in the Registration Statement, the Pricing Prospectus and the Prospectus
is complete and accurate in all respects. Except as set forth in the Pricing
Prospectus and the Prospectus, the Company does not have outstanding and, at the
Closing Date and, if later, the Option Closing Date, will not have outstanding,
any options to purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, any shares of capital stock, or any such warrants, convertible
securities or obligations. No further approval or authority of stockholders or
the Board of Directors of the Company will be required for the issuance and sale
of the Shares as contemplated herein. The certificates evidencing the Shares are
in due and proper legal form and have been duly authorized for issuance by the
Company.
(g) The financial statements and schedules included or incorporated by
reference in the Registration Statement, the Pricing Prospectus or the
Prospectus present fairly the financial condition of the Company and its
consolidated Subsidiaries as of the respective dates thereof and the results of
operations and cash flows of the Company and its consolidated Subsidiaries for
the respective periods covered thereby, are all in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
entire period involved, except as otherwise disclosed in the Pricing Prospectus
or the Prospectus. No other financial statements or schedules of the Company are
required by the Act, the Exchange Act, the Exchange Act Rules and Regulations or
the Rules and Regulations to be included in the Registration Statement, the
Pricing Prospectus or the Prospectus. Ernst & Young LLP (the "Accountants"), who
have reported on such financial statements and schedules, are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations and Rule 3600T of the Public Company Accounting Oversight Board
("PCAOB"). The summary and selected consolidated financial and statistical data
included in the Registration Statement, the Pricing Prospectus and the
Prospectus present fairly the information shown therein and have been compiled
on a basis consistent with the audited financial statements incorporated by
reference in the Registration Statement, the Pricing Prospectus and the
Prospectus. All disclosures contained in the Registration Statement or the
General Disclosure Package regarding "non-GAAP financial measures" (as such term
is defined in the Rules and Regulations) comply with Regulation G of the
Exchange Act and Item 10 of Regulation S-K under the Act, to the extent
applicable.
(h) Subsequent to the respective dates as of which information is given in
the Registration Statement, the Pricing Prospectus and the Prospectus and prior
to or on the Closing Date and, if later, the Option Closing Date, except as set
forth in or contemplated by the Registration Statement, the Pricing Prospectus
and the Prospectus, (i) there has not been and will not have been any change in
the capitalization of the Company (other than in connection with the exercise of
options to purchase the Company's Common Stock granted pursuant to the Company's
stock option plans from the shares reserved therefor or in connection with the
purchase of shares of the Company's Common Stock pursuant to the Company's
employee stock purchase plan from the shares reserved therefor, each as
described in the Registration Statement and the Pricing Prospectus), or any
Material Adverse Effect
5
arising for any reason whatsoever, (ii) neither the Company nor any of its
Subsidiaries has incurred nor will any of them incur, except in the ordinary
course of business as described in the Pricing Prospectus and the Prospectus,
any material liabilities or obligations, direct or contingent, nor has the
Company or any of its Subsidiaries entered into nor will it enter into, except
in the ordinary course of business as described in the Pricing Prospectus and
the Prospectus, any material transactions other than pursuant to this Agreement
and the transactions referred to herein and (iii) the Company has not and will
not have paid or declared any dividends or other distributions of any kind on
any class of its capital stock.
(i) The Company is not, will not become as a result of the transactions
contemplated hereby, and will not conduct its business in a manner that would
cause it to become, an "investment company" or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended.
(j) Except as set forth in the Registration Statement, the Pricing
Prospectus and the Prospectus, there are no actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company, or any of its Subsidiaries or any of its or their officers in their
capacity as such, nor any basis therefor, before or by any federal or state
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, wherein an unfavorable ruling, decision or finding
might have a Material Adverse Effect.
(k) The Company and each Subsidiary has, and at the Closing Date and, if
later, the Option Closing Date, will have, performed all the obligations
required to be performed by it, and is not, and at the Closing Date, and, if
later, the Option Closing Date, will not be, in default, under any contract or
other instrument to which it is a party or by which its property is bound or
affected, which default might reasonably be expected to have a Material Adverse
Effect. To the knowledge of the Company, no other party under any contract or
other instrument to which it or any of its Subsidiaries is a party is in default
in any respect thereunder, which default might reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is, and
at the Closing Date and, if later, the Option Closing Date, will be in violation
of any provision of its certificate or articles of organization or by-laws or
other organizational documents.
(l) No consent, approval, authorization or order of, or any filing or
declaration with, any court or governmental agency or body is required for the
consummation by the Company of the transactions on its part contemplated herein,
except such as have been obtained under the Act or the Rules and Regulations and
such as may be required under state securities or Blue Sky laws or the by-laws
and rules of the National Association of Securities Dealers, Inc. (the "NASD")
in connection with the purchase and distribution by the Underwriters of the
Shares.
(m) The Company has full corporate power and authority to enter into this
Agreement. This Agreement has been duly authorized, executed and delivered by
the Company. The performance of this Agreement and the consummation of the
transactions contemplated hereby will not result in the creation or imposition
of any lien, charge or encumbrance upon any of the assets of the Company
pursuant to the terms or provisions of, or result in a breach or violation of
any of the terms or provisions of, or conflict with or constitute a default
under, or give any party a right to terminate any of its obligations under, or
result in the acceleration of any obligation under, the certificate or articles
of incorporation or by-laws of the Company or memorandum or articles of
association of any of its Subsidiaries, any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement or other
evidence of indebtedness, lease, contract or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company,
any of its Subsidiaries or any of their properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute, rule or
regulation of any court or other governmental agency or body applicable to the
business or properties of the Company or any of its Subsidiaries.
(n) The Company and its Subsidiaries have good and marketable title to all
properties and assets described in the Pricing Prospectus and the Prospectus as
owned by them, free and clear of all liens, charges, encumbrances or
restrictions, except such as are described in the Pricing Prospectus and the
Prospectus or are not material to the business of the Company or its
Subsidiaries. The Company and its Subsidiaries have valid, subsisting and
enforceable leases for the properties described in the Pricing Prospectus and
the Prospectus as leased by them. The Company and its Subsidiaries own or lease
all such properties as are necessary to their operations as
6
now conducted or as proposed to be conducted, except where the failure to so own
or lease would not have a Material Adverse Effect.
(o) There is no document, contract, permit or instrument, affiliate
transaction or off-balance sheet transaction (including, without limitation, any
"variable interests" in "variable interest entities," as such terms are defined
in Financial Accounting Standards Board Interpretation No. 46) of a character
required to be described in the Registration Statement, the Pricing Prospectus
or the Prospectus or to be filed as an exhibit to the Registration Statement
that is not described or filed as required. All such contracts to which the
Company or any of its Subsidiaries is a party have been duly authorized,
executed and delivered by the Company or such Subsidiary, constitute valid and
binding agreements of the Company or such Subsidiary and are enforceable against
and by the Company or such Subsidiary in accordance with the terms thereof
except to the extent that rights to indemnity or contribution under this
Agreement may be limited by Federal and state securities laws or the public
policy underlying such laws.
(p) No statement, representation, warranty or covenant made by the Company
in this Agreement or made in any certificate or document required by Section 5
of this Agreement to be delivered to the Representatives was or will be, when
made, inaccurate, untrue or incorrect.
(q) The Company has not distributed and will not distribute prior to the
later of (i) the Closing Date or, if later, the Option Closing Date, and (ii)
completion of the distribution of the Shares, any offering material in
connection with the offering and sale of the Shares other than any preliminary
prospectuses, the Prospectus, the Registration Statement, any Issuer Free
Writing Prospectus listed in Schedule III hereto, and other materials, if any,
permitted by the Act and the Rules and Regulations. Neither the Company nor any
of its directors, officers or controlling persons has taken, directly or
indirectly, any action designed, or that might reasonably be expected, to cause
or result, under the Act or otherwise, in, or that has constituted,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(r) No holder of securities of the Company has rights to the registration
of any securities of the Company because of the filing of the Registration
Statement, which rights have not been waived by the holder thereof as of the
date hereof.
(s) The Common Stock is registered under Section 12(b) of the Exchange Act
and the Company has filed an application to list the Shares on the NASDAQ Global
Market ("NGM"), and has received notification that the listing has been
approved, subject to notice of issuance of such Shares.
(t) Except as disclosed in or specifically contemplated by the Pricing
Prospectus and the Prospectus (i) each of the Company and each of its
Subsidiaries owns or has adequate rights to use all trademarks, trade names,
domain names, patents, patent rights, mask works, copyrights, technology,
know-how (including trade secrets and other unpatented or unpatentable
proprietary or confidential information, systems or procedures), service marks,
trade dress rights, and other intellectual property (collectively, "Intellectual
Property") and has such other licenses, approvals and governmental
authorizations, in each case, sufficient to conduct its business as now
conducted and as now proposed to be conducted, and, to the Company's and its
Subsidiaries' knowledge, none of the foregoing Intellectual Property rights
owned or licensed by the Company or any of its Subsidiaries is invalid or
unenforceable, (ii) the Company has no knowledge of any infringement by it or
any of its Subsidiaries of Intellectual Property rights of others, where such
infringement could have a Material Adverse Effect, (iii) the Company is not
aware of any infringement, misappropriation or violation by others of, or
conflict by others with rights of the Company or any of its Subsidiaries with
respect to, any Intellectual Property, (iv) there is no claim being made against
the Company or any of its Subsidiaries or, to the knowledge of the Company and
its Subsidiaries, any employee of the Company or any of its Subsidiaries,
regarding Intellectual Property or other infringement that could have a Material
Adverse Effect, and (v) the Company and its Subsidiaries have not received any
notice of infringement with respect to any patent or any notice challenging the
validity, scope or enforceability of any Intellectual Property owned by or
licensed to the Company or any of its Subsidiaries, in each case the loss of
which patent or Intellectual Property (or loss of rights thereto) would have a
Material Adverse Effect.
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(u) The Company and each of its Subsidiaries has filed all federal, state,
local and foreign income tax returns that have been required to be filed and has
paid all taxes and assessments received by it to the extent that such taxes or
assessments have become due. Neither the Company nor any of its Subsidiaries has
any tax deficiency that has been or, to the knowledge of the Company, might be
asserted or threatened against it that could have a Material Adverse Effect.
(v) The Company or its Subsidiaries owns or possesses all authorizations,
approvals, orders, licenses, registrations, other certificates and permits of
and from all governmental regulatory officials and bodies, necessary to conduct
their respective businesses as contemplated in the Pricing Prospectus and the
Prospectus, except where the failure to own or possess all such authorizations,
approvals, orders, licenses, registrations, other certificates and permits would
not have a Material Adverse Effect. There is no proceeding pending or threatened
(or any basis therefor known to the Company) that may cause any such
authorization, approval, order, license, registration, certificate or permit to
be revoked, withdrawn, cancelled, suspended or not renewed; and the Company and
each of its Subsidiaries is conducting its business in compliance with all laws,
rules and regulations applicable thereto (including, without limitation, all
applicable federal, state and local environmental laws and regulations) except
where such noncompliance would not have a Material Adverse Effect.
(w) The Company and each of its Subsidiaries maintains insurance of the
types and in the amounts generally deemed adequate for its business, including,
but not limited to, insurance covering real and personal property owned or
leased by the Company and its Subsidiaries against theft, damage, destruction,
acts of vandalism and all other risks customarily insured against, all of which
insurance is in full force and effect.
(x) Neither the Company nor any of its Subsidiaries has nor, to the
Company's knowledge, any of its or their respective employees or agents at any
time during the last five years (i) made any unlawful contribution to any
candidate for foreign office, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal or state governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or permitted by the laws of the United
States or any jurisdiction thereof.
(y) The books, records and accounts of the Company and its Subsidiaries
accurately and fairly reflect, in reasonable detail, the transactions in, and
dispositions of, the assets of, and the results of operations of, the Company
and its Subsidiaries. The Company and each of its Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with management's
general or specific authorization, (ii) transactions are recorded as necessary
to permit preparation of the Company's consolidated financial statements in
accordance with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with
management's general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company's internal control over financial reporting is effective and the Company
is not aware of any material weaknesses in its internal control over financial
reporting. Since the date of the latest audited financial statements
incorporated by reference in the Pricing Prospectus and the Prospectus, there
has been no change in the Company's internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.
(z) The Company maintains disclosure controls and procedures (as defined in
Rule 13a-14(c) under the Exchange Act); such disclosure controls and procedures
have been designed to ensure that material information relating to the Company
and its Subsidiaries is made known to the Company's principal executive officer
and principal financial officer by others within those entities; and such
disclosure controls and procedures are effective.
(aa) The Company satisfies the eligibility requirements in existence prior
to October 21, 1992 for the use of a registration statement on Form S-3 for the
offering of the Shares.
(bb) The studies, tests and preclinical and clinical trials conducted by or
on behalf of the Company that are described in the Pricing Prospectus were and,
if still pending, are being conducted in all material respects in accordance
with experimental protocols, procedures and controls pursuant to accepted
professional scientific standards and all applicable local, state and federal
and foreign laws, rules, regulations and guidances; the Company
8
is not aware of any studies, tests or trials the results of which reasonably
call into question the clinical trial results described or referred to in the
Pricing Prospectus when viewed in the context in which such results are
described and the clinical state of development; and the Company has not
received any notices or correspondence from the U.S. Food and Drug
Administration (the "FDA") or any foreign, state or local governmental body
exercising comparable authority requiring the termination, suspension or
material modification of any studies, tests or preclinical or clinical trials
conducted by or on behalf of the Company.
4. Agreements of the Company.
The Company covenants and agrees with the several Underwriters as follows:
(a) The Company will not, either prior to the Applicable Time or thereafter
during such period as the Prospectus is required by law to be delivered in
connection with sales of the Shares by an Underwriter or a dealer, file any
amendment or supplement to the Registration Statement, the Base Prospectus or
the Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the filing thereof
and the Representatives shall not have objected thereto in good faith.
(b) The Company will notify the Representatives promptly, and will confirm
such advice in writing, (i) when any amendment to the Registration Statement has
been filed or becomes effective or any amendment or supplement to the Prospectus
has been filed, (ii) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for additional
information, (iii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or preventing or
suspending the use of the Base Prospectus, any preliminary prospectus, the
Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus or
the initiation of any proceedings for that purpose or the threat thereof, (iv)
of the happening of any event during the period mentioned in the third sentence
of Section 4(e) that in the judgment of the Company makes any statement made in
the Registration Statement or the Prospectus untrue or that requires the making
of any changes in the Registration Statement or the Prospectus in order to make
the statements therein, in the light of the circumstances in which they are
made, not misleading, and (v) of receipt by the Company or any representative or
attorney of the Company of any other communication from the Commission relating
to the Company, the Registration Statement, any preliminary prospectus or the
Prospectus. If at any time the Commission shall issue any order suspending the
effectiveness of the Registration Statement or preventing or suspending the use
of the Base Prospectus, any preliminary prospectus, the Prospectus Supplement,
the Prospectus or any Issuer Free Writing Prospectus, the Company will make
every reasonable effort to obtain the withdrawal of such order at the earliest
possible moment. If the Company has omitted any information from the
Registration Statement pursuant to Rule 430B of the Rules and Regulations, the
Company will comply with the provisions of and make all requisite filings with
the Commission pursuant to said Rule 430B and notify the Representatives
promptly of all such filings. If the Company elects to rely upon Rule 462(b)
under the Act, the Company shall file a registration statement under Rule 462(b)
with the Commission in compliance with Rule 462(b) by 10:00 p.m., Washington,
D.C. time, on the date of this Agreement, and the Company shall at the time of
filing either pay to the Commission the filing fee for such Rule 462(b)
registration statement or give irrevocable instructions for the payment of such
fee pursuant to the Rules and Regulations.
(c) The Company will furnish to each Representative, without charge, one
signed copy of each of the Registration Statement and of any pre- or
post-effective amendment thereto, including financial statements and schedules,
and all exhibits thereto and will furnish to the Representatives, without
charge, for transmittal to each of the other Underwriters, a copy of the
Registration Statement and any pre- or post-effective amendment thereto,
including financial statements and schedules but without exhibits.
(d) The Company will comply with all the provisions of any undertakings
contained in the Registration Statement.
(e) So long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act (including in circumstances where such requirement may be
satisfied pursuant to Rule 172 of the Rules and Regulations), the Company will
deliver to each of the Underwriters, without charge, as many written and
electronic copies of each preliminary prospectus, the Base Prospectus, the
Prospectus Supplement, the Prospectus and each Issuer Free Writing Prospectus as
the Representatives may reasonably request. The Company consents to the use of
each preliminary prospectus, the Base Prospectus, the Prospectus Supplement, the
Prospectus, each Issuer Free
9
Writing Prospectus or any amendment or supplement thereto by the Underwriters
and by all dealers to whom the Shares may be sold, both in connection with the
offering or sale of the Shares and for any period of time thereafter during
which the Prospectus is required by law to be delivered in connection therewith.
If during such period of time any event shall occur that in the judgment of the
Company or counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances under
which it was made, not misleading, or if it is necessary to supplement or amend
the Prospectus to comply with law, the Company will forthwith prepare and duly
file with the Commission an appropriate supplement or amendment thereto, and
will deliver to each of the Underwriters, without charge, such number of copies
of such supplement or amendment to the Prospectus as the Representatives may
reasonably request. The Company will not file any document under the Exchange
Act or the Exchange Act Rules and Regulations before the termination of the
offering of the Shares by the Underwriters, if such document would be deemed to
be incorporated by reference into the Prospectus, that is not approved by the
Representatives after reasonable notice thereof. If at any time following
issuance of an Issuer Free Writing Prospectus there occurred or occurs an event
or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement, the Pricing Prospectus or the Prospectus or included or would include
an untrue statement of a material fact or omitted or would omit to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances prevailing at that subsequent time, not misleading, the
Company will promptly notify Xxxxxxx & Company, LLC and, if requested by Xxxxxxx
& Company, LLC, will promptly amend or supplement, at its own expense, such
Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue
statement or omission; provided however, any amendment or supplement to an
Issuer Free Writing Prospectus that is due to any untrue statements or omissions
made in reliance on and in conformity with information relating to any
Underwriter furnished in writing to the Company by the Representatives
specifically for inclusion in an Issuer Free Writing Prospectus shall be at the
expense of the Underwriters.
(f) Prior to any public offering of the Shares, the Company will cooperate
with the Representatives and counsel to the Underwriters in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives may
request; provided, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to general service of process in any jurisdiction
where it is not now so subject.
(g) The Company will, so long as required under the Rules and Regulations,
furnish to its stockholders as soon as practicable after the end of each fiscal
year an annual report (including a balance sheet and statements of income,
stockholders' equity and cash flow of the Company and its consolidated
Subsidiaries, if any, certified by independent public accountants) and, as soon
as practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), consolidated summary financial information of the
Company and its Subsidiaries, if any, for such quarter in reasonable detail.
(h) The Company will make generally available to holders of its securities
as soon as may be practicable, but in no event later than the Availability Date
(as defined below), an earning statement (which need not be audited but shall be
in reasonable detail) covering a period of 12 months commencing after the
Effective Date that will satisfy the provisions of Section 11(a) of the Act
(including Rule 158 of the Rules and Regulations). For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such Effective
Date, except that if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "Availability Date" means the 90th day after the end of
such fourth fiscal quarter.
(i) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, the Company will pay or reimburse
if paid by the Representatives all costs and expenses incident to the
performance of the obligations of the Company under this Agreement and in
connection with the transactions contemplated hereby, including but not limited
to costs and expenses of or relating to (i) the preparation, printing and filing
of the Registration Statement and exhibits to it, each preliminary prospectus,
the Base Prospectus, the Prospectus Supplement, Pricing Prospectus, Prospectus,
any Issuer Free Writing Prospectus, and any amendment or supplement thereto,
(ii) the preparation and delivery of certificates representing the Shares, (iii)
the printing of this Agreement, the Agreement Among Underwriters, any Selected
Dealer Agreements, any
10
Underwriters' Questionnaires, any Underwriters' Powers of Attorney, and any
invitation letters to prospective Underwriters, (iv) furnishing (including costs
of shipping and mailing) such copies of the Registration Statement, any
preliminary prospectus, the Base Prospectus, the Prospectus Supplement, the
Prospectus, and any Issuer Free Writing Prospectus, and all amendments and
supplements thereto, as may be requested for use in connection with the offering
and sale of the Shares by the Underwriters or by dealers to whom Shares may be
sold, (v) the listing of the Shares on the NGM, (vi) any filings required to be
made by the Underwriters with the NASD, and the fees, disbursements and other
charges of counsel for the Underwriters in connection therewith, (vii) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions designated pursuant to Section
4(f), including the fees, disbursements and other charges of counsel to the
Underwriters in connection therewith, and the preparation and printing of
preliminary, supplemental and final Blue Sky memoranda, (viii) fees,
disbursements and other charges of counsel to the Company (but not those of
counsel for the Underwriters, except as otherwise provided herein) and of the
Accountants, (ix) the transfer agent for the Shares, and (x) any travel expenses
of the Company's officers, directors and employees and any other expenses of the
Company in connection with attending or hosting meetings with prospective
purchasers of the Shares.
(j) The Company will not at any time, directly or indirectly, take any
action designed or that might reasonably be expected to cause or result in, or
that will constitute, stabilization of the price of the shares of Common Stock
to facilitate the sale or resale of any of the Shares.
(k) The Company will apply the net proceeds from the offering and sale of
the Shares to be sold by the Company in the manner set forth in the Pricing
Prospectus and the Prospectus under "Use of Proceeds."
(l) During the period beginning from the date hereof and continuing to and
including the date that is 90 days after the date of the Prospectus, without the
prior written consent of Xxxxxxx & Company, LLC, the Company will not (1) offer,
sell, contract to sell, pledge, grant options, warrants or rights to purchase,
or otherwise dispose of any equity securities of the Company or any other
securities convertible into or exchangeable for its Common Stock or other equity
security (other than (x) pursuant to employee stock option plans or employee
stock purchase plans disclosed in the Prospectus, as such plans may be amended
after the date hereof to increase the number of shares of Common Stock
outstanding under such plans, or (y) pursuant to the conversion of convertible
securities or the exercise of warrants, in the case of (y) outstanding on the
date of this Agreement) 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 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; provided, however, that
if (a) during the last 17 days of such 90-day period the Company issues an
earnings release or material news or a material event relating to the Company
occurs or (b) prior to the expiration of such 90-day period, the Company
announces that it will release earnings results during the 16-day period
beginning on the last day of such 90-day period, the restrictions imposed by
this Section 5(l) shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release or the occurrence of
the material news or material event, unless Xxxxxxx & Company, LLC waives, in
writing, such extension.
(m) During the period of 90 days after the date of the Prospectus, the
Company will not file with the Commission or cause to become effective any
registration statement relating to any securities of the Company without the
prior written consent of Xxxxxxx & Company, LLC, except for any registration
statement on Form S-8 related to the registration of securities issued under the
Company's employee stock option plans or employee stock purchase plans.
(n) The Company will cause each of its "officers" (as such term is defined
in Rule 16a-1(f) of the Exchange Act), directors and certain stockholders
designated by the Representatives to, enter into lock-up agreements with the
Representatives to the effect that they will not, without the prior written
consent of Xxxxxxx & Company, LLC, sell, contract to sell or otherwise dispose
of any shares of Common Stock or rights to acquire such shares according to the
terms set forth in Schedule IV hereto; provided that the Company shall not be
liable for the failure of any stockholder, officer or director, for his, her or
its failure to comply with such lock-up agreement.
5. Further Agreements
11
(a) The Company represents and agrees that, without the prior written
consent of Xxxxxxx & Company, LLC, and each Underwriter represents and agrees
that, without the prior written consent of the Company and Xxxxxxx & Company,
LLC, it has not made and will not make any offer relating to the Shares that
would constitute a "free writing prospectus" as defined in Rule 405 of the Rules
and Regulations. Any such Free Writing Prospectus the use of which has been
consented to by the Company and Xxxxxxx & Company, LLC is listed on Schedule III
and herein called a "Permitted Free Writing Prospectus."
(b) The Company agrees that is has treated and will treat, as the case may
be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus
and that it has complied and will comply, as the case may be, with the
requirements of Rules 164 and 433 of the Rules and Regulations applicable to any
Permitted Free Writing Prospectus, including timely Commission filing where
required, record keeping and legending.
6. Conditions of the Obligations of the Underwriters. The obligations of
each Underwriter hereunder are subject to the following conditions:
(a) All filings required by Rule 424 and Rule 430A of the Rules and
Regulations shall have been made. If the Company has elected to rely upon Rule
462(b), the registration statement filed under Rule 462(b) shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of this Agreement.
(b) (i) No stop order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of the Base Prospectus, any
preliminary prospectus, the Prospectus Supplement, the Prospectus or any Issuer
Free Writing Prospectus shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities, (iv) after the date hereof no amendment or supplement to
the Registration Statement, the Prospectus or the Pricing Prospectus shall have
been filed unless a copy thereof was first submitted to the Representatives and
the Representatives do not object thereto in good faith, and (v) the
Representatives shall have received certificates, dated the Closing Date and, if
later, the Option Closing Date and signed by the Chief Executive Officer and the
Vice President of Finance of the Company (who may, as to proceedings threatened,
rely upon their information and belief), to the effect of clauses (i), (ii) and
(iii) of this paragraph.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, (i) there shall not have been
a material adverse change in the general affairs, business, business prospects,
properties, management, condition (financial or otherwise) or results of
operations of the Company or any of its Subsidiaries, whether or not arising
from transactions in the ordinary course of business, in each case other than as
described in or contemplated by the Registration Statement and the Pricing
Prospectus, and (ii) neither the Company nor any of its Subsidiaries shall have
sustained any material loss or interference with its business or properties from
fire, explosion, flood or other casualty, whether or not covered by insurance,
or from any labor dispute or any court or legislative or other governmental
action, order or decree, which is not described in the Registration Statement
and the Pricing Prospectus, if in the judgment of the Representatives any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares by the Underwriters at the public offering price.
(d) Since the respective dates as of which information is given in the
Registration Statement and the Pricing Prospectus, there shall have been no
litigation or other proceeding instituted against the Company, any of its
Subsidiaries, or any of its or their officers or directors in their capacities
as such, before or by any federal, state or local court, commission, regulatory
body, administrative agency or other governmental body, domestic or foreign, in
which litigation or proceeding an unfavorable ruling, decision or finding would,
in the judgment of the Representatives, have a Material Adverse Effect or if, in
the judgment of the Representatives, any such development makes it impracticable
or inadvisable to consummate the sale and delivery of the Shares by the
Underwriters at the initial public offering price.
12
(e) Each of the representations and warranties of the Company contained
herein shall be true and correct in all respects (in the case of any
representation and warranty containing a materiality or Material Adverse Effect
qualification) or in all material respects at the Closing Date and, with respect
to the Option Shares, at the Option Closing Date, and all covenants and
agreements contained herein to be performed on the part of the Company and all
conditions contained herein to be fulfilled or complied with by the Company at
or prior to the Closing Date and, with respect to the Option Shares, at or prior
to the Option Closing Date, shall have been duly performed, fulfilled or
complied with.
(f) The Representatives shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date, in form
and substance previously agreed to by the Representatives and counsel for the
Underwriters from Xxxxxxx Procter LLP, counsel to the Company.
(g) The Representatives shall have received an opinion, dated the Closing
Date and, with respect to the Option Shares, the Option Closing Date, in form
and substance previously agreed to by the Representatives and counsel for the
Underwriters from Xxxxxxxx Xxxxxxxx LLP, intellectual property counsel to the
Company.
(h) The Representatives shall have received an opinion, dated the Closing
Date and the Option Closing Date, from Xxxxxx, Hall & Xxxxxxx LLP, counsel to
the Underwriters, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to the
Representatives.
(i) Concurrently with the execution and delivery of this Agreement, the
Accountants shall have furnished to the Representatives a letter, dated the date
of its delivery, addressed to the Representatives and in form and substance
satisfactory to the Representatives, confirming that they are independent
accountants with respect to the Company and its Subsidiaries as required by the
Act and the Exchange Act and the Rules and Regulations and with respect to
certain financial and other statistical and numerical information contained or
incorporated by reference in the Registration Statement. At the Closing Date
and, as to the Option Shares, the Option Closing Date, the Accountants shall
have furnished to the Representatives a letter, dated the date of its delivery,
which shall confirm, on the basis of a review in accordance with the procedures
set forth in the letter from the Accountants, that nothing has come to their
attention during the period from the date of the letter referred to in the prior
sentence to a date (specified in the letter) not more than three days prior to
the Closing Date and the Option Closing Date, as the case may be, which would
require any change in their letter dated the date hereof if it were required to
be dated and delivered at the Closing Date and the Option Closing Date.
(j) At the Closing Date and, as to the Option Shares, the Option Closing
Date, there shall be furnished to the Representatives a certificate, dated the
date of its delivery, signed by each of the Chief Executive Officer and the Vice
President of Finance of the Company, in form and substance satisfactory to the
Representatives, to the effect that:
(i) Each signer of such certificate has carefully examined the
Registration Statement, the Prospectus and the General Disclosure Package
(including any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Pricing Prospectus and the Prospectus)
and (A) as of the date of such certificate, such documents are true and
correct in all material respects and do not omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein not untrue or misleading and (B) since the Effective Date no event
has occurred as a result of which it is necessary to amend or supplement
the Prospectus in order to make the statements therein not untrue or
misleading.
(ii) Each of the representations and warranties of the Company
contained in this Agreement were, when originally made, and are, at the
time such certificate is delivered, true and correct in all respects (in
the case of any representation and warranty containing a materiality or
Material Adverse Effect qualification) or in all material respects (in the
case of any representation and warranty without any materiality or Material
Adverse Effect qualification).
(iii) Each of the covenants required to be performed by the Company
herein on or prior to the date of such certificate has been duly, timely
and fully performed and each
13
condition herein required to be satisfied or fulfilled on or prior to the
date of such certificate has been duly, timely and fully satisfied or
fulfilled.
(k) On or prior to the Closing Date, the Representatives shall have
received the executed agreements referred to in Section 4(n).
(l) The Shares shall be qualified for sale in such jurisdictions as the
Representatives may reasonably request and each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
or the Option Closing Date.
(m) Prior to the Closing Date, the Shares shall have been duly authorized
for listing on the NGM upon official notice of issuance.
(n) The Company shall have furnished to the Representatives such
certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus, as to the accuracy at the Closing
Date and the Option Closing Date of the representations and warranties of the
Company herein, as to the performance by the Company of its obligations
hereunder, or as to the fulfillment of the conditions concurrent and precedent
to the obligations hereunder of the Representatives.
7. Indemnification.
(a) The Company will indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person,
if any, who controls each Underwriter within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, from and against any and all losses,
claims, liabilities, expenses and damages (including any and all investigative,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Act, the Exchange Act
or other federal or state statutory law or regulation, at common law or
otherwise, insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement, any preliminary
prospectus, the Base Prospectus, the Pricing Prospectus, the Prospectus or any
amendment or supplement thereto or any Issuer Free Writing Prospectus or any
"issuer information" filed or required to be filed pursuant to Rule 433(d) of
the Rules and Regulations, or the omission or alleged omission to state in such
document a material fact required to be stated in it or necessary to make the
statements in it not misleading in the light of the circumstances in which they
were made, or arise out of or are based in whole or in part on any inaccuracy in
the representations and warranties of the Company contained herein or any
failure of the Company to perform its obligations hereunder or under law in
connection with the transactions contemplated hereby; provided, however, that
the Company will not be liable to the extent that such loss, claim, liability,
expense or damage arises from the sale of the Shares in the public offering to
any person by an Underwriter and is based on an untrue statement or omission or
alleged untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives, on behalf of any Underwriter, expressly for inclusion in
the Registration Statement, any preliminary prospectus, the Base Prospectus, the
Pricing Prospectus, the Prospectus or any Issuer Free Writing Prospectus. The
Company and the Underwriters acknowledge that the public offering price and the
statements set forth in the third, eighth, ninth, tenth and eleventh paragraphs
under the heading "Underwriting" in the Pricing Prospectus and the Prospectus
constitute the only information relating to any Underwriter furnished in writing
to the Company by the Representatives on behalf of the Underwriters expressly
for inclusion in the Registration Statement, any preliminary prospectus, the
Base Prospectus, the Pricing Prospectus, the Prospectus or any Issuer Free
Writing Prospectus. This indemnity agreement will be in addition to any
liability that the Company might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Company, each
director of the Company, each officer of the Company who signs the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each Underwriter, as set forth in
Section 7(a), but only insofar as losses, claims, liabilities, expenses or
damages arise out of or are based on any untrue statement or omission or alleged
14
untrue statement or omission made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
the Representatives, on behalf of such Underwriter, expressly for use in the
Registration Statement, any preliminary prospectus, the Base Prospectus, the
Pricing Prospectus, the Prospectus or any Issuer Free Writing Prospectus. The
Company acknowledges that the public offering price and the statements set forth
in the third, eighth, ninth, tenth and eleventh paragraphs under the heading
"Underwriting" in the Pricing Prospectus and the Prospectus constitute the only
information relating to any Underwriter furnished in writing to the Company by
the Representatives on behalf of the Underwriters expressly for inclusion in the
Registration Statement, any preliminary prospectus, the Base Prospectus, the
Pricing Prospectus, the Prospectus or any Issuer Free Writing Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section 7 shall, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section 7, notify each such
indemnifying party in writing of the commencement of such action, enclosing with
such notice a copy of all papers served, but the omission to so notify such
indemnifying party will not relieve it from any liability that it may have to
any indemnified party under the foregoing provisions of this Section 7 unless,
and only to the extent that, such omission results in the loss of rights or
defenses by the indemnifying party. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its commencement,
the indemnifying party will be entitled to participate in and, to the extent
that it elects by delivering written notice to the indemnified party promptly
after receiving notice of the commencement of the action from the indemnified
party, jointly with any other indemnifying party similarly notified, to assume
the defense of the action, 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, the indemnifying party will not be
liable to the indemnified party for any legal or other expenses except as
provided below and except for the reasonable costs of investigation incurred by
the indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (ii) the indemnified
party has concluded (based on advice of counsel) that there may be legal
defenses available to it or other indemnified parties that are different from or
in addition to those available to the indemnifying party, (iii) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party), or (iv) the indemnifying party has not in
fact employed counsel reasonably satisfactory to the indemnified party to assume
the defense of such action within a reasonable time after receiving notice of
the commencement of the action, in each of which cases the reasonable fees,
disbursements and other charges of counsel will be at the expense of the
indemnifying party or parties. It is understood that the indemnifying party or
parties shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one separate firm admitted to practice in such
jurisdiction at any one time for all such indemnified party or parties. All such
fees, disbursements and other charges will be reimbursed by the indemnifying
party promptly as they are incurred upon receipt of reasonably detailed
invoices. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action in
respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party unless such
settlement (i) includes an unconditional release of such indemnified party from
all liability on any claims that are the subject matter of such action and (ii)
does not include a statement as to, or an admission of, fault, culpability or a
failure to act by or on behalf of an indemnified party. An indemnifying party
will not be liable for any settlement of any action or claim effected without
its written consent (which consent will not be unreasonably withheld or
delayed).
(d) If the indemnification provided for in this Section 7 is applicable in
accordance with its terms but for any reason is held to be unavailable to or
insufficient to hold harmless an indemnified party under paragraphs (a), (b) and
(c) of this Section 7 in respect of any losses, claims, liabilities, expenses
and damages referred to therein, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable (including any investigative, legal and other expenses reasonably
incurred in connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claim asserted, but after deducting any contribution
received by the Company from persons other than the Underwriters, such as
persons who control the Company within the meaning of the Act, officers of the
Company who signed the Registration Statement and directors of the Company, who
also may be liable for contribution) by such indemnified party as a result of
such
15
losses, claims, liabilities, expenses and damages 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 hand. The relative benefits received by
the Company, on the one hand, and the Underwriters, on the other hand, shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. If, but only
if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution shall be made in such proportion
as is appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Underwriters, on the other hand, with respect to the statements or
omissions that resulted in such loss, claim, liability, expense or damage, or
action in respect thereof, as well as any other relevant equitable
considerations with respect to such offering. Such 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 Representatives on behalf of 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 7(d) 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 that 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, liability, expense or
damage, or action in respect thereof, referred to above in this Section 7(d)
shall be deemed to include, for purposes of this Section 7(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 7(d), no Underwriter shall be required to contribute
any amount in excess of the underwriting discounts received by it and no person
found guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) will 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 7(d) are several in proportion to their
respective underwriting obligations and not joint. For purposes of this Section
7(d), any person who controls a party to this Agreement within the meaning of
the Act will have the same rights to contribution as that party, and each
officer of the Company who signed the Registration Statement will have the same
rights to contribution as the Company, subject in each case to the provisions
hereof. Any party entitled to contribution, promptly after receipt of notice of
commencement of any action against any such party in respect of which a claim
for contribution may be made under this Section 7(d), will notify any such party
or parties from whom contribution may be sought, but the omission so to notify
will not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have under this Section 7(d) unless, and
only to the extent that, such omission results in the loss of rights or defenses
by the party or parties from whom contributions may be sought. No party will be
liable for contribution with respect to any action or claim settled without its
written consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any investigation made by or on behalf of the Underwriters, (ii) acceptance of
any of the Shares and payment therefor, or (iii) any termination of this
Agreement.
8. Reimbursement of Certain Expenses. In addition to its other obligations
under Section 7(a) of this Agreement, the Company hereby agrees to reimburse the
Underwriters on a quarterly basis for all reasonable legal and other expenses
incurred in connection with investigating or defending any claim, action,
investigation, inquiry or other proceeding arising out of or based upon, in
whole or in part, any statement or omission or alleged statement or omission, or
any inaccuracy in the representations and warranties of the Company contained
herein or failure of the Company to perform its or their respective obligations
hereunder or under law, all as described in Section 7(a), notwithstanding the
absence of a judicial determination as to the propriety and enforceability of
the obligations under this Section 8 and the possibility that such payment might
later be held to be improper; provided, however, that, to the extent any such
payment is ultimately held to be improper, the persons receiving such payments
shall promptly refund them.
9. Termination. The obligations of the several Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option Shares, on or prior to the Option Closing Date), by
notice to the Company from the Representatives, without liability on the part of
any Underwriter to the
16
Company if, prior to delivery and payment for the Firm Shares or Option Shares,
as the case may be, in the sole judgment of the Representatives, (i) trading in
any of the equity securities of the Company shall have been suspended or limited
by the Commission or by The NASDAQ Stock Market, (ii) trading in securities
generally on The NASDAQ Stock Market shall have been suspended or limited or
minimum or maximum prices shall have been generally established on such
exchange, or additional material governmental restrictions, not in force on the
date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange, by order of the Commission or any court or other
governmental authority, (iii) a general banking moratorium shall have been
declared by either federal, New York State or Commonwealth of Massachusetts
authorities or any material disruption of the securities settlement or clearance
services in the United States shall have occurred, or (iv) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States, any outbreak
or material escalation of hostilities involving the United States, a declaration
of a national emergency or war by the United States, a terrorist act, or other
calamity or crisis, either within or outside the United States, shall have
occurred, the effect of which is such as to make it, in the sole judgment of the
Representatives, impracticable or inadvisable to proceed with completion of the
public offering or the delivery of and payment for the Shares.
If this Agreement is terminated pursuant to Section 9 hereof, the Company
shall not be under any liability to any Underwriter except as provided in
Sections 4(i), 7 and 8 hereof; but, if for any other reason the purchase of the
Shares by the Underwriters is not consummated or if for any reason the Company
shall be unable to perform its obligations hereunder, the Company will reimburse
the Underwriters for all out-of-pocket expenses (including the reasonable fees,
disbursements and other charges of counsel to the Underwriters) incurred by the
Underwriters in connection with the offering of the Shares; provided, however,
that the Company shall have no obligation to reimburse such expenses if this
Agreement is terminated pursuant to Section 10 by reason of a default by one or
more of the Underwriters.
10. Substitution of Underwriters. If any one or more of the Underwriters
shall fail or refuse to purchase any of the Firm Shares that it or they have
agreed to purchase hereunder, and the aggregate number of Firm Shares that such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Firm Shares, the other
Underwriters shall be obligated, severally and not jointly, to purchase the Firm
Shares that such defaulting Underwriter or Underwriters agreed but failed or
refused to purchase, in the proportions which the number of Firm Shares that
they have respectively agreed to purchase pursuant to Section 1 bears to the
aggregate number of Firm Shares which all such non-defaulting Underwriters have
so agreed to purchase, or in such other proportions as the Representatives may
specify; provided that in no event shall the maximum number of Firm Shares that
any Underwriter has become obligated to purchase pursuant to Section 1 be
increased pursuant to this Section 10 by more than one-ninth of such number of
Firm Shares without the prior written consent of such Underwriter. In any such
case either the Representatives or the Company shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. If any Underwriter or
Underwriters shall fail or refuse to purchase any Firm Shares that it or they
agreed to purchase hereunder and the aggregate number of Firm Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
exceeds one-tenth of the aggregate number of the Firm Shares and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Firm Shares are not made within 48 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Underwriter or the
Company for the purchase or sale of any Shares under this Agreement. Any action
taken pursuant to this Section 10 shall not relieve any defaulting Underwriter
from liability in respect of any default of such Underwriter under this
Agreement.
11. No Fiduciary Relationship. The Company acknowledges and agrees that (i)
the purchase and sale of the Shares pursuant to this Agreement (including the
determination of the terms of the offering of the Shares) is an arm's-length
commercial transaction between the Company and the several Underwriters, (ii) in
connection therewith and with the process leading to such transaction, each
Underwriter is acting solely as a principal and not the agent or fiduciary of
the Company, (iii) no Underwriter has assumed an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such Underwriter
has advised or is currently advising the Company on other matters) or any other
obligation to the Company except the obligations expressly set forth in this
Agreement, (iv) the Underwriters and their respective affiliates may be engaged
in a broad range of transactions that involve interests that differ from
17
those of the Company and have no obligation to disclose or account to the
Company for any of such differing interests, and (v) the Company has consulted
its own legal, tax, accounting and financial advisors to the extent it deemed
appropriate. The Company hereby agrees that it will not claim that the
Underwriters, or any of them, have rendered advisory services of any nature or
respect, or owe a fiduciary or similar duty to the Company, in connection with
such transaction or the process leading thereto.
12. Miscellaneous. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, 0000 Xxxxx
Xxxxx Xxxxx, Xxx Xxxxx, XX 00000, Attention: Chief Executive Officer, with a
copy to Xxxxxxx Procter LLP, 00 Xxxxx Xxxxxx, Xxxxxxxx Xxxxx, Xxxxxx, XX 00000,
Attention: Xxxxxxxx X. Xxxxx, Esq., or (b) if to the Underwriters, to the
Representatives at the offices of Xxxxxxx & Company, LLC, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance Department, with a copy to
Xxxx Xxxxxxx, Esq., Xxxxxx, Hall & Xxxxxxx LLP, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx,
XX 00000. Any such notice shall be effective only upon receipt. Any notice under
Section 9 or 10 may be made by telecopier or telephone, but if so made shall be
subsequently confirmed in writing.
This Agreement has been and is made solely for the benefit of the several
Underwriters, the Company and the controlling persons, directors and officers
referred to in Section 7, and their respective successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" as used in this Agreement shall not
include a purchaser, as such purchaser, of Shares from any of the several
Underwriters.
Any action required or permitted to be made by the Representatives under
this Agreement may be taken by them jointly or by Xxxxxxx & Company, LLC.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
entirely within such State.
This Agreement may be signed in two or more counterparts with the same
effect as if the signatures thereto and hereto were upon the same instrument.
In case any provision in this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
EACH OF THE COMPANY AND THE UNDERWRITERS HEREBY WAIVES ANY RIGHT IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON OR ARISING OUT OF
THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
18
Please confirm that the foregoing correctly sets forth the agreement among
the Company and the several Underwriters.
Very truly yours,
La JOLLA PHARMACEUTICAL COMPANY
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------------------
Title: President and Chief Executive Officer
Confirmed as of the date first
above mentioned:
XXXXXXX & COMPANY, LLC
X.X. XXXXXXX & SONS, INC.
Acting on behalf of themselves
and as the Representatives of
the other several Underwriters
named in Schedule I hereto.
By: XXXXXXX & COMPANY, LLC
By: /s/ Xxxx Xxxxxxxx
------------------------
Title: Managing Director
SCHEDULE I
UNDERWRITERS
Number of Firm
Underwriters Shares to be Purchased
------------ ----------------------
Xxxxxxx & Company, LLC ................................ 3,480,000
X.X. Xxxxxxx & Sons, Inc............................... 2,320,000
---------
Total ........................................ 5,800.000
=========
SCHEDULE II
Essex Woodlands Health Ventures Fund VI, LP, Xxxxxxx Healthcare V, LP, Xxxxxxxxx
Xxxxxxxx Xxxxxxxxxxx and Domain Public Equity Partners, L.P.
SCHEDULE III
Issuer General Use Free Writing Prospectuses:
Permitted Free Writing Prospectuses:
Additional Documents Incorporated by Reference:
SCHEDULE IV
FORM OF LOCK-UP AGREEMENT
LA JOLLA PHARMACEUTICAL COMPANY
Lock-Up Agreement
March ___, 2007
Xxxxxxx & Company, LLC
Canaccord Xxxxx Inc.
JMP Securities, LLC
X.X. Xxxxxxx & Sons, Inc.
c/o Needham & Company, LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: La Jolla Pharmaceutical Company--Lock-Up Agreement
Ladies and Gentlemen:
The undersigned is a holder of securities of La Jolla Pharmaceutical
Company, a Delaware corporation (the "Company"), and wishes to facilitate the
public offering of shares of the Common Stock of the Company, $0.01 par value
per share (the "Common Stock"), pursuant to a registration statement on Form S-3
(the "Offering") to be filed with the Securities and Exchange Commission (the
"SEC"). The undersigned recognizes that such Offering will be of benefit to the
undersigned.
In consideration of the foregoing and in order to induce you to act as
underwriters in connection with the Offering, the undersigned hereby agrees that
he or she will not, without the prior written approval of Xxxxxxx & Company,
LLC, acting on its own behalf and/or on behalf of other representatives of the
underwriters, directly or indirectly, sell, contract to sell, make any short
sale, pledge, or otherwise dispose of, or enter into any hedging transaction
that is likely to result in a transfer of, any shares of Common Stock, options
to acquire shares of Common Stock or securities exchangeable for or convertible
into shares of Common Stock of the Company which he or she may beneficially own
(as defined in Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), for a period commencing as of the date hereof and
ending on the date which is ninety (90) days after the date of the final
Prospectus relating to the Offering (the "Lock-up Period"). The undersigned
confirms that he or she understands that the underwriters and the Company will
rely upon the representations and agreements set forth in this Agreement in
proceeding with the Offering. The foregoing two sentences shall not apply to (a)
transfers by gift upon the condition that the donee shall agree in writing to be
bound by the restriction in the same manner as it applies to the donor, (b)
transfers to a trust for the direct or indirect benefit of the undersigned or
any member of the undersigned's family, provided that any such transferee shall
agree in writing to be bound by the restriction in the same manner as it applies
to the transferor, (c) transfers upon the death of the undersigned to his or her
executors, administrators, testamentary trustees, legatees or beneficiaries, it
being agreed that any such transferee shall be bound by the restriction in the
same manner as it applies to the transferor, and (d) sales of Common Stock made
under a preplanned trading program that satisfies the requirements of Rule
10b5-1 of the Exchange Act and that is in effect as of the date of this letter.
The undersigned further confirms that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns. The undersigned agrees and consents to
the entry of stop transfer instructions with the Company's transfer agent
against the transfer of securities held by the undersigned except in compliance
with this Agreement.
This Agreement shall terminate as of the earlier of: (i) September 30, 2007
if the Offering has not been consummated by such date, (ii) the date that the
registration statement on Form S-3 relating to
the Offering shall have been withdrawn from the SEC, or (iii) the Company
notifying you in writing that it does not intend to proceed to consummate the
Offering.
Notwithstanding the foregoing, for the purpose of allowing the underwriters
to comply with NASD Rule 2711(f)(4), if (1) during the last 17 days of the
Lock-up Period, the Company releases earnings results or publicly announces
other material news or a material event relating to the Company occurs or (2)
prior to the expiration of the Lock-up Period, the Company announces that it
will release earnings results during the 16-day period beginning on the last day
of the Lock-up Period, then, in each case, the Lock-up Period will be extended
until the expiration of the 18-day period beginning on the date of the earnings
results or the public announcement regarding the material news or the occurrence
of the material event, as applicable, unless Xxxxxxx & Company, LLC waives, in
writing, such extension.
[the remainder of this page is intentionally left blank]
This Agreement shall be binding on the undersigned and his, her or its
respective successors, heirs, personal representatives and assigns.
-----------------------------------
Typed or Printed Name
-----------------------------------
Signature or Authorized Signature
on behalf of the above Person
