14,285,715 Firm Shares 2,142,857 Additional Shares GTx, INC. Common Stock UNDERWRITING AGREEMENT
Exhibit 1.1
Execution Copy
14,285,715 Firm Shares
2,142,857 Additional Shares
GTx, INC.
Common Stock
October 27, 2010
Lazard Capital Markets LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. Introduction. GTx, Inc., a Delaware corporation (the “Company”), proposes to
issue and sell to Lazard Capital Markets LLC (“LCM” or the “Underwriter”), pursuant to the terms
and conditions of this Underwriting Agreement (this “Agreement”) an aggregate of 14,285,715 shares
of common stock, $0.001 par value per share (the “Common Stock”) of the Company (the “Firm Shares).
The Company hereby confirms its agreement with LCM to act as the Underwriter in accordance with
the terms and conditions hereof.
The Company also proposes to issue and sell to the Underwriter not more than an additional
2,142,857 shares of its Common Stock (the “Additional Shares”) if and to the extent that you, as
Underwriter, shall have determined to exercise your right to purchase such shares of Common Stock
granted to you. The Firm Shares and the Additional Shares are hereinafter collectively referred to
as the “Shares.” The offering and sale of the Firms Shares and the Additional Shares by the
Company to the Underwriter is hereinafter collectively referred to as the “Offering.”
The Underwriter may exercise its over-allotment purchase right in whole or from time to time
in part by giving written notice not later than thirty (30) days after the date of this Agreement.
Any exercise notice shall specify the number of Additional Shares to be purchased by the
Underwriter and the date on which such shares are to be purchased. If any Additional Shares are to
be purchased, the number of Additional Shares to be purchased by the Underwriter shall be the
number of Additional Shares which bears the same ratio to the aggregate number of Additional Shares
being purchased as the number of Firm Shares purchased by the Underwriter bears to the aggregate
number of Firm Shares purchased from the Company by the Underwriter, subject, however, to such
adjustments to eliminate any fractional Shares as the Underwriter in its sole discretion shall
make. Each purchase date must be at least three business days after the written notice is given
and may not be earlier than the Closing Date for the Firm Shares nor later than ten business days
after the date of such notice. Additional Shares may be purchased hereby solely for the purpose of
covering over-allotments made in connection with the offering of the
Firm Shares. On each day, if any, that Additional Shares are to be purchased (an “Option
Closing Date”).
2. Delivery and Payment. On the basis of the representations, warranties and
agreements of the Company herein contained, and subject to the terms and conditions of this
Agreement:
2.1 The Company agrees to issue and sell and the Underwriter agrees to purchase from the
Company an aggregate of 14,285,715 Firm Shares at a purchase price of $2.80 per share of
Common Stock (the “Purchase Price”). The Company has been advised by you that you propose
to make a public offering of the Shares as soon after this Agreement has become effective as
in your judgment is advisable. The Company is further advised by you that the Shares are to
be offered to the public initially at a price of $2.66 per share.
2.2 Payment of the Purchase Price for, and delivery of, the Firm Shares shall be made at the
time and date of closing and delivery of the documents required to be delivered to the
Underwriter pursuant to Sections 4 and 6 hereof shall be at 10:00 A.M., New York time, on
November 1, 2010 (the “Closing Date”) at the office of Xxxxxx LLP, 0000 Xxxxxxx Xxxxxx, Xxxx
Xxxx, XX 00000 or at such other time and date as the Underwriter and the Company determine
pursuant to Rule 15c6-1(a) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), the Company shall deliver the Firm Shares, which shall be registered in the
name or names and shall be in such denominations as the Underwriter may request at least one
(1) business day before the Closing Date, to the Underwriter, which delivery shall be made
through the facilities of the Depository Trust Company’s DWAC delivery system.
2.3 Payment of the Purchase Price for, and delivery of, any Additional Shares shall be made
at the Option Closing Date or at such other time and date as the Underwriter and the Company
determine pursuant to Rule 15c6-1(a) under the Exchange Act, the Company shall deliver the
Additional Shares, which shall be registered in the name or names and shall be in such
denominations as the Underwriter may request at least one (1) business day before the Option
Closing Date, to the Underwriter, which delivery shall be made through the facilities of the
Depository Trust Company’s DWAC system. The Option Closing Date may be simultaneous with,
but not earlier than, the Closing Date; and in the event that such time and date are
simultaneous with the Closing Date, the term “Closing Date” shall refer to the time and date
of delivery of the Firm Shares and Additional Shares.
2.4 No Shares which the Company has agreed to sell pursuant to this Agreement shall be
deemed to have been purchased and paid for, or sold by the Company, until such Shares shall
have been delivered to the Underwriter thereof against payment by the Underwriter. If the
Company shall default in its obligations to deliver any Shares to the Underwriter, the
Company shall indemnify and hold the Underwriter harmless against any loss, claim, damage or
expense arising from or as a result of such default by the Company in accordance with the
procedures set forth in Section 7(c) herein.
3. Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with, the Underwriter that:
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(a) The Company has prepared and filed in conformity with the requirements of the Securities Act of
1933, as amended (the “Securities Act”), and published rules and regulations thereunder (the “Rules
and Regulations”) adopted by the Securities and Exchange Commission (the “Commission”) a “shelf”
Registration Statement (as hereinafter defined) on Form S-3 (File No. 333-148321), which became
effective as of January 17, 2008 (the “Effective Date”), including a base prospectus relating to
the Shares (the “Base Prospectus”), and such amendments and supplements thereto as may have been
required up to the date of this Agreement. The term “Registration Statement” as used in this
Agreement means the registration statement (including all exhibits, financial schedules and all
documents and information deemed to be a part of the Registration Statement pursuant to Rule 430A
of the Rules and Regulations), as amended and/or supplemented to the date of this Agreement,
including the Base Prospectus. The Registration Statement is effective under the Securities Act and
no stop order preventing or suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the Prospectus has been issued by the Commission and no
proceedings for that purpose have been instituted or, to the best knowledge of the Company, are
threatened by the Commission. The Company, if required by the Rules and Regulations of the
Commission, will file the Prospectus (as defined below), with the Commission pursuant to Rule
424(b) of the Rules and Regulations. The term “Prospectus” as used in this Agreement means the
Prospectus, in the form in which it is to be filed with the Commission pursuant to Rule 424(b) of
the Rules and Regulations, or, if the Prospectus is not to be filed with the Commission pursuant to
Rule 424(b), the Prospectus in the form included as part of the Registration Statement as of the
Effective Date, except that if any revised prospectus or prospectus supplement shall be provided to
the Underwriter by the Company for use in connection with the offering and sale of the Shares which
differs from the Prospectus (whether or not such revised prospectus or prospectus supplement is
required to be filed by the Company pursuant to Rule 424(b) of the Rules and Regulations), the term
“Prospectus” shall refer to such revised prospectus or prospectus supplement, as the case may be,
from and after the time it is first provided to the Underwriter for such use (or in the form first
made available to the Underwriter by the Company to meet requests of prospective purchasers
pursuant to Rule 173 under the Securities Act). Any preliminary prospectus or prospectus subject to
completion included in the Registration Statement or filed with the Commission pursuant to Rule 424
of the Rules and Regulations is hereafter called a “Preliminary Prospectus.” Any reference herein
to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant to Item 12 of Form
S-3 which were filed under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), on
or before the last to occur of the Effective Date, the date of the Preliminary Prospectus, or the
date of the Prospectus, and any reference herein to the terms “amend,” “amendment,” or “supplement”
with respect to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include (i) the filing of any document under the Exchange Act after the
Effective Date, the date of such Preliminary Prospectus or the date of the Prospectus, as the case
may be, which is incorporated by reference and (ii) any such document so filed.
(b) As of the Applicable Time (as defined below), and as of the Closing Date, and any
Option Closing Date, neither (i) any General Use Free Writing Prospectus (as defined below) issued
at or prior to the Applicable Time, the Pricing Prospectus (as defined below) and the information
included on Schedule A hereto, all considered together (collectively, the
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“General Disclosure Package”), (ii) any individual Limited Use Free Writing Prospectus (as defined
below) issued at or prior to the Applicable Time, nor (iii) the bona fide electronic road show (as
defined in Rule 433(h)(5) of the Rules and Regulations), if any, that has been made available
without restriction to any person, when considered together with the General Disclosure Package,
included or will include, any untrue statement of a material fact or omitted or as of the Closing
Date and any Option Closing Date will omit, to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as to information
contained in or omitted from any Issuer Free Writing Prospectus or the Pricing Prospectus in
reliance upon, and in conformity with, written information furnished to the Company by the
Underwriter specifically for inclusion therein, which information the parties hereto agree is
limited to the Underwriter’s Information (as defined in Section 17). As used in this
paragraph (b) and elsewhere in this Agreement:
“Applicable Time” means 8:00 A.M., New York time, on the date of this Agreement.
“General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
identified on Schedule B to this Agreement.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 of the Rules and Regulations 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) of the Rules and Regulations.
“Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not a
General Use Free Writing Prospectus.
“Pricing Prospectus” means the Preliminary Prospectus, if any, and the Base Prospectus, each
as amended and supplemented immediately prior to the Applicable Time, including any document
incorporated by reference therein, any Issuer Free Writing Prospectus and any prospectus
supplement deemed to be a part thereof.
(c) No order preventing or suspending the use of any Preliminary Prospectus, any Issuer Free
Writing Prospectus or the Prospectus relating to the Offering has been issued by the Commission,
and no proceeding for that purpose or pursuant to Section 8A of the Securities Act has been
instituted or, to the best knowledge of the Company, threatened by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the
requirements of the Securities Act and the Rules and Regulations, and unless otherwise corrected,
modified or supplemented did not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading; provided, however, that the
Company makes no representations or warranties as to information contained in or omitted from any
Preliminary Prospectus, in reliance upon, and in conformity with, written information furnished to
the Company by the Underwriter specifically for inclusion therein, which information the parties
hereto agree is limited to the Underwriter’s Information (as defined in Section 17).
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(d) At the respective times the Registration Statement and any amendments thereto became or become
effective, at the date of this Agreement and at the Closing Date and any Option Closing Date, the
Registration Statement and any amendments thereto conformed and will conform in all material
respects to the requirements of the Securities Act and the Rules and Regulations and did not and
will not contain any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not misleading; and the
Prospectus and any amendments or supplements thereto, at the time the Prospectus or any amendment
or supplement thereto was issued and at the Closing Date and any Option Closing Date, conformed and
will conform in all material respects to the requirements of the Securities Act and the Rules and
Regulations and did not and will not contain an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however, that the foregoing
representations and warranties in this paragraph (d) shall not apply to information contained in or
omitted from the Registration Statement or the Prospectus, or any amendment or supplement thereto,
in reliance upon, and in conformity with, written information furnished to the Company by the
Underwriter specifically for inclusion therein, which information the parties hereto agree is
limited to the Underwriter’s Information (as defined in Section 17).
(e) Each Issuer Free Writing Prospectus, if any, 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 Company notified or notifies the Underwriter as described in Section 4(e), did not,
does not and will not include any information that conflicted, conflicts or will conflict with the
information contained in the Registration Statement, Pricing Prospectus or the Prospectus,
including any document incorporated by reference therein and any prospectus supplement deemed to be
a part thereof that has not been superseded or modified, or includes an untrue statement of a
material fact or omitted or would omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the circumstances under which
they were made, not misleading. The foregoing sentence does not apply to statements in or omissions
from any Issuer Free Writing Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by the Underwriter specifically for inclusion therein, which
information the parties hereto agree is limited to the Underwriter’s Information (as defined in
Section 17).
(f) The documents incorporated by reference in the Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and none of such documents contained any untrue statement
of a material fact or omitted to state any material fact required to be stated therein or necessary
to make the statements therein in light of the circumstances under which they were made not
misleading; and any further documents so filed and incorporated by reference in the Prospectus,
when such documents become effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will not contain any
untrue statement of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein in light of the circumstances under which they
were made not misleading.
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(g) At the time of filing the Registration Statement and any post-effective amendments thereto, and
at the date hereof, the Company was not, and the Company currently is not, an “ineligible issuer,”
as defined in Rule 405 of the Rules and Regulations. The Company has not, directly or indirectly,
distributed and will not distribute any offering material in connection with the Offering other
than any Preliminary Prospectus, the Prospectus and other materials, if any, permitted under the
Securities Act and consistent with Section 4(b) below. The Company will file with the
Commission all Issuer Free Writing Prospectuses (other than a “road show,” as described in Rule
433(d)(8) of the Rules and Regulations), if any, in the time and manner required under Rules
163(b)(2) and 433(d) of the Rules and Regulations.
(h) The Company has the full right, power and authority to enter into this Agreement and to perform
and to discharge its obligations hereunder; and this Agreement has been duly authorized, executed
and delivered by the Company, and constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms.
(i) Neither the Company nor, to the Company’s knowledge, any of the Company’s officers, directors
or affiliates has taken or will take, directly or indirectly, any action designed or intended to
stabilize or manipulate the price of any security of the Company, or which caused or resulted in,
or which might in the future reasonably be expected to cause or result in, stabilization or
manipulation of the price of any security of the Company.
(j) The Company is subject to and in compliance in all material respects with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act. The Common Stock is registered
pursuant to Section 12(b) of the Exchange Act and is listed on the Nasdaq Global Market (“Nasdaq
GM”), and the Company has taken no action designed to, or reasonably likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the Nasdaq GM, nor has the Company received any notification that the Commission or the
Financial Industry Regulatory Authority, Inc. (“FINRA”) is contemplating terminating such
registration or listing. No consent, approval, authorization or order of, or filing, notification
or registration with, the Nasdaq GM is required for the listing and trading of the Shares on the
Nasdaq GM.
(k) The Company has not taken any action in the public offering of the Shares by the Underwriter
that would require approval of the shareholders of the Company under the rules and regulations of
Nasdaq (including Rule 5635 of the Nasdaq Marketplace Rules) in order for the Company to issue and
deliver to the Underwriter the Shares; and the Company is in material compliance with all
applicable corporate governance requirements set forth in the Nasdaq Global Marketplace Rules.
(l) The Company has not sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree; and, since the respective
dates as of which information is given in the Prospectus and General Disclosure Package, there has
not been any change in the capital stock (other than as a result of the grant of stock pursuant to
the Company’s current stock option plans described in the Prospectus and General Disclosure
Package, the crediting to and distributions from director stock accounts
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under the Company’s directors’ deferred compensation plan, and the cancellation or exercise of
stock options granted pursuant to the Company’s current stock option plans described in the
Prospectus and General Disclosure Package), short-term debt or long-term debt of the Company or any
material adverse change, or any development involving a prospective material adverse change, in or
affecting the general affairs, management, financial position, assets, business, stockholders’
equity or results of operations of the Company or impair in any material respect the ability of the
Company to perform its obligations under this Agreement or to consummate any transactions
contemplated by this Agreement (any such effect as described in this Section 3(l), a
“Material Adverse Effect”), otherwise than as set forth or contemplated in the Prospectus and
General Disclosure Package.
(m) The Company does not own any real property; the Company has good and marketable title to all
tangible personal property owned by it, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus and General Disclosure Package or such as do
not materially affect the value of such property and do not interfere with the use made of such
property by the Company; and any real property and buildings held under lease by the Company are
held by it under valid, subsisting and enforceable leases with such exceptions as would not result
in a Material Adverse Effect.
(n) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and corporate authority to own its
properties and conduct its business as described in the Prospectus and General Disclosure Package,
and has been duly qualified as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, except where the failure to be so
qualified would not result in a Material Adverse Effect.
(o) The Company does not control directly or indirectly or have any direct or indirect equity
participation or similar interest in any corporation, partnership, limited liability company, joint
venture, trust or other business association or entity.
(p) The Company has an authorized capitalization as set forth in the Prospectus and General
Disclosure Package, and all of the issued shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable.
(q) The Shares to be issued and sold by the Company to the Underwriter hereunder have been duly and
validly authorized and, when issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and nonassessable and free of any preemptive, registration
or similar rights (other than as have previously been waived) and will conform to the description
thereof contained in the Prospectus and General Disclosure Package.
(r) The issue and sale of the Shares by the Company and the compliance by the Company with all of
the provisions of this Agreement, and the consummation of the transactions contemplated herein will
not conflict with or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the
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Company is bound or to which any of the property or assets of the Company is subject, other than
any conflict, breach or violation that would not have a Material Adverse Effect, nor will such
action result in any violation of the provisions of the Certificate of Incorporation or By-laws of
the Company or any statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares or the consummation by the Company
of the transactions contemplated by this Agreement, except such as have been, or will have been
prior to the Closing Date, obtained under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required under state securities or Blue
Sky laws in connection with the offering and sale of the Shares.
(s) The Company is not (i) in violation of its Certificate of Incorporation or By-laws or (ii) in
default in the performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its properties may be
bound, except in the case of clause (ii), any default that would not have a Material Adverse
Effect.
(t) Neither the Company nor any of its affiliates (within the meaning of FINRA’s NASD Conduct Rule
2720(f)(1)) directly or indirectly controls, is controlled by, or is under common control with, or
is an associated person (within the meaning of Article I, Section 1(ee) of the By-laws of FINRA)
of, any member firm of FINRA.
(u) The statements set forth in the Prospectus under the caption “Description of Capital Stock”,
insofar as they purport to constitute a summary of the terms of the Shares, and the statements set
forth in the Prospectus under the caption “Underwriting” (other than the Underwriter’s Information,
the statements incorporated by reference into the Prospectus from the Company’s Annual Report on
Form 10-K for the year ended December 31, 2009 filed with the Commission, as amended, under the
captions “Business — Licenses and Collaborative Relationships, — Manufacturing, — Intellectual
Property, and — Government Regulation,” and the statements set forth in the Prospectus under the
captions “Prospectus Supplement Summary — Our Business,” “Risk Factors — Risks Related to Our
Dependence on Third Parties — We are dependent upon our collaborative arrangement with Ipsen to
further=develop and commercialize toremifene in Xxxxx’x licensed territories. We may also
be dependent upon additional collaborative arrangements to complete the development and
commercialization of some of our other product candidates. These collaborative arrangements may
place the development and commercialization of our product candidates outside our control, may
require us to relinquish important rights or may otherwise be on terms unfavorable to us, — We may
not realize the anticipated benefits from our collaborative arrangement with Ipsen, and may not
receive the anticipated benefits from any future collaboration arrangements that we might
establish, and — If third parties do not manufacture our product candidates in sufficient
quantities, in the required timeframe, and at an acceptable cost, clinical development and
commercialization of our product candidates would be delayed, — Risks Related to Our Intellectual
Property. — If we lose our licenses from the University of Tennessee Research Foundation, or
UTRF, we may be unable to continue a substantial part of our business — If some or all of our, or
our licensors’, patents expire or are invalidated or are found to be
8
unenforceable, or if some or all of our patent applications do not result in issued patents o
result in patents with narrow or unenforceableclaims, or if we are prevented from
asserting that the claims of an issued patent cover a product of a third party, we may be subject
to competition from third parties with products with the same active pharmaceutical ingredients as
our product candidates, — Off-label sale or use of third-party toremifene products could decrease
sales of any toremifene product candidates that we continue to develop and that are approved for
commercial sale, and could lead to pricing pressure if such products become available at
competitive prices and in dosages that are appropriate for the indications for which we and Ipsen
may continue to develop toremifene, and — Our license agreement with Orion excludes the use of
toremifene in humans to treat breast cancer outside the United States and may limit our ability to
market toremifene for human uses outside the United States, — Risks Related to Commercialization —
If we, Ipsen, and/or any potential future collaborators are unable to obtain reimbursement or
experience a reduction reimbursement from third-party payors for products we sell, our revenues and
prospects for profitability will suffer, — Risks Related to Our Common Stock — Anti-takeover
provisions in our charter documents and under Delaware law could make an acquisition of us, which
may be beneficial to our stockholders, more difficult and may prevent attempts by our stockholders
to replace or remove our current management, and — If there are substantial sales of our common
stock, the market price of our common stock could drop substantially, even if our business is doing
well,” insofar as they purport to describe the provisions of the laws and documents referred to
therein, are accurate, complete and fair.
(v) There are no legal or governmental proceedings pending to which the Company is a party or of
which any property of the Company is the subject, which, if determined adversely to the Company,
would individually or in the aggregate have a Material Adverse Effect; and, to the Company’s
knowledge, no such proceedings are threatened or contemplated by governmental authorities or
threatened by others.
(w) The Company is not and, after giving effect to the offering and sale of the Shares, will not be
an “investment company”, as such term is defined in the Investment Company Act of 1940, as amended
and the rules and regulations of the Commission promulgated thereunder.
(x) The Company does not do business with the government of Cuba nor, to the Company’s knowledge,
with any person or affiliate located in Cuba within the meaning of Section 517.075, Florida
Statutes.
(y) Ernst & Young LLP, who have audited certain financial statements and related schedules included
or incorporated by reference in the Registration Statement, the General Disclosure Package and the
Prospectus, and have audited the Company’s internal control over financial reporting, is an
independent registered public accounting firm as required by the Securities Act and the Rules and
Regulations and the Public Company Accounting Oversight Board (United States) (the “PCAOB”). Ernst
& Young LLP have not been engaged by the Company to perform any “ prohibited activities” (as
defined in Section 10A of the Exchange Act).
(z) The financial statements of the Company (together with the related notes thereto) included or
incorporated by reference in the Registration Statement, Prospectus and the
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General Disclosure Package as amended or supplemented (i) fairly present in all material respects
the financial condition and results of the operations and cash flows of the Company as of the
respective dates indicated and for the respective periods specified, (ii) complied as to form in
all material respects with applicable accounting requirements and the published rules and
regulations of the Commission with respect thereto (including, without limitation, Regulation S-X)
and (iii) have been prepared in accordance with generally accepted accounting principles in the
United States applied on a consistent basis during the periods and at the dates involved (except as
may be indicated in the notes thereto); the summary and selected financial data included or
incorporated by reference in the Registration Statement, Prospectus and the General Disclosure
Package as amended or supplemented fairly present the information shown therein and have been
compiled on a consistent basis with that of the audited financial information incorporated by
reference in the Registration Statement, Prospectus and the General Disclosure Package; There is no
pro forma or as adjusted financial information which is required to be included in the Registration
Statement, Prospectus or the General Disclosure Package, or a document incorporated by reference
therein in accordance with the Securities Act and the Rules and Regulations which has not been
included or incorporated as so required. The pro forma and pro forma as adjusted financial
information and the related notes included or incorporated by reference in the Registration
Statement, Prospectus and the General Disclosure Package, if any, have been properly compiled and
prepared in accordance with the applicable requirements of the Securities Act and the Rules and
Regulations and present fairly the information shown therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(aa) The Company maintains a system of internal control over financial reporting (as such term is
defined in Rule 13a-15(f) of the Exchange Act) that complies with the requirements of the Exchange
Act and has been designed by the Company’s principal executive officer and principal financial
officer, or under their supervision, to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles; 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; there has been no fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s internal control over
financial reporting; since the date of the latest audited financial statements included or
incorporated by reference in the Registration Statement, Prospectus and the General Disclosure
Package, 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.
(bb) The Company maintains disclosure controls and procedures (as such term is defined in Rule
13a-15(e) of the Exchange Act) that comply with the requirements of the Exchange Act; such
disclosure controls and procedures have been designed to ensure that material information relating
to the Company is made known to the Company’s principal executive officer and principal financial
officer by others within those entities; such disclosure controls and procedures are effective.
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(cc) The Company is in compliance in all material respects with all applicable provisions of the
Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations promulgated by the Commission thereunder
(the “Xxxxxxxx-Xxxxx Act”).
(dd) The Company owns or has valid, binding and enforceable licenses or other rights to use the
patents and patent applications, copyrights, trademarks, trade names, service marks, service names,
and know-how (including trade secrets and other unpatented proprietary intellectual property
rights) that are necessary or used in any material respect to conduct its business in the manner in
which it is described as being conducted and in the manner in which it is contemplated to be
conducted as set forth in the Registration Statement, Prospectus and the General Disclosure Package
as amended or supplemented with respect to Company’s product candidates identified in the table set
forth under the caption “Product Candidates” from the Company’s Quarterly Report on Form 10-Q for
the quarterly period ended June 30, 2010 and the Company’s commercial product FARESTON® (toremifene
citrate) 60 mg tablets (the “Products”) (such rights are referred to herein collectively as the
“Company Intellectual Property”); the Company owns or possesses licenses or other rights to use the
patents and patent applications set forth on the schedule made available to the Underwriter or its
counsel prior to the date hereof (the “Patent Schedule”) (the patents and patent applications set
forth on the Patent Schedule that disclose or claim the Products are referred to herein
collectively as the “Company Patents”) that are necessary or used in any material respect to
conduct its business in the manner in which it is described as being conducted and in the manner in
which it is contemplated to be conducted as set forth in the Registration Statement, the General
Disclosure Package and the Prospectus as amended or supplemented; other than as disclosed in the
Registration Statement, the General Disclosure Package and the Prospectus as amended or
supplemented, the Company has exclusive rights to develop, market and commercialize the Products as
disclosed in the Registration Statement, the General Disclosure Package and the Prospectus as
amended or supplemented; to the Company’s knowledge, there are no published patents, patent
applications, articles or other prior art references or other facts or circumstances that would
reasonably be likely to adversely affect the validity or enforceability of any Company Patent in
any material way, nor is any material fact known by the Company with respect to patent applications
within the Company Patents that would preclude the issuance of patents with respect to such
applications or would render such patents invalid or unenforceable; the Company is not obligated to
pay a royalty, grant a license, or provide other consideration to any third party in connection
with the Products other than as disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus as amended or supplemented; the Company has not received any notice of
infringement or conflict with (and the Company is not aware of any infringement or conflict with)
the rights of others with respect to the Products as used in connection with its business as
currently conducted or as currently contemplated to be conducted as described in the Registration
Statement, the General Disclosure Package and the Prospectus as amended or supplemented; there are
no pending, nor has there been any notice of any threatened, actions, suits, proceedings, claims or
allegations by others that the Company is or will be infringing any patent, trade secret,
trademark, service xxxx, copyright or other proprietary intellectual property rights through the
manufacture, use or sale of any Products; the manufacture, use or sale of the Products, described
in the Registration Statement, the General Disclosure Package and the Prospectus as amended or
supplemented as being under development and other activities of the Company referred to in the
Registration Statement, the General Disclosure Package and the Prospectus as amended o
r
supplemented do not, and to the Company’s knowledge, will not,
11
infringe or conflict with any patent of any third party in a manner which could reasonably be
expected to have a Material Adverse Effect; the Company has not been notified of any material
inventorship challenges or any interference proceeding having been declared or provoked with
respect to the Company Patents, nor is any material fact known by the Company which fact is
reasonably likely to result in any material inventorship challenge or interference proceeding with
respect to such Company Patents; to the Company’s knowledge, no third party has infringed or
misappropriated, and no third party is currently infringing or misappropriating the Company
Intellectual Property in any material respect; except as described in the Registration Statement,
the General Disclosure Package and the Prospectus as amended or supplemented and for any rights of
the United States government pursuant to 35 U.S.C. § 200 et seq. relating to a Product, no third
party, including any academic institution or any other government entity, possesses rights to the
Company Patents which, if exercised, could enable such party to develop products competitive to a
Product or could reasonably be expected to have a Material Adverse Effect; except as described in
the Registration Statement, the General Disclosure Package and the Prospectus as amended or
supplemented, the Company is not in material breach of, and has complied in all material respects
with all terms of, any license agreement to which it is a party that covers technology necessary to
conduct or used in any material respect in the conduct of the Company’s business in the manner in
which it is described as being conducted and in the manner in which it is contemplated to be
conducted as set forth in the Registration Statement, the General Disclosure Package and the
Prospectus as amended or supplemented; there are no license agreements to which the Company is a
party that are material to the Company Patents or to the Company’s proprietary information included
in the Company Intellectual Property other than those described in the Registration Statement, the
General Disclosure Package and the Prospectus as amended or supplemented; no Company employee is
obligated under any contract (including licenses, covenants or commitments of any nature) or other
agreement, or subject to any judgment, decree or order of any court or administrative agency, that
would interfere with the use of such employee’s best efforts to promote the interest of the Company
or that would conflict with the Company’s business; none of the execution and delivery of this
Agreement, the carrying on of the Company’s business by the employees of the Company, and the
conduct of the Company’s business as proposed, will conflict with or result in a breach of terms,
conditions, or provisions of, or constitute a default under, any contract, covenant or instrument
under which any such employee is now obligated; and it is not and will not be necessary to use any
inventions, trade secrets or proprietary information of any of its consultants, or its employees
(or persons it currently intends to hire) made prior to their employment by the Company, except for
technology that is licensed to or owned by the Company.
(ee) The Company has complied with the required duty of candor and good faith in dealing with the
United States Patent and Trademark Office (the “PTO”) with respect to the Company Patents, and to
the Company’s knowledge, all individuals to whom the duty of candor and good faith applies with
respect to the Company Patents have complied with such duty, including the duty to disclose to the
PTO all information believed to be material to the patentability of the Company Patents and pending
U.S. patent applications within Company Patents; the Company and the University of Tennessee
Research Foundation (“UTRF”) are identified in the records of the PTO as the holder of record of
the U.S. patents and patent applications of the Company Patents as set forth in the Patent Schedule
with respect to the Products; the Company and UTRF are similarly listed in the records of
corresponding foreign agencies with respect to the foreign counterparts of the Company Patents with
respect to the Products; except for the rights of UTRF,
12
Orion, The Ohio State University (“OSU”) and Ipsen Biopharm Limited (“Ipsen”) that are described in
the Registration Statement, the General Disclosure Package and the Prospectus as amended or
supplemented, the rights of the OSU solely to receive payments from UTRF with respect to certain
patent applications and related patents and to utilize certain of the Company Patents for academic,
non-commercial purposes, the rights of the United States government pursuant to 35 U.S.C. § 200 et
seq. relating to a Product Candidate, and the nonexclusive rights that the Company granted to third
party contractors to perform activities on the Company’s behalf to develop Product Candidates, no
other entity or individual has any right, title or interest in the Company Patents; there are no
legal or governmental proceedings pending relating to Company Patents other than PTO or World
Intellectual Property Organization (“WIPO”) (or patent offices in other jurisdictions) review of
pending applications for patents, and, other than PTO or WIPO (or patent offices in other
jurisdictions) review of pending applications for patents, to the Company’s knowledge, no such
proceedings are threatened or contemplated by governmental authorities or others, and the Company
is not aware of any fact that is likely to result in any such proceeding; and the Company is
diligently prosecuting, and shall continue to diligently prosecute, claims in the patent
applications within the Company Patents which claim Products or methods related to their
manufacture and use.
(ff) The Company possesses all registrations, approvals, certificates, authorizations and permits
issued by the appropriate federal, state, local or foreign regulatory authorities necessary to
conduct its business as described in the Registration Statement, the General Disclosure Package and
the Prospectus as amended or supplemented, including without limitation, all such registrations,
approvals, certificates, authorizations and permits required by the United States Food and Drug
Administration (the “FDA”) or any other federal, state, local or foreign agencies or bodies engaged
in the regulation of pharmaceuticals or biohazardous substances or materials, except where the
failure to possess such registrations, approvals, certificates, authorizations and permits, singly
or in the aggregate, would not have a Material Adverse Effect; and the Company has not received any
notice of proceedings relating to, and there are no facts or circumstances, including without
limitation facts or circumstances relating to the withdrawal, revocation, suspension, modification
or termination of any registration, approval, certificate, authorization or permit held by others,
known to the Company that could lead to, the withdrawal, revocation, suspension, modification or
termination of any such registration, approval, certificate, authorization or permit, which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or finding, could result in
a Material Adverse Effect.
(gg) The Company and, to the Company’s knowledge, others who perform services on the Company’s
behalf have been and are in compliance with all applicable federal, state, local and foreign laws,
rules, regulations, standards, orders and decrees governing their respective businesses, including
without limitation, all regulations promulgated by the FDA or any other federal, state, local or
foreign agencies or bodies engaged in the regulation of pharmaceuticals or biohazardous substances
or materials, except where noncompliance would not, singly or in the aggregate, have a Material
Adverse Effect; and the Company has not received any notice citing action or inaction by the
Company or others who perform services on the Company’s behalf that would constitute non-compliance
with any applicable federal, state, local or foreign laws, rules, regulations or standards.
13
(hh) The tests and preclinical and clinical studies conducted by or on behalf of the Company that
are described in the Registration Statement, the General Disclosure Package and the Prospectus as
amended or supplemented were and, if still pending, are being, conducted in all material respects
in accordance with experimental protocols, procedures and controls generally used by qualified
experts in the preclinical and clinical study of new drugs, and laws and regulations; the
descriptions of the tests and preclinical and clinical studies, and results thereof, conducted by
or on behalf of the Company contained in the Registration Statement, the General Disclosure Package
and the Prospectus as amended or supplemented are accurate in all material respects; the Company
has not received any written notice or correspondence from the FDA or any foreign, state or local
governmental body exercising comparable authority or any Institutional Review Board or comparable
authority requiring the termination, suspension, material modification or clinical hold of any
tests or preclinical or clinical studies conducted by or on behalf of the Company, which
termination, suspension, material modification or clinical hold would reasonably be expected to
have a Material Adverse Effect; and the Company has not received any written notices or
correspondence from others concerning the termination, suspension, material modification or
clinical hold of any tests or preclinical or clinical studies conducted by others on any active
ingredient contained in the existing products of the Company or the products described in the
Registration Statement, the General Disclosure Package and the Prospectus as amended or
supplemented as being under development, which termination, suspension, material modification or
clinical hold would reasonably be expected to have a Material Adverse Effect.
(ii) The Company has all consents, authorizations, approvals, orders, certificates and permits of
and from, and has made all declarations and filings with, all foreign, federal, state, local and
other governmental authorities, all self-regulatory organizations and all courts and other
tribunals necessary to own, lease, license and use its properties and assets and to conduct its
business in the manner in which it is described in the Registration Statement, the General
Disclosure Package and the Prospectus as amended or supplemented, except for such consents,
authorizations, approvals, orders, certificates, permits, declarations and filings the failure of
which to have, maintain or make would not have a Material Adverse Effect; the Company has not
received any notice of proceedings relating to the revocation or modification of any such consent,
authorization, approval, order, certificate or permit; and the Company is in compliance with all
applicable foreign, federal, state and local laws and regulations, except for any noncompliance
that, singly or in the aggregate, would not have a Material Adverse Effect.
(jj) There are no contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to include any securities of the
Company with the Shares registered pursuant to the Registration Statement, except as otherwise
disclosed in the Registration Statement, the General Disclosure Package and the Prospectus as
amended or supplemented or as have been waived in writing by such person.
(kk) The Company (i) is in compliance with any and all applicable foreign, federal, state and local
laws, regulations and common law standards of conduct relating to the protection of human health
and safety, the environment or hazardous or toxic substances, chemicals, wastes, pollutants and
contaminants (“Environmental Laws”), (ii) has received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct its
14
businesses as described in the Registration Statement, the General Disclosure Package and the
Prospectus as amended or supplemented, (iii) is in compliance with all terms and conditions of any
such permit, license or approval, (iv) is not subject to any liability under any Environmental Law
for the release or disposal of any substance regulated pursuant to any Environmental Law, (v) has
not received any claim, notice or demand indicating that it may be in violation of, or subject to
liability or costs under, any Environmental Law and (vi) is not subject to any order, decree,
injunction or agreement with any governmental authority or any third party concerning obligations
or liabilities relating to any Environmental Law, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals or liabilities, claims,
orders or agreement would not, singly or in the aggregate, have a Material Adverse Effect.
(ll) The Company is not involved in any labor dispute nor, to the Company’s knowledge, is any such
dispute threatened; and the Company is not aware that (i) any executive, key employee, key
consultant or significant group of employees or consultants of the Company plans to terminate his
or her employment or consulting arrangement with the Company or (ii) any such executive, key
employee or key consultant is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be violated by the present or proposed
business activities of the Company.
(mm) The Company is insured by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent and customary in the business in which the Company is
engaged, the Company has not been refused any insurance coverage sought or applied for; and the
Company does not have any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost that would not have a Material
Adverse Effect.
(nn) Each material contract, agreement and license filed as an exhibit to the Registration
Statement to which the Company is bound is legal, valid, binding, enforceable in accordance with
its terms and in full force and effect against the Company and, to the Company’s knowledge, each
other party thereto; except as described in the Registration Statement, the General Disclosure
Package and the Prospectus as amended or supplemented, neither the Company nor, to the Company’s
knowledge, any other party, is in material breach or default with respect to any such contract,
agreement and license, and, to the Company’s knowledge, no event has occurred which with notice or
lapse of time would constitute a material breach or default, or permit termination, modification,
or acceleration, under any such contract, agreement or license; and to the Company’s knowledge, no
party has repudiated any material provision of any such contract, agreement or license.
(oo) The statistical and market-related data included in the Registration Statement, the General
Disclosure Package and the Prospectus as amended or supplemented are based on or derived from
sources which the Company reasonably and in good faith believes are reliable and accurate, and such
data agree with the sources from which they are derived.
15
Any certificate signed by or on behalf of the Company and delivered to the Underwriter or to
counsel for the Underwriter shall be deemed to be a representation and warranty by the Company to
the Underwriter as to the matters covered thereby.
4. Further Agreements of the Company. The Company agrees with the Underwriter:
(a) To prepare the Prospectus in a form approved by the Underwriter containing information
previously omitted at the time of effectiveness of the Registration Statement in reliance on Rules
430A, 430B and 430C of the Rules and Regulations and to file such Prospectus pursuant to Rule
424(b) under the Securities Act not later than the second (2nd) business day following
the execution and delivery of this Agreement or, if applicable, such earlier time as may be
required by Rule 430A of the Rules and Regulations; to notify the Underwriter promptly of the
Company’s intention to file or prepare any supplement or amendment to any Registration Statement or
to the Prospectus in connection with this Offering and to provide a draft of any such amendment or
supplement to the Registration Statement, the General Disclosure Package or to the Prospectus to
the Underwriter within an amount of time that is reasonably practical to review under the
circumstances and prior to filing; to advise the Underwriter, promptly after it receives notice
thereof, of the time when any amendment to any Registration Statement has been filed in connection
with the Offering or becomes effective or any supplement to the General Disclosure Package or the
Prospectus or any amended Prospectus has been filed and to furnish the Underwriter copies thereof;
to file promptly all material required to be filed by the Company with the Commission pursuant to
Rules 433(d) or 162(b)(2), as the case may be; to file within the time periods prescribed by the
Exchange Act, including any extension thereof, all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and for so long as
the delivery of a prospectus (or in lieu thereof, the notice referred to in Rule 173(a) under the
Securities Act) is required in connection with the offering or sale of the Shares; to advise the
Underwriter, promptly after it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any Preliminary Prospectus, any
Issuer Free Writing Prospectus or the Prospectus, of the suspension of the qualification of the
Shares for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or supplementing of the
Registration Statement, the General Disclosure Package or the Prospectus or for additional
information; and, in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus, any Issuer Free Writing Prospectus or the
Prospectus or suspending any such qualification, and promptly to use its best efforts to obtain the
withdrawal of such order.
(b) The Company represents and agrees that it unless it obtains or has obtainedthe prior
consent of the Underwriter, 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 under the Securities Act unless
the prior written consent of the Underwriter has been received (each, a “Permitted Free Writing
Prospectus”); provided that the prior written consent of the Underwriter hereto shall be deemed to
have been given in respect of the Issuer Free Writing Prospectus included in Schedule B
hereto. The Company represents that it has treated and agrees that it will treat each Permitted
Free Writing Prospectus as an Issuer Free Writing Prospectus, comply with the
16
requirements of Rules 164 and 433 under the Securities Act applicable to any Issuer Free Writing
Prospectus, including the requirements relating to timely filing with the Commission, legending and
record keeping and will not take any action that would result in the Underwriter or the Company
being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free
writing prospectus prepared by or on behalf of the Underwriter that otherwise would not have been
required to file thereunder.
(c) If at any time when a Prospectus relating to the Shares is required to be delivered under the
Securities Act, any event occurs or condition exists as a result of which the Prospectus, as then
amended or supplemented, would include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, or the Registration Statement, as then amended or
supplemented, would include any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein not misleading, or if for any other reason it is
necessary at any time to amend or supplement any Registration Statement or the Prospectus to comply
with the Securities Act or the Exchange Act, the Company will promptly notify the Underwriter, and
upon the Underwriter’s request, the Company will promptly prepare and file with the Commission, at
the Company’s expense, an amendment to the Registration Statement or an amendment or supplement to
the Prospectus that corrects such statement or omission or effects such compliance and will deliver
to the Underwriter, without charge, such number of copies thereof as the Underwriter may reasonably
request. The Company consents to the use of the Prospectus or any amendment or supplement thereto
by the Underwriter.
(d) If the General Disclosure Package is being used to solicit offers to buy the Shares at a time
when the Prospectus is not yet available to prospective purchasers and any event shall occur as a
result of which, in the judgment of the Company or in the reasonable opinion of the Underwriter, it
becomes necessary to amend or supplement the General Disclosure Package in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
or to make the statements therein not conflict with the information contained or incorporated by
reference in the Registration Statement then on file and not superseded or modified, or if it is
necessary at any time to amend or supplement the General Disclosure Package to comply with any law,
the Company promptly will either (i) prepare, file with the Commission (if required) and furnish to
the Underwriter and any dealers an appropriate amendment or supplement to the General Disclosure
Package or (ii) prepare and file with the Commission an appropriate filing under the Exchange Act
which shall be incorporated by reference in the General Disclosure Package so that the General
Disclosure Package as so amended or supplemented will not, in the light of the circumstances under
which they were made, be misleading or conflict with the Registration Statement then on file, or so
that the General Disclosure Package will comply with law.
(e) If at any time following issuance of an Issuer Free Writing Prospectus in connection with the
Offering there occurred or occurs an event or development as a result of which such Issuer Free
Writing Prospectus conflicted or will conflict with the information contained in the Registration
Statement, Pricing Prospectus or Prospectus, including any document incorporated by reference
therein and any prospectus supplement deemed to be a part thereof and not superseded or modified or
included or would include an untrue statement of a material
17
fact or omitted or would omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading, the Company has promptly notified or will promptly notify the Underwriter
(and the Underwriter agrees to cease any such use promptly upon such notification) so that any use
of the Issuer Free Writing Prospectus may cease until it is amended or supplemented and has
promptly amended or will promptly amend or supplement, at its own expense, such Issuer Free Writing
Prospectus to eliminate or correct such conflict, untrue statement or omission. The foregoing
sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus in
reliance upon, and in conformity with, written information furnished to the Company by the
Underwriter specifically for inclusion therein, which information the parties hereto agree is
limited to the Underwriter’s Information (as defined in Section 17).
(f) To the extent not available on the Commission’s XXXXX system, to furnish promptly to the
Underwriter and to counsel for the Underwriter a signed copy of the Registration Statement as
originally filed with the Commission, and of each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
(g) To the extent not available on the Commission’s XXXXX system, to deliver promptly to the
Underwriter in New York City such number of the following documents as the Underwriter shall
reasonably request: (i) conformed copies of the Registration Statement as originally filed with the
Commission (in each case excluding exhibits), (ii) each Preliminary Prospectus, if any (iii) any
Issuer Free Writing Prospectus, (iv) the Prospectus (the delivery of the documents referred to in
clauses (i), (ii), (iii) and (iv) of this paragraph (g) to be made not later than 10:00
A.M., New York time, on the business day following the execution and delivery of this Agreement),
(v) conformed copies of any amendment to the Registration Statement (excluding exhibits), (vi) any
amendment or supplement to the General Disclosure Package or the Prospectus (the delivery of the
documents referred to in clauses (v) and (vi) of this paragraph (g) to be made not later
than 10:00 A.M., New York City time, on the business day following the date of such amendment or
supplement) and (vii) any document incorporated by reference in the General Disclosure Package or
the Prospectus (excluding exhibits thereto) (the delivery of the documents referred to in clause
(vi) of this paragraph (g) to be made not later than 10:00 A.M., New York City time, on the
business day following the date of such document).
(h) To make generally available to its shareholders as soon as practicable, but in any event not
later than eighteen (18) months after the effective date of each Registration Statement (as defined
in Rule 158(c) under the Securities Act), an earnings statement of the Company (which need not be
audited) complying with Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(i) To take promptly from time to time such actions as the Underwriter may reasonably request to
qualify the Shares for offering and sale under the securities or Blue Sky laws of such
jurisdictions (domestic or foreign) as the Underwriter may designate and to continue such
qualifications in effect, and to comply with such laws, for so long as required to permit the offer
and sale of Stock in such jurisdictions; provided that the Company shall not be obligated to
qualify as foreign corporations in any jurisdiction in which they are not so qualified or to file a
general consent to service of process in any jurisdiction.
18
(j) To the extent not available on the Commission’s XXXXX system, upon request, during the period
of five (5) years from the date hereof, to deliver to the Underwriter, (i) as soon as they are
available, copies of all reports or other communications furnished to shareholders generally, and
(ii) as soon as they are available, copies of any reports and financial statements furnished or
filed with the Commission or any national securities exchange or automatic quotation system on
which the Shares are listed or quoted.
(k) That the Company will not, for a period of ninety (90) days from the date of the Prospectus,
(the “Lock-Up Period”) without the prior written consent of LCM, directly or indirectly offer,
sell, assign, transfer, pledge, contract to sell, or otherwise dispose of, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for Common Stock, other
than (i) the Company’s sale of the Shares hereunder, (ii) the issuance of Common Stock options to
acquire Common Stock or other equity awards pursuant to the Company’s employee benefit plans,
qualified stock option plans, directors’ deferred compensation plan or other equity compensation
plans (as such plans are in existence on the date hereof and described in the Prospectus), and the
issuance of Common Stock pursuant to the valid exercises of options, warrants or rights outstanding
on the date hereof , and (iii) Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock issued in connection with strategic transactions involving the
Company and other entities, including without limitation (A) joint ventures, manufacturing,
marketing or distribution arrangements or (B) technology transfers or development arrangements. The
Company will cause each executive officer, and director listed in Schedule C to furnish to
the Underwriter, prior to the Closing Date, a letter, substantially in the form of Exhibit
A hereto, pursuant to which, subject to exceptions as set forth therein, each such person shall
agree, among other things, not to directly or indirectly offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, not to engage in any swap or other agreement
or arrangement that transfers, in whole or in part, directly or indirectly, the economic risk of
ownership of Common Stock or any such securities and not to engage in any short selling of any
Common Stock or any such securities, during the Lock-Up Period, without the prior written consent
of LCM. The Company also agrees that during such period, the Company will not file any registration
statement, preliminary prospectus or prospectus, or any amendment or supplement thereto, under the
Securities Act for any such transaction or which registers, or offers for sale, Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock, except for (x) any
registration statement on Form S-8 relating to employee or director benefit plans or (y) any
registration statement the Company is contractually obligated to file (the “Oracle Registration
Statement”) pursuant to that certain Amended and Restated Registration Rights Agreement, dated as
of August 7, 2003 (the “Amended RRA”), as amended, between the Company and Oracle Partners, L.P.;
however, the Company agrees that it shall not file with the Commission such Oracle Registration
Statement prior to the last day on which the Company is permitted to file such Oracle Registration
Statement under the terms of the Amended RRA. The Company hereby agrees that (i) if it issues an
earnings release or material news, or if a material event relating to the Company occurs, during
the last seventeen (17) days of the Lock-Up Period, or (ii) if prior to the expiration of the
Lock-Up Period, the Company announces that it will release earnings results during the sixteen
(16)-day period beginning on the last day of the Lock-Up Period, the restrictions imposed by this
paragraph (k) or the letter shall continue to apply until the expiration of the eighteen
(18)-day
19
period beginning on the issuance of the earnings release or the occurrence of the material news or
material event.
(l) To supply the Underwriter with copies of all correspondence to and from, and all documents
issued to and by, the Commission in connection with the registration of the Shares under the
Securities Act or the Registration Statement, any Preliminary Prospectus or the Prospectus, or any
amendment or supplement thereto or document incorporated by reference therein.
(m) Prior to the Closing Date, not to issue any press release or other communication directly or
indirectly or hold any press conference with respect to the Company, its condition, financial or
otherwise, or earnings, business affairs or business prospects (except for routine oral
communications regarding the Company’s business in the ordinary course of business and consistent
with the past practices of the Company and of which the Underwriter is notified), without the prior
written consent of the Underwriter, unless in the judgment of the Company and its counsel, and
after notification to the Underwriter, such press release or communication is required by law.
(n) Until the Underwriter shall have notified the Company of the completion of the offering of the
Shares, that the Company will not, and will cause its affiliated purchasers (as defined in
Regulation M under the Exchange Act) not to, either alone or with one or more other persons, bid
for or purchase, for any account in which it or any of its affiliated purchasers has a beneficial
interest, any Stock, or attempt to induce any person to purchase any Stock; and not to, and to
cause its affiliated purchasers not to, make bids or purchase for the purpose of creating actual,
or apparent, active trading in or of raising the price of the Shares.
(o) To apply the net proceeds from the sale of the Shares as set forth in the Registration
Statement, the General Disclosure Package and the Prospectus under the heading “Use of Proceeds.”
(p) To use commercially reasonable efforts to list, effect and maintain the quotation of the Shares
on the Nasdaq GM.
(q) To use reasonable efforts to assist the Underwriter or its counsel with any filings with FINRA,
including obtaining a “Conditional No Objections” letter and final “415 Takedown” clearance from
FINRA, and as to the amount of compensation allowable or payable to the Underwriter in connection
with any subsequent submissions or amendments sought by FINRA in connection with the Offering.
(r) To use its best efforts to do and perform all things required to be done or performed under
this Agreement by the Company prior to the Closing Date and any Option Closing Date and to satisfy
all conditions precedent to the delivery of the Firm Shares and any Additional Shares, if any.
5. Payment of Expenses. The Company agrees to pay, or reimburse if paid by the
Underwriter, upon consummation of the transactions contemplated hereby: (a) the costs incident to
the authorization, issuance, sale, preparation and delivery of the Shares to the Underwriter and
any taxes payable in that connection; (b) the costs incident to the Registration of
20
the Shares under the Securities Act; (c) the costs incident to the preparation, printing and
distribution of the Registration Statement, the Base Prospectus, any Preliminary Prospectus, any
Issuer Free Writing Prospectus, the General Disclosure Package, the Prospectus, any amendments,
supplements and exhibits thereto or any document incorporated by reference therein and the costs of
printing, reproducing and distributing any transaction document by mail, telex or other means of
communications; (d) the reasonable and documented fees and expenses (including related fees and
expenses of counsel for the Underwriter) incurred in connection with securing any required review
by FINRA of the terms of the sale of the Shares and any filings made with FINRA; (e) any applicable
listing, quotation or other fees; (f) the reasonable and documented fees and expenses (including
related fees and expenses of counsel to the Underwriter) of qualifying the Shares under the
securities laws of the several jurisdictions as provided in Section 4(i) and of preparing,
printing and distributing wrappers, Blue Sky Memoranda and Legal Investment Surveys (if any); (g)
the cost of preparing and printing stock certificates; (h) all fees and expenses of the registrar
and transfer agent of the Shares; and (i) all other costs and expenses incident to the offering of
the Shares or the performance of the obligations of the Company under this Agreement (including,
without limitation, the fees and expenses of the Company’s counsel and the Company’s independent
accountants and the travel and other reasonable and documented expenses incurred by Company
personnel in connection with any “road show” including, without limitation, any expenses advanced
by the Underwriter on the Company’s behalf (which will be promptly reimbursed)); provided that,
except to the extent otherwise provided in this Section 5 and in Sections 7 and
9, the Underwriter shall pay its own costs and expenses.
6. Conditions to the Obligations of the Underwriter, and the Sale of the Shares.
The respective obligations of the Underwriter hereunder, and the Closing of the sale of the Shares,
are subject to the accuracy, when made and as of the Applicable Time and on the Closing Date and
any Option Closing Date, of the representations and warranties of the Company contained herein, to
the accuracy of the statements of the Company made in any certificates pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder, and to each of the
following additional terms and conditions:
(a) No stop order suspending the effectiveness of the Registration Statement or any part thereof,
preventing or suspending the use of any Base Prospectus, any Preliminary Prospectus, the Prospectus
or any Permitted Free Writing Prospectus or any part thereof shall have been issued and no
proceedings for that purpose or pursuant to Section 8A under the Securities Act shall have been
initiated or threatened by the Commission, and all requests for additional information on the part
of the Commission (to be included or incorporated by reference in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the reasonable satisfaction of the
Underwriter; each Issuer Free Writing Prospectus, if any, and the Prospectus shall have been filed
with the Commission within the applicable time period prescribed for such filing by, and in
compliance with, the Rules and Regulations and in accordance with Section 4(a); and FINRA
shall have raised no objection to the fairness and reasonableness of the terms of this Agreement or
the transactions contemplated hereby.
(b) The Underwriter shall not have discovered and disclosed to the Company on or prior to the
Closing Date and any Option Closing Date that the Registration Statement or any amendment or
supplement thereto contains an untrue statement of a fact which, in the opinion
21
of counsel for the Underwriter, is material or omits to state any fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary to make the
statements therein not misleading, or that the General Disclosure Package, any Issuer Free Writing
Prospectus or the Prospectus or any amendment or supplement thereto contains an untrue statement of
fact which, in the opinion of such counsel, is material or omits to state any fact which, in the
opinion of such counsel, is material and is necessary in order to make the statements, in the light
of the circumstances in which they were made, not misleading.
(c) All corporate proceedings and other legal matters incident to the authorization, form and
validity of each of this Agreement, the Shares, the Registration Statement, the General Disclosure
Package, each Issuer Free Writing Prospectus, if any, and the Prospectus and all other legal
matters relating to this Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Underwriter, and the Company shall have
furnished to such counsel all documents and information that they may reasonably request to enable
them to pass upon such matters.
(d) Xxxxxx LLP shall have furnished to the Underwriter such counsel’s written opinion and negative
assurances statement, as counsel to the Company, addressed to the Underwriter and dated the Closing
Date and any Option Closing Date, in form and substance reasonably satisfactory to counsel to the
Underwriter as of the date hereof.
(e) Bass, Xxxxx & Xxxx PLC shall have furnished to the Underwriter such counsel’s written opinion
letter, as counsel to the Company, addressed to the Underwriter and dated the Closing Date and any
Option Closing Date, in form and substance reasonably satisfactory to the Underwriter.
(f) Xxxxx Xxxxx Zedek Xxxxxx LLP shall have furnished to the Underwriter such counsel’s written
opinion and negative assurances statement, as special patent counsel to the Company, addressed to
the Underwriter and dated the Closing Date and any Option Closing Date, in form and substance
reasonably satisfactory to the Underwriter.
(g) Ropes & Xxxx LLP shall have furnished to the Underwriter such counsel’s written opinion and
negative assurances statement, as special regulatory counsel to the Company, addressed to the
Underwriter and dated the Closing Date and any Option Closing Date, in form and substance
reasonably satisfactory to the Underwriter.
(h) The Underwriter shall have received from Proskauer Rose LLP, counsel for the Underwriter, such
opinion or opinions, dated the Closing Date and any Option Closing Date, with respect to such
matters as the Underwriter may reasonably require and the Company shall have furnished to such
counsel such documents as they request for enabling them to pass upon such matters.
(i) At the time of the execution of this Agreement, the Underwriter shall have received from Ernst
& Young LLP a letter, addressed to the Underwriter and to the Company’s Board of Directors,
executed and dated such date, in form and substance reasonably satisfactory to the Underwriter (i)
confirming that they are an independent registered accounting firm with respect to the Company
within the meaning of the Securities Act and the Rules and Regulations and
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PCAOB and (ii) stating the conclusions and findings of such firm, of the type ordinarily included
in accountants’ “comfort letters” to underwriters, with respect to the financial statements and
certain financial information contained or incorporated by reference in the Registration Statement,
the General Disclosure Package and the Prospectus.
(j) On the effective date of any post-effective amendment to the Registration Statement and on the
Closing Date, the Underwriter shall have received a letter (the “Bring-Down Letter”) from Ernst &
Young LLP addressed to the Underwriter and to the Company’s Board of Directors and dated the
Closing Date and any Option Closing Date confirming, as of the date of the Bring-Down Letter (or,
with respect to matters involving changes or developments since the respective dates as of which
specified financial information is given in the General Disclosure Package and the Prospectus, as
the case may be, as of a date not more than three (3) business days prior to the date of the
Bring-Down Letter), the conclusions and findings of such firm, of the type ordinarily included in
accountants’ “comfort letters” to underwriters, with respect to the financial information and other
matters covered by its letter delivered to the Underwriter concurrently with the execution of this
Agreement pursuant to paragraph (j) of this Section 7.
(k) The Company shall have furnished to the Underwriter a certificate, dated the Closing Date and
any Option Closing Date, of its Chairman of the Board, its President or a Vice President and its
chief financial officer stating that (i) since the effective date of the Registration Statement, no
event has occurred which should have been set forth in a supplement or amendment to the
Registration Statement, the General Disclosure Package or the Prospectus, (ii) to the best of their
knowledge after reasonable investigation, as of the Closing Date, the representations and
warranties of the Company in this Agreement are true and correct in all material respects, except
that any such representation or warranty shall be true and correct in all respects where such
representation or warranty is qualified with respect to materiality, and the Company has complied
with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to the Closing Date, and (iii) there has not been, subsequent to the date of the most
recent audited financial statements included or incorporated by reference in the General Disclosure
Package, any material adverse change in the financial position or results of operations of the
Company or any other change or development that (i) would not have, singularly or in the aggregate,
a material adverse effect on the condition (financial or otherwise), results of operations, assets,
business or prospects of the Company, or (ii) would impair in any material respect the ability of
the Company to perform its obligations under this Agreement or to consummate any transactions
contemplated by the Agreement, the General Disclosure Package or the Prospectus, except as set
forth in the Prospectus.
(l) Since the date of the latest audited financial statements included in the General Disclosure
Package or incorporated by reference in the General Disclosure Package as of the date hereof, (i)
the Company shall have sustained any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth in the General Disclosure
Package, and (ii) there shall not have been any change in the capital stock (other than as
a result of the grant of stock options pursuant to the Company’s current stock option plans
described in the Prospectus and General Disclosure Package, the crediting to and
23
distributions from director stock accounts under the Company’s directors’ deferred compensation
plan, and the cancellation or exercise of stock options granted pursuant to the Company’s current
stock option plans described in the Prospectus and General Disclosure Package, all in the ordinary
course of business consistent with past practice) or long-term debt of the Company, or any change,
or any development involving a prospective change, in or affecting the business, general affairs,
management, financial position, stockholders’ equity or results of operations of the Company,
otherwise than as set forth in the General Disclosure Package, the effect of which, in any such
case described in clause (i) or (ii) of this paragraph (l), is, in the judgment of the
Underwriter, so material and adverse as to make it impracticable or inadvisable to proceed with the
sale or delivery of the Shares on the terms and in the manner contemplated in the General
Disclosure Package.
(m) No action shall have been taken and no law, statute, rule, regulation or order shall have been
enacted, adopted or issued by any governmental agency or body which would prevent the issuance or
sale of the Shares or materially and adversely affect the business or operations of the Company;
and no injunction, restraining order or order of any other nature by any federal or state court of
competent jurisdiction shall have been issued which would prevent the issuance or sale of the
Shares or materially and adversely affect the business or operations of the Company.
(n) Subsequent to the execution and delivery of this Agreement (i) no downgrading shall have
occurred in the Company’s corporate credit rating or the rating accorded the Company’s debt
securities by any “nationally recognized statistical rating organization,” as that term is defined
by the Commission for purposes of Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under surveillance or review (other than an
announcement with positive implications of a possible upgrading), the Company’s corporate credit
rating or the rating of any of the Company’s debt securities.
(o) Subsequent to the execution and delivery of this Agreement there shall not have occurred any of
the following: (i) trading in securities generally on the New York Stock Exchange, Nasdaq GM or the
NYSE Amex LLC or in the over-the-counter market, or trading in any securities of the Company on any
exchange or in the over-the-counter market, shall have been suspended or materially limited, or
minimum or maximum prices or maximum range for prices shall have been established on any such
exchange or such market by the Commission, by such exchange or market or by any other regulatory
body or governmental authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities or a material disruption has occurred in commercial
banking or securities settlement or clearance services in the United States, (iii) the United
States shall have become engaged in hostilities, other than current hostilities, or the subject of
an act of terrorism, or there shall have been an outbreak of or escalation in hostilities involving
the United States, or there shall have been a declaration of a national emergency or war by the
United States or (iv) there shall have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment of the Underwriter,
impracticable or inadvisable to proceed with the sale or delivery of the Shares on the terms and in
the manner contemplated in the General Disclosure Package and the Prospectus.
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(p) The Underwriter shall have received the written agreements, substantially in the form of
Exhibit A hereto, of the executive officers and directors of the Company listed in
Schedule C to this Agreement.
(q) The Company shall have filed a Notification: Listing of Additional Shares with the NASDAQ GM
and shall have received no objection thereto from the NASDAQ GM.
(r) The Underwriter shall have received clearance from FINRA as to the amount of compensation
allowable or payable to the Underwriter as described in the Pricing Prospectus.
(s) Prior to the Closing Date, the Company shall have furnished to the Underwriter such further
information, opinions, certificates (including a Secretary’s Certificate), letters or such other
documents as the Underwriter shall have reasonably requested.
(t) The obligations of the Underwriter to purchase Additional Shares on any Option Closing Date (if
other than the Closing Date), if any, hereunder are subject to the delivery to the Underwriter on
the applicable Closing Date or Option Closing Date, as the case may be, of such documents as it may
reasonably request with respect to the good standing of the Company, opinions, comfort letters,
certificates, letters, documents, the due authorization and issuance of the Additional Shares to be
sold on such Option Closing Date and other matters related to the issuance of such Additional
Shares.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriter.
7. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless Underwriter, its affiliates and each of its and
their respective directors, officers, members, employees, representatives and agents (including,
without limitation Lazard Frères & Co. LLC, (which will provide services to LCM) and its
affiliates, and each of its and their respective directors, officers, members, employees,
representatives and agents and each person, if any, who controls Lazard Frères & Co. LLC within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and each person, if
any, who controls the Underwriter within the meaning of Section 15 of the Securities Act of or
Section 20 of the Exchange Act (collectively the “Underwriter Indemnified Parties,” and each a
“Underwriter Indemnified Party”) against any loss, claim, damage, expense or liability whatsoever
(or any action, investigation or proceeding in respect thereof), joint or several, to which the
Underwriter Indemnified Party may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, expense, liability, action, investigation or proceeding arises out of or
is based upon (A) any untrue statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed or
required to be filed pursuant to Rule 433(d) of the Rules and Regulations, any Registration
Statement or the Prospectus, or in any amendment or supplement thereto or document incorporated by
reference therein, or (B) the omission or alleged omission to state in any Preliminary Prospectus,
any Issuer Free Writing Prospectus, any “issuer information” filed or required to be
25
filed pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto or document incorporated by reference
therein, a material fact required to be stated therein or necessary to make the statements therein
not misleading, and shall reimburse the Underwriter Indemnified Party promptly upon demand for any
legal fees or other expenses reasonably incurred by that Underwriter Indemnified Party in
connection with investigating, or preparing to defend, or defending against, or appearing as a
third party witness in respect of, or otherwise incurred in connection with, any such loss, claim,
damage, expense, liability, action, investigation or proceeding, as such fees and expenses are
incurred; provided, however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, expense or liability arises out of or is based upon an untrue
statement or alleged untrue statement in, or omission or alleged omission from any Preliminary
Prospectus, any Registration Statement or the Prospectus, or any such amendment or supplement
thereto, or any Issuer Free Writing Prospectus made in reliance upon and in conformity with written
information furnished to the Company by the Underwriter specifically for use therein, which
information the parties hereto agree is limited to the Underwriter’s Information (as defined in
Section 17). This indemnity agreement is not exclusive and will be in addition to any
liability, which the Company might otherwise have and shall not limit any rights or remedies which
may otherwise be available at law or in equity to each Underwriter Indemnified Party.
(b) The Underwriter shall indemnify and hold harmless the Company and its directors, its officers
who signed the Registration Statement and each person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively the
“Company Indemnified Parties” and each a “Company Indemnified Party”) against any loss, claim,
damage, expense or liability whatsoever (or any action, investigation or proceeding in respect
thereof), joint or several, to which such Company Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, expense, liability, action,
investigation or proceeding arises out of or is based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, any Issuer Free
Writing Prospectus, any “issuer information” filed or required to be filed pursuant to Rule 433(d)
of the Rules and Regulations, any Registration Statement or the Prospectus, or in any amendment or
supplement thereto, or (ii) the omission or alleged omission to state in any Preliminary
Prospectus, any Issuer Free Writing Prospectus, any “issuer information” filed or required to be
filed pursuant to Rule 433(d) of the Rules and Regulations, any Registration Statement or the
Prospectus, or in any amendment or supplement thereto, a material fact required to be stated
therein or necessary to make the statements therein not misleading, but in each case only to the
extent that the untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to the Company by the
Underwriter specifically for use therein, which information the parties hereto agree is limited to
the Underwriter’s Information as defined in Section 17, and shall reimburse the Company
promptly upon demand for any legal or other expenses reasonably incurred by such party in
connection with investigating or preparing to defend or defending against or appearing as third
party witness in connection with any such loss, claim, damage, liability, action, investigation or
proceeding, as such fees and expenses are incurred. This indemnity agreement is not exclusive and
will be in addition to any liability, which the Underwriter might otherwise have and shall not
limit any rights or remedies which may otherwise be available at law or in equity to each Company
Indemnified Party.
26
Notwithstanding the provisions of this Section 7(b), in no event shall any indemnity by the
Underwriter under this Section 7(b) exceed the total discount and commission received by
such Underwriter in connection with this Offering.
(c) Promptly after receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, the indemnified party shall, if a claim in respect thereof is to be
made against an indemnifying party under this Section 7, notify such indemnifying party in
writing of the commencement of that action; provided, however, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have under this Section
7 except to the extent it has been materially prejudiced by such failure; and, provided,
further, that the failure to notify an indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 7. If any such
action shall be brought against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume the defense of such
action with counsel reasonably satisfactory to the indemnified party (which counsel shall not,
except with the written consent of the indemnified party, be counsel to the indemnifying party).
After notice from the indemnifying party to the indemnified party of its election to assume the
defense of such action, except as provided herein, the indemnifying party shall not be liable to
the indemnified party under Section 7 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense of such action other than reasonable costs
of investigation; provided, however, that any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense of such action but the fees
and expenses of such counsel (other than reasonable costs of investigation) shall be at the expense
of such indemnified party unless (i) the employment thereof has been specifically authorized in
writing by the Company in the case of a claim for indemnification under Section 7(a) or
Section 2.4 or the Underwriter in the case of a claim for indemnification under Section
7(b), (ii) such indemnified party shall have been advised by its counsel that there may be one
or more legal defenses available to it which are different from or additional to those available to
the indemnifying party, or (iii) the indemnifying party has failed to assume the defense of such
action and employ counsel reasonably satisfactory to the indemnified party within a reasonable
period of time after notice of the commencement of the action or the indemnifying party does not
diligently defend the action after assumption of the defense, in which case, if such indemnified
party notifies the indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the right to assume the
defense of (or, in the case of a failure to diligently defend the action after assumption of the
defense, to continue to defend) such action on behalf of such indemnified party and the
indemnifying party shall be responsible for legal or other expenses subsequently incurred by such
indemnified party in connection with the defense of such action; provided, however, that the
indemnifying party shall not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties (in addition to any local counsel), which
firm shall be designated in writing by LCM if the indemnified parties under this Section 7
consist of the Underwriter Indemnified Party or by the Company if the indemnified parties under
this Section 7 consist of any Company Indemnified Parties. Subject to this Section
7(c), the amount payable by an indemnifying party
27
under Section 7 shall include, but not be limited to, (x) reasonable legal fees and
expenses of counsel to the indemnified party and any other expenses in investigating, or preparing
to defend or defending against, or appearing as a third party witness in respect of, or otherwise
incurred in connection with, any action, investigation, proceeding or claim, and (y) all amounts
paid in settlement of any of the foregoing. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry of judgment with
respect to any pending or threatened action or any claim whatsoever, in respect of which
indemnification or contribution could be sought under this Section 7 (whether or not the
indemnified parties are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party in form and substance
reasonably satisfactory to such indemnified party from all liability arising out of such action or
claim 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 any indemnified party. Subject to the provisions of the following
sentence, no indemnifying party shall be liable for settlement of any pending or threatened action
or any claim whatsoever that is effected without its written consent (which consent shall not be
unreasonably withheld or delayed), but if settled with its written consent, if its consent has been
unreasonably withheld or delayed or if there be a judgment for the plaintiff in any such matter,
the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against
any loss or liability by reason of such settlement or judgment. In addition, if at any time an
indemnified party shall have requested that an indemnifying party reimburse the indemnified party
for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated herein effected without its written consent if (i) such
settlement is entered into more than forty-five (45) days after receipt by such indemnifying party
of the request for reimbursement, (ii) such indemnifying party shall have received notice of the
terms of such settlement at least thirty (30) days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
(d) If the indemnification provided for in this Section 7 is unavailable or insufficient to
hold harmless an indemnified party under Section 7(a) or Section 7(b), then each
indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid, payable or otherwise incurred by such indemnified party as a result of such loss, claim,
damage, expense or liability (or any action, investigation or proceeding in respect thereof), as
incurred, (i) in such proportion as shall be appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriter on the other hand from the offering of the
Shares, or (ii) if the allocation provided by clause (i) of this Section 7(d) is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) of this Section 7(d) but also the relative fault of the
Company on the one hand and the Underwriter on the other with respect to the statements, omissions,
acts or failures to act which resulted in such loss, claim, damage, expense or liability (or any
action, investigation or proceeding in respect thereof) as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand and the Underwriter
on the other with respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Shares purchased under this Agreement (before deducting
expenses) received by the Company bear to the underwriting discount and commission received by the
Underwriter in connection with the Offering, in each
28
case as set forth in the table on the cover page of the Prospectus. The relative fault of the
Company on the one hand and the Underwriter on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the Company on the one
hand or the Underwriter on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue statement, omission, act or
failure to act; provided that the parties hereto agree that the written information furnished to
the Company by the Underwriter for use in any Preliminary Prospectus, any Registration Statement or
the Prospectus, or in any amendment or supplement thereto, consists solely of the Underwriter’s
Information as defined in Section 17. The Company and the Underwriter 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 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, damage, expense, liability, action, investigation
or proceeding 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, preparing to defend or defending against or
appearing as a third party witness in respect of, or otherwise incurred in connection with, any
such loss, claim, damage, expense, liability, action, investigation or proceeding. Notwithstanding
the provisions of this Section 7(d), the Underwriter shall not be required to contribute
any amount in excess of the discount and commission received by the Underwriter in accordance with
the Offering less the amount of any damages which the Underwriter has otherwise paid or become
liable to pay by reason of any untrue or alleged untrue statement, omission or alleged omission,
act or alleged act or failure to act or alleged failure to act. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent misrepresentation.
8. Termination. The obligations of the Underwriter hereunder may be terminated by
the Underwriter, in its absolute discretion by notice given to the Company prior to delivery of and
payment for the Shares if, prior to that time, any of the events described in Sections 6(l),
6(m), 6(n) or 6(o) have occurred or if the Underwriter shall decline to purchase the Shares for
any reason permitted under this Agreement.
9. Reimbursement of Underwriter’s Expenses. Notwithstanding anything to the
contrary in this Agreement, if (a) this Agreement shall have been terminated pursuant to
Section 8, (b) the Company shall fail to tender the Firm Shares or the Additional Shares,
as the case may be, for delivery to the Underwriter for any reason not permitted under this
Agreement, (c) the Underwriter shall decline to purchase the Firm Shares or the Additional Shares,
as the case may be, for any reason permitted under this Agreement or (d) the sale of the Shares is
not consummated because any condition to the obligations of the Underwriter set forth herein or is
not satisfied because of the refusal, inability or failure on the part of the Company to perform
any agreement herein or to satisfy any condition or to comply with the provisions hereof, then in
addition to the payment of amounts in accordance with Section 5, the Company shall
reimburse the Underwriter for the fees and expenses of the Underwriter’s counsel and for such other
accountable out-of-pocket expenses as shall have been reasonably incurred by them in connection
with this Agreement and the proposed purchase of the Firm
29
Shares or the Additional Shares, as the case may be, and upon demand the Company shall pay the full
amount thereof to the Underwriter.
10. Effectiveness. This Agreement shall become effective upon the execution and
delivery hereof by the parties hereto.
11. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) the Underwriter’s responsibility to the Company is solely contractual in nature, the
Underwriter have been retained solely to act as Underwriter in connection with the Offering and no
fiduciary, advisory or agency relationship between the Company and the Underwriter has been created
in respect of any of the transactions contemplated by this Agreement, irrespective of whether the
Underwriter or Lazard Frères & Co. LLC have advised or are advising the Company on other matters;
(b) the price of the Shares set forth in this Agreement was established by the Company following
discussions and arms-length negotiations with the Underwriter, and the Company is capable of
evaluating and understanding, and understands and accepts, the terms, risks and conditions of the
transactions contemplated by this Agreement;
(c) it has been advised that the Underwriter and Lazard Frères & Co. LLC and their affiliates are
engaged in a broad range of transactions which may involve interests that differ from those of the
Company and that the Underwriter have no obligation to disclose such interests and transactions to
the Company by virtue of any fiduciary, advisory or agency relationship; and
(d) it waives, to the fullest extent permitted by law, any claims it may have against the
Underwriter for breach of fiduciary duty or alleged breach of fiduciary duty and agrees that the
Underwriter shall have no liability (whether direct or indirect) to the Company in respect of such
a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right
of the Company, including stockholders, employees or creditors of the Company.
12. Successors; Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriter, the Company, and their respective
successors and assigns. This Agreement shall also inure to the benefit of Lazard Frères & Co. LLC
and each of its successors and assigns, which shall be third party beneficiaries hereof. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to give any person,
other than the persons mentioned in the preceding sentences, any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company contained in this Agreement shall
also be for the benefit of the Underwriter Indemnified Parties and the indemnities of the
Underwriter shall be for the benefit of the Company Indemnified Parties. It is understood that the
Underwriter’s responsibility to the Company is solely contractual in nature and the Underwriter do
not owe the Company, or any other party, any fiduciary duty as a result of this Agreement.
30
13. Survival of Indemnities, Representations, Warranties, Etc. The respective
indemnities, covenants, agreements, representations, warranties and other statements of the Company
and the Underwriter, as set forth in this Agreement or made by them respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any investigation made by or on
behalf of the Underwriter, the Company or any person controlling any of them and shall survive
delivery of and payment for the Shares. Notwithstanding any termination of this Agreement,
including without limitation any termination pursuant to Sections 8, the indemnity and
contribution agreements contained in Section 7 and the covenants, representations,
warranties set forth in this Agreement shall not terminate and shall remain in full force and
effect at all times.
14. Notices. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Underwriter, shall be delivered or sent by mail, facsimile transmission or overnight
courier to Lazard Capital Markets LLC, Attention: General Counsel, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Fax: 212-830- 3615; and
(b) if to the Company, shall be delivered or sent by mail, facsimile transmission or overnight
courier to GTx, Inc., Attention: Xxxxx X. Xxxxxxxx, Vice President and General Counsel, 000 Xxxxxx
Xxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxxxx 00000, Fax: 000.000.0000, with a copy (which shall not
constitute notice hereunder) to Xxxxxx LLP, 0000 Xxxxxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000,
Attention: Xxxxxxx Xxxxxxxx Xxxxxx, Esq., Fax: 000-000-0000.
provided, however, that any notice to the Underwriter pursuant to Section 7 shall be
delivered or sent by mail, telex or facsimile transmission to the Underwriter at its address set
forth in its acceptance telex to the Underwriter, which address will be supplied to any other party
hereto by the Underwriter upon request. Any such statements, requests, notices or agreements shall
take effect at the time of receipt thereof, except that any such statement, request, notice or
agreement delivered or sent by email shall take effect at the time of confirmation of receipt
thereof by the recipient thereof.
15. Definition of Certain Terms. For purposes of this Agreement, (a) “business
day” means any day on which the New York Stock Exchange, Inc. is open for trading and (b)
“knowledge” means the knowledge of the directors and executive officers of the Company after
reasonable inquiry.
16. Governing Law, Agent for Service and Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York, including without
limitation Section 5-1401 of the New York General Obligations Law. No legal proceeding may be
commenced, prosecuted or continued in any court other than the courts of the State of New York
located in the City and County of New York or in the United States District Court for the Southern
District of New York, which courts shall have jurisdiction over the adjudication of such matters,
and the Company and the Underwriter each hereby consent to the jurisdiction of such courts and
personal service with respect thereto. The Company and the Underwriter each hereby waive all right
to trial by jury in any legal proceeding (whether based upon contract, tort or otherwise) in any
way arising out of or relating to this Agreement. The
31
Company agrees that a final judgment in any such legal proceeding brought in any such court shall
be conclusive and binding upon the Company and the Underwriter and may be enforced in any other
courts in the jurisdiction of which the Company is or may be subject, by suit upon such judgment.
17. Underwriter’s Information. The parties hereto acknowledge and agree that, for
all purposes of this Agreement, the Underwriter’s Information consists solely of the following
information in the Prospectus: (i) the second to last paragraph on the front cover page concerning
the terms of the offering by the Underwriter; and (ii) the statements concerning the Underwriter
contained in the first paragraph, concerning the Underwriter and Lazard Frères & Co. LLC in the
seventh paragraph, concerning stabilization by the Underwriter in the twelfth paragraph, and
concerning electronic distributions in the thirteenth paragraph, in each case under the heading
“Underwriting.”
18. Partial Unenforceability. The invalidity or unenforceability of any section,
paragraph, clause or provision of this Agreement shall not affect the validity or enforceability of
any other section, paragraph, clause or provision hereof. If any section, paragraph, clause or
provision of this Agreement is for any reason determined to be invalid or unenforceable, there
shall be deemed to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
19. General. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof. In this Agreement, the
masculine, feminine and neuter genders and the singular and the plural include one another. The
section headings in this Agreement are for the convenience of the parties only and will not affect
the construction or interpretation of this Agreement. This Agreement may be amended or modified,
and the observance of any term of this Agreement may be waived, only by a writing signed by the
Company and the Underwriter.
20. Research Analyst Independence. The Company acknowledges that the
Underwriter’s research analysts and research departments are required to be independent from its
investment banking division and are subject to certain regulations and internal policies, and that
such Underwriter’s research analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the Company and/or the offering
that differ from the views of its investment banking division. The Company acknowledges that the
Underwriter is a full service securities firm and as such from time to time, subject to applicable
securities laws, rules and regulations, may effect transactions for its own account or the account
of its customers and hold long or short positions in debt or equity securities of the Company;
provided, however, that nothing in this Section 20 shall relieve the Underwriter of any
responsibility or liability it may otherwise bear in connection with activities in violation of
applicable securities laws, rules or regulations.
21. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures thereto and hereto
were upon the same instrument and such signatures may be delivered by facsimile or by e-mail
delivery of .pdf format data file.
32
If the foregoing is in accordance with your understanding of the agreement between the Company
and the Underwriter, kindly indicate your acceptance in the space provided for that purpose below.
| Very truly yours, GTx, INC. |
||||
| By: | /s/ Xxxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxxx X. Xxxxxxx, M.D., F.A.C.S. | |||
| Title: | Chief Executive Officer | |||
Accepted as of the date first
above written:
above written:
LAZARD CAPITAL MARKETS LLC
By:
|
/s/ Xxxxx X. XxXxxxxx, Xx. | |||
| Name: Xxxxx X. XxXxxxxx, Xx. | ||||
| Title: Managing Director |
33
SCHEDULE A
Orally Conveyed Pricing Information:
Number of
Firm Shares: 14,285,715 Shares
Number of Additional Shares: 2,142,857 Shares
Public Offering Price: $2.80 per Share
Underwriting Discounts and Commissions: 5.0%
Estimated Net Proceeds to the Company: $37.6 million
SCHEDULE B
General Use Free Writing Prospectuses
None
SCHEDULE C
| OFFICERS | DIRECTORS | |
Xxxxx Xxxxxxx, MD, F.A.C.S, CEO
|
J.R. Hyde, III, Chairman | |
Xxxx Xxxxxxx, President & COO
|
Xxxxx Xxxxxxx, MD, F.A.C.S, CEO | |
Xxx Xxxxxx, PhD, VP, Preclinical R&D
|
Xxxx Xxxxxxx, President & COO | |
Xxxx Xxxxxx, VP, Sales and Marketing
|
Xxxxxx Xxxx, MD | |
Xxxxxx X. Xxxxxx, Xx., MD
|
Xxxxxxx X. X. Xxxx | |
F.A.C.S., CMO |
||
Xxxxx Xxxxxxxx, VP General Counsel
|
Xxxxxxx X. Xxxxxxxx, MD, M.Div. | |
Xxxx Xxxxxxxxx, VP, CFO
|
Xxxx X.. Xxxxxxx | |
| J. Xxxxxxx Xxxxx | ||
| Xxxxxxx X. Xxxxxx, MD |
EXHIBIT A
Form of Lock-Up Agreement
October 27, 2010
Lazard Capital Markets LLC
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxx Xxxx, Xxx Xxxx 00000
Re: GTx, Inc. Public Offering of Common Stock
Dear Sirs:
In order to induce Lazard Capital Markets LLC (“LCM”), to enter in to a certain Underwriting
Agreement with GTx, Inc. a Delaware corporation (the “Company”), with respect to the public
offering of shares of the Company’s Common Stock, par value $0.001 per share (“Common Stock”), the
undersigned hereby agrees that for a period (the “lock-up period”) of ninety (90) days following
the date of the final prospectus supplement filed by the Company with the Securities and Exchange
Commission in connection with such public offering (the “Prospectus”), the undersigned will not,
without the prior written consent of LCM, directly or indirectly, (i) offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of, any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common Stock (including, without
limitation, shares of Common Stock or any such securities which may be deemed to be beneficially
owned by the undersigned in accordance with the rules and regulations promulgated under the
Securities Act of 1933, as the same may be amended or supplemented from time to time (such shares
or securities, the “Beneficially Owned Shares”)), (ii) enter into any swap, hedge or other
agreement or arrangement that transfers in whole or in part, the economic risk of ownership of any
Beneficially Owned Shares, Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock, or (iii) engage in any short selling of any Beneficially Owned
Shares, Common Stock or securities convertible into or exercisable or exchangeable for Common
Stock.
If (i) the Company issues an earnings release or material news or a material event relating to
the Company occurs during the last seventeen (17) days of the lock-up period, or (ii) prior to the
expiration of the lock-up period, the Company announces that it will release earnings results
during the sixteen (16)-day period beginning on the last day of the lock-up period, the
restrictions imposed by this Agreement shall continue to apply until the expiration of the eighteen
(18)-day period beginning on the issuance of the earnings release or the occurrence of the material
news or material event.
Notwithstanding the foregoing, the foregoing restrictions shall not in any event apply to
transfers of shares of Common Stock or Beneficially Owned Shares (i) as a bona fide gift or gifts
or pledge, provided that the undersigned provides prior written notice of such gift or gifts or
pledge to LCM and the donee or donees or pledgee or pledgees (as the case may be) thereof
agree to be bound by the restrictions set forth herein, (ii) either during the undersigned’s
lifetime or on death by will or intestacy to the undersigned’s immediate family or to a trust, the
beneficiaries of which are exclusively the undersigned and a member or members of the undersigned’s
immediate family, provided that the transferee thereof agrees to be bound by the restrictions set
forth herein, (iii) to the undersigned and/or any member of the immediate family of the undersigned
from or by a grantor retained (or like-kind) annuity trust which exists as of the date hereof and
was established for the direct or indirect benefit of the undersigned and/or any member of the
immediate family of the undersigned pursuant to the terms of such trust, (iv) in the event of a
default under a pledge which exists as of the date hereof as security for a margin or loan account
pursuant to the terms of such account, (v) pursuant to any 10b-5(1) trading plans in effect as of
the date of the date of the Offering, (vi) from and after the date that is forty-five (45) days
following the date of the Prospectus, in open market sales of up to, in the aggregate, 10,000
shares of Common Stock, or (vii) with the prior written consent of LCM. In addition, if the
undersigned is a partnership, limited liability company, trust, corporation or similar entity, it
may distribute the Common Stock or Beneficially Owned Shares to its partners, members or
stockholders; provided, however, that in each such case, prior to any such transfer, each
transferee shall execute a duplicate form of this letter agreement (the “Lock-Up Agreement”) or
execute an agreement, reasonably satisfactory to LCM, pursuant to which each transferee shall agree
to receive and hold such Common Stock or Beneficially Owned Shares subject to the provisions
hereof, and there shall be no further transfer except in accordance with the provisions hereof. For
the purposes of this paragraph, “immediate family” shall mean spouse, domestic partner, lineal
descendant (including adopted children), father, mother, brother or sister of the transferor.
In addition, the undersigned hereby waives, from the date hereof until the expiration of the
ninety (90) day period following the date of the Prospectus, any and all rights, if any, to request
or demand registration pursuant to the Securities Act of 1933, as amended, of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for Common Stock that are
registered in the name of the undersigned or that are Beneficially Owned Shares. In order to enable
the aforesaid covenants to be enforced, the undersigned hereby consents to the placing of legends
and/or stop-transfer orders with the transfer agent of the Common Stock with respect to any shares
of Common Stock, securities convertible into or exercisable or exchangeable for Common Stock or
Beneficially Owned Shares.
| [Signatory] |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
2
