3,799,600 Shares GTX, INC. Common Stock PLACEMENT AGENT AGREEMENT
Exhibit 1.1
3,799,600 Shares
GTX, INC.
Common Stock
December 13, 2006
Lazard Capital Markets LLC
▇▇▇▇▇ and Company, LLC
c/o Lazard Capital Markets LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ and Company, LLC
c/o Lazard Capital Markets LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
1. Introduction. GTx, Inc., a Delaware corporation (the “Company”), proposes to
issue and sell to the purchasers, pursuant to the terms of this Placement Agent Agreement (this
“Agreement”) and the Subscription Agreements in the form of Exhibit A attached hereto (the
“Subscription Agreements”) entered into with the purchasers identified therein (each a “Purchaser”
and collectively, the “Purchasers”), up to an aggregate of 3,799,600 shares of common stock, $0.001
par value per share (the “Common Stock”) of the Company. The aggregate of 3,799,600 shares so
proposed to be sold is hereinafter referred to as the “Stock.” The Company hereby confirms its
agreement with Lazard Capital Markets LLC (“LCM”), and ▇▇▇▇▇ and Company, LLC (“Co-Agent”), and
together with LCM, the “Placement Agents”) to act as Placement Agents in accordance with the terms
and conditions hereof. LCM is acting as the representative of the Placement Agents and in such
capacity is hereinafter referred to as the “Representative.”
2. Agreement to Act as Placement Agents; Placement of Securities. On the basis of
the representations, warranties and agreements of the Company herein contained, and subject to all
the terms and conditions of this Agreement:
2.1 The Company hereby authorizes the Placement Agents to act as its exclusive agents to
solicit offers for the purchase of all or part of the Stock from the Company in connection with
the proposed offering of the Stock (the “Offering”). Until the Closing Date (as defined in
Section 4 hereof), the Company shall not, without the prior written consent of the
Representative, solicit or accept offers to purchase Stock otherwise than through the Placement
Agents. LCM may utilize the expertise of Lazard Frères & Co. LLC in connection with LCM’s
placement agent activities.
2.2 The Placement Agents agree, as agents of the Company, to use their best efforts to
solicit offers to purchase the Stock from the Company on the terms and subject to the conditions
set forth in the Prospectus (as defined below). The Placement Agents shall use commercially
reasonable efforts to assist the Company in obtaining performance by each Purchaser whose offer
to purchase Stock has been solicited by the Placement Agents and accepted by the Company, but
the
Placement Agents shall not, except as otherwise provided in this Agreement, be obligated to
disclose the identity of any potential purchaser or have any liability to the Company in the
event any such purchase is not consummated for any reason. Under no circumstances will the
Placement Agents be obligated to underwrite or purchase any Stock for their own accounts and, in
soliciting purchases of Stock, the Placement Agents shall act solely as the Company’s agents and
not as principals. Notwithstanding the foregoing and except as otherwise provided in
Section 2.3, it is understood and agreed that the Placement Agents (or their affiliates)
may, solely at their discretion and without any obligation to do so, purchase Stock as
principals.
2.3 Subject to the provisions of this Section 2, offers for the purchase of Stock
may be solicited by the Placement Agents as agents for the Company at such times and in such
amounts as the Placement Agents deem advisable. Each Placement Agent shall communicate to the
Company, orally or in writing, each reasonable offer to purchase Stock received by it as agent
of the Company. The Company shall have the sole right to accept offers to purchase the Stock
and may reject any such offer, in whole or in part. Each Placement Agent shall have the right,
in its discretion reasonably exercised, without notice to the Company, to reject any offer to
purchase Stock received by it, in whole or in part, and any such rejection shall not be deemed a
breach of its agreement contained herein.
2.4 The Stock is being sold to the Purchasers at a price of $16.00 per share. The
purchases of the Stock by the Purchasers shall be evidenced by the execution of Subscription
Agreements by each of the Purchasers and the Company.
2.5 As compensation for services rendered, on the Closing Date (as defined in Section
4 hereof) the Company shall pay to the Placement Agents by wire transfer of immediately
available funds to an account or accounts designated by the Representative, an amount equal to
five percent (5%) of the gross proceeds received by the Company from the sale of the Stock on
such Closing Date.
2.6 No Stock 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 Stock shall have
been delivered to the Purchaser thereof against payment by such Purchaser. If the Company shall
default in its obligations to deliver Stock to a Purchaser whose offer it has accepted, the
Company shall indemnify and hold the Placement Agents 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 8(c) herein.
3. Representations and Warranties of the Company. The Company represents and
warrants to, and agrees with, the Placement Agents and the Purchasers that:
(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. 333-127175), which became effective as of August 17, 2005 (the “Effective
Date”), including a base prospectus relating to the Stock (the “Base Prospectus”), and such
amendments and supplements thereto as may have been required 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 under the Securities Act), 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, to the best knowledge of the Company, instituted or are
threatened by the Commission. The Company, if
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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 Representative by the Company for use in connection with the offering and sale of the
Stock 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
any Placement Agent for such use. Any preliminary prospectus or prospectus subject to
completion included in the Registration Statement or filed with the Commission pursuant to
Rule 424 under the Securities Act 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. If the Company has filed
an abbreviated registration statement to register additional Stock pursuant to Rule 462(b)
under the Rules (the “462(b) Registration Statement”), then any reference herein to the
Registration Statement shall also be deemed to include such 462(b) Registration Statement.
(b) As of the Applicable Time (as defined below) and as of the Closing Date, neither
(i) any General Use Free Writing Prospectus (as defined below) issued at or prior to the
Applicable Time, and the Pricing Prospectus (as defined below) and the information included
on Schedule A hereto, all considered together (collectively, the “General Disclosure
Package”), nor (ii) any individual Limited Use Free Writing Prospectus (as defined below),
if any, issued prior to the Effective Time, 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 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, in
reliance upon, and in conformity with, written information furnished to the Company through
the Representative by or on behalf of any Placement Agent specifically for inclusion
therein, which information the parties hereto agree is limited to the Placement Agents’
Information (as defined in Section 18). As used in this paragraph (b) and
elsewhere in this Agreement:
“Applicable Time” means 3:50 P.M., New York time, on the date of this Agreement.
“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 and any prospectus supplement deemed to be a part thereof.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in
Rule 433 under the Securities Act relating to the Stock in the form filed or required to be
filed with the
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Commission or, if not required to be filed, in the form retained in the Company’s records
pursuant to Rule 433(g) under the Securities Act.
“General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
identified on Schedule A to this Agreement.
“Limited Use Free Writing Prospectuses” means any Issuer Free Writing Prospectus that is not
a General Use Free Writing Prospectus.
(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, to the best knowledge of the Company, instituted or 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 through
the Representative by or on behalf of any Placement Agent specifically for inclusion
therein, which information the parties hereto agree is limited to the Placement Agents’
Information (as defined in Section 18).
(d) At the time the Registration Statement became effective, at the date of this
Agreement and at the Closing Date, the Registration Statement 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; the Prospectus, at the time the Prospectus was issued and at the
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 in reliance upon, and in conformity with, written
information furnished to the Company through the Representative by or on behalf of any
Placement Agent specifically for inclusion therein, which information the parties hereto
agree is limited to the Placement Agents’ Information (as defined in Section 18).
(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 Stock or until
any earlier date that the Company notified or notifies the Representative as described in
Section 5(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 through the Representative by
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or on behalf of any Placement Agent specifically for inclusion therein, which
information the parties hereto agree is limited to the Placement Agents’ Information (as
defined in Section 18).
(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.
(g) 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 5(b) below. The Company will file with the Commission all
Issuer Free Writing Prospectuses, if any, in the time and manner required under Rule 433(d)
under the Securities Act.
(h) The Company has the full right, power and authority to enter into this Agreement,
each of the Subscription Agreements and that certain Escrow Agreement (the “Escrow
Agreement”) dated as of the date hereof by and among the Company, the Placement Agents and
the escrow agent named therein, and to perform and to discharge its obligations hereunder
and thereunder; and each of this Agreement, the Escrow Agreement and each of the
Subscription Agreements 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(g) 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 National Association of Securities Dealers, Inc.
(“NASD”) 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 Stock on the Nasdaq GM.
(k) No approval of the shareholders of the Company under the rules and regulations of
Nasdaq (including Rule 4350 of the Nasdaq Marketplace Rules) is required for the Company to
issue and deliver to the Purchasers the Stock.
(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
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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 options to purchase an aggregate of not
more than 100,000 shares of common stock pursuant to the Company’s current stock option
plans, the annual grant of stock options to key employees in accordance with the Company’s
past practice and the cancellation or exercise of stock options 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, stockholders’ equity or
results of operations of the Company (“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 Stock to be issued and sold by the Company to the Purchasers hereunder and
under the Subscription Agreements has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein and the Subscription Agreements, will
be duly and validly issued, fully paid and nonassessable and free of any preemptive or
similar rights and will conform to the description thereof contained in the Prospectus and
General Disclosure Package.
(r) The issue and sale of the Stock by the Company and the compliance by the Company
with all of the provisions of this Agreement, the Subscription Agreements and the Escrow
Agreement, and the consummation of the transactions contemplated herein and therein 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 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,
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order, registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Stock or the consummation by the Company
of the transactions contemplated by this Agreement, the Subscription Agreements and the
Escrow 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 Stock.
(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) 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 Stock,
and the statements set forth in the Prospectus under the caption “Plan of Distribution”, the
statements incorporated by reference into the Prospectus from the Company’s Annual Report on
Form 10-K for the year ended December 31, 2005 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 — Acapodene, — Andarine for the
Treatment of Cancer Weight Loss, — Fareston and — Orion Agreement,” “Risk Factors — Risks
Related to Our Dependence on Third Parties — If third parties do not manufacture our
product candidates in sufficient quantities and at an acceptable cost, clinical development
and commercialization of our product candidates would be delayed, and — We are dependent
on our collaborative arrangement with Ipsen to develop and commercialize ACAPODENE® in the
European Territory. 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, Risks Related to Our Intellectual Property — 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 Acapodene for human uses of
toremifene outside the United States, — If some or all of our, or our licensors’, patents
expire or are invalidated or are found to be unenforceable, or if some or all of our patent
applications do not yield issued patents or yield patents with narrow claims, or if we are
estopped 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, and — Off-label sale or use
of toremifene products could decrease our sales of Acapodene 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 are developing Acapodene, — Risks Related to
Commercialization — If we are unable to obtain adequate coverage and reimbursement from
third-party payors for products we sell at acceptable prices, 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 — A significant portion of
our total outstanding shares are restricted from immediate resale but may be sold into the
market in the near future. This could cause the market price of our common stock to drop
significantly, 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.
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(u) 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.
(v) The Company is not and, after giving effect to the offering and sale of the Stock,
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.
(w) 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.
(x) Ernst & Young LLP, who have certified 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 and management’s assessment thereof, 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).
(y) The financial statements of the Company (together with the related notes thereto)
included or incorporated by reference in the Registration Statement, Prospectus and the
General Disclosure Package as amended or supplemented (i) fairly present 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 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.
(z) 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
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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.
(aa) 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 and its subsidiaries 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.
(bb) The Company is in compliance in all material respects with all applicable
provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations promulgated by
the Commission thereunder.
(cc) 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 is 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 “Overview”
from the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September
30, 2006 (the “Product Candidates”) (such rights are referred to herein collectively as the
“Company Intellectual Property”); the Company owns or possesses licenses or other rights to
the patents and patent applications set forth on the schedule provided to the Placement
Agents on the date hereof (the “Patent Schedule”) (the patents and patent applications set
forth on the Patent Schedule that disclose or claim the Product Candidates are referred to
herein collectively as the “Company Patents”) that is necessary or used in the conduct of
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; with respect to
Product Candidates, the Company has exclusive rights to develop, market and commercialize as
disclosed in the Registration Statement, the General Disclosure Package and the Prospectus
as amended or supplemented; none of the issued patents within the Company Patents is
unenforceable or invalid and to the Company’s knowledge, none of the patent applications
within Company Patents if issued would be unenforceable or invalid; nor is any material fact
known by the Company with respect to such 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 Product Candidates 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 Product Candidates disclosed and claimed in
the Company Patents or 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
9
any, threatened, actions, suits, proceedings, claims or allegations by others that the
Company is or will be infringing any patent, trade secret, trademark, service ▇▇▇▇,
copyright or other proprietary intellectual property rights through the manufacture, use or
sale of any Product Candidates; the manufacture, use or sale of the products, including
Product Candidates, 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 or supplemented does not, and to the Company’s
knowledge, will not, infringe or conflict with any patent of any third party in a manner
which could reasonably be expected to have a Material Adverse Effect; to the Company’s
knowledge, the patents and patent applications within Company Patents cover the Product
Candidates and are patentable; the Company has not been notified of any 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 inventorship challenge or interference proceeding with respect to
such patents and patent applications; 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; 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
Candidate other than Acapodene, 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 Candidate 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 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 contracts or other documents material to
the Company’s patents, trade secrets, trademarks, service marks, copyrights or other
proprietary information or materials 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 Escrow Agreement or any Subscription 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.
(dd) 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
10
Patents; the Company, the University of Tennessee Research Foundation (“UTRF”) and
Orion 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; the
Company, UTRF and Orion are similarly listed in the records of corresponding foreign
agencies with respect to the foreign counterparts of the Company Patents; except for the
rights of UTRF, Orion and The Ohio State University (“OSU”) 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 other than Acapodene 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
are described in the Registration Statement, the General Disclosure Package and the
Prospectus as being under development.
(ee) 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.
(ff) 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.
(gg) 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
11
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.
(hh) 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.
(ii) 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 Stock 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.
(jj) 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 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
12
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.
(kk) 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.
(ll) 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.
(mm) 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.
(nn) 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.
Any certificate signed by or on behalf of the Company and delivered to the Placement Agents or to
counsel for the Placement Agents shall be deemed to be a representation and warranty by the Company
to the Placement Agents and the Purchasers as to the matters covered thereby.
4. The Closing. The time and date of closing and delivery of the documents required
to be delivered to the Placement Agents pursuant to Sections 5 and 7 hereof shall
be at 10:00 A.M., New York time, on December 18, 2006 (the “Closing Date”) at the office of Cooley
Godward Kronish LLP, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
5.
FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the Placement Agents
and the Purchasers:
(a) To prepare the Rule 462(b) Registration Statement, if necessary, in a form approved
by the Representative and file such Rule 462(b) Registration Statement with the Commission
on the date hereof; to prepare the Prospectus in a form approved by the Representative
containing information previously omitted at the time of effectiveness of the Registration
Statement in reliance on rules 430A, 430B and 430C and to file such Prospectus pursuant to
Rule 424(b) under the Securities Act not later than the second business (2nd) day
13
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
Representative 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 Representative within
an amount of time that is reasonably practical to review under the circumstances and prior
to filing; to advise the Representative, 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 Representative copies
thereof; to file promptly all material required to be filed by the Company with the
Commission pursuant to Rule 433(d), 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 Stock; to advise the Representative, 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 Stock
for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement, 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, unless it obtains the prior consent of the
Representative, and each Placement Agent represents and agrees that, unless it obtains the
prior consent of the Representative and the Company, it has not made and will not, make any
offer relating to the Stock that would constitute a “free writing prospectus” as defined in
Rule 405 under the Securities Act unless the prior written consent of the Representative has
been received (each, a “Permitted Free Writing Prospectus”); provided that the prior written
consent of the Representative hereto shall be deemed to have been given in respect of the
Issuer Free Writing Prospectus included in Schedule A 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 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 any Placement Agent 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 such Placement Agent that such Placement
Agent otherwise would not have been required to file thereunder.
(c) If at any time when a Prospectus relating to the Stock 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
14
Prospectus to comply with the Securities Act or the Exchange Act, the Company will
promptly notify the Representative, and upon the Representative’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 Placement Agents,
without charge, such number of copies thereof as the Placement Agents may reasonably
request. The Company consents to the use of the Prospectus or any amendment or supplement
thereto by the Placement Agents.
(d) If the General Disclosure Package is being used to solicit offers to buy the Stock
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 Representative, it becomes necessary to amend or supplement the General
Disclosure Package in order to make the statements therein, in the light of the
circumstances then prevailing, 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
Placement Agents 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 then prevailing, 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 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 prevailing at the subsequent time, not misleading, the Company has promptly
notified or will promptly notify the Representative (and the Representative and Placement
Agents agree 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 Representative by or on behalf of any Placement Agent specifically for
inclusion therein, which information the parties hereto agree is limited to the Placement
Agents’ Information (as defined in Section 18).
(f) To the extent not available on the Commission’s ▇▇▇▇▇ system, to furnish promptly
to the Placement Agents and to counsel for the Placement Agents 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 ▇▇▇▇▇ system, to deliver promptly
to the Representative in New York City such number of the following documents as the
Representative shall reasonably request: (i) conformed copies of the Registration Statement
as originally filed with the Commission (in each case excluding exhibits), (ii) each
Preliminary
15
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 Representative may
reasonably request to qualify the Stock for offering and sale under the securities or Blue
Sky laws of such jurisdictions (domestic or foreign) as the Representative 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.
(j) To the extent not available on the Commission’s ▇▇▇▇▇ system, upon request, during
the period of five (5) years from the date hereof, to deliver to the Placement Agents, (i)
as soon as they are available, copies of all reports or other communications furnished to
shareholders, 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 Stock is 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 the Company’s sale of the Stock hereunder and the issuance of
restricted Common Stock or options to acquire Common Stock pursuant to the Company’s
employee benefit plans, qualified stock option plans 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 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,
director, shareholder, optionholder and warrantholder listed in Schedule B to
furnish to the Representative, prior to the Closing Date, a letter, substantially in the
form of Exhibit B 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
16
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 a registration statement on Form
S-8 relating to employee benefit plans. 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 period beginning on the issuance of the
earnings release or the occurrence of the material news or material event.
(l) To supply the Representative with copies of all correspondence to and from, and all
documents issued to and by, the Commission in connection with the registration of the Stock
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
Representative is notified), without the prior written consent of the Representative, unless
in the judgment of the Company and its counsel, and after notification to the
Representative, such press release or communication is required by law.
(n) Until the Representative shall have notified the Company of the completion of the
offering of the Stock, 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 Stock.
(o) To apply the net proceeds from the sale of the Stock 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 effect and maintain the quotation of the
Stock on the Nasdaq GM.
(q) To use reasonable efforts to assist the Representative with any filings with the
NASD and obtaining clearance from the NASD as to the amount of compensation allowable or
payable to the Placement Agents.
(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 to satisfy all
conditions precedent to the delivery of the Stock.
6. Payment of Expenses. The Company agrees to pay, or reimburse if paid by the
Placement Agents, whether or not the transactions contemplated hereby are consummated or this
Agreement is terminated: (a) the costs incident to the authorization, issuance, sale, preparation
and delivery of the Stock to the Purchasers and any taxes payable in that connection; (b) the costs
incident to the Registration of the Stock under the Securities Act; (c) the costs incident to the
preparation, printing
17
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 Placement Agents) incurred in connection with securing
any required review by the NASD of the terms of the sale of the Stock and any filings made with the
NASD; (e) any applicable listing, quotation or other fees; (f) the fees and expenses (including
related fees and expenses of counsel to the Placement Agents) of qualifying the Stock under the
securities laws of the several jurisdictions as provided in Section 5(k) and of preparing,
printing and distributing wrappers, Blue Sky Memoranda and Legal Investment Surveys; (g) the cost
of preparing and printing stock certificates; (h) all fees and expenses of the registrar and
transfer agent of the Stock; and (i) all other costs and expenses incident to the offering of the
Stock 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 Placement Agents on the Company’s behalf (which will be promptly reimbursed)); provided
that, except to the extent otherwise provided in this Section 6 and in Sections 8
and 10, the Placement Agents shall pay their own costs and expenses.
7. Conditions to the Obligations of the Placement Agents and the Purchasers, and the Sale
of the Stock. The respective obligations of the Placement Agents hereunder and the Purchasers
under the Subscription Agreements, and the Closing of the sale of the Stock, are subject to the
accuracy, when made and on the Applicable Time and on the 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 Representative; the Rule
462(b) Registration Statement, if any, 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 5(a), and the Rule 462(b) Registration Statement, if any,
shall have become effective immediately upon its filing with the Commission; and the NASD
shall have raised no objection to the fairness and reasonableness of the terms of this
Agreement or the transactions contemplated hereby.
(b) The Placement Agents shall not have discovered and disclosed to the Company on or
prior to the Closing Date that the Registration Statement or any amendment or supplement
thereto contains an untrue statement of a fact which, in the opinion of counsel for the
Placement Agent, 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.
18
(c) All corporate proceedings and other legal matters incident to the authorization,
form and validity of each of this Agreement, the Subscription Agreements, the Escrow
Agreement, the Stock, 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 Placement Agent, 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) ▇▇▇▇▇▇ Godward Kronish LLP shall have furnished to the Representative such
counsel’s written opinion and negative assurances statement, as counsel to the Company,
addressed to the Placement Agents and the Purchasers and dated the Closing Date, in form and
substance reasonably satisfactory to counsel to the Representative as of the date hereof.
(e) Bass, ▇▇▇▇▇ & ▇▇▇▇ PLC shall have furnished to the Representative such counsel’s
written opinion and negative assurances statement, as counsel to the Company, addressed to
the Placement Agents and the Purchasers and dated the Closing Date, in form and substance
reasonably satisfactory to the Representative.
(f) ▇▇▇▇▇ ▇▇▇▇▇ Zedek ▇▇▇▇▇▇ LLP shall have furnished to the Representative such
counsel’s written opinion and negative assurances statement, as special patent counsel to
the Company, addressed to the Placement Agents and the Purchasers and dated the Closing
Date, in form and substance reasonably satisfactory to the Representative.
(g) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP shall have furnished to the Representative such counsel’s
written opinion and negative assurances statement, as special regulatory counsel to the
Company, addressed to the Placement Agents and the Purchasers and dated the Closing Date, in
form and substance reasonably satisfactory to the Representative.
(h) The Representative shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇
LLP, co-counsel for the Placement Agents, a negative assurances statement, dated the Closing
Date, and the Company shall have furnished to such counsel such documents as they request
for enabling them to make such a statement.
(i) The Representative shall have received from ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Raysman & ▇▇▇▇▇▇▇
LLP, co-counsel for the Placement Agents, such opinion or opinions, dated the Closing Date,
with respect to such matters as the Representative 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.
(j) At the time of the execution of this Agreement, the Representative shall have
received from Ernst & Young LLP a letter, addressed to the Placement Agents and to the
Company’s Board of Directors, executed and dated such date, in form and substance reasonably
satisfactory to the Placement Agents (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 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.
(k) On the effective date of any post-effective amendment to any Registration Statement
and on the Closing Date, the Representative shall have received a letter (the “Bring-Down
Letter”) from Ernst & Young LLP addressed to the Placement Agents and to the Company’s Board
of Directors and dated the 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
19
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 Representative concurrently with the execution of this Agreement
pursuant to paragraph (j) of this Section 7.
(l) The Company shall have furnished to the Representative and the Purchasers a
certificate, dated the 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
Initial 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 unaudited
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.
(m) 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 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 (m), is, in the judgment of the
Representative, so material and adverse as to make it impracticable or inadvisable to
proceed with the sale or delivery of the Stock on the terms and in the manner contemplated
in the General Disclosure Package.
(n) 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 Stock 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 Stock or materially and adversely affect the business or
operations of the Company.
(o) 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.
20
(p) 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 American Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the over-the-counter market,
shall have been suspended or 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 Representative, impracticable or inadvisable to proceed with the sale or
delivery of the Stock on the terms and in the manner contemplated in the General Disclosure
Package and the Prospectus.
(q) The Representative shall have received the written agreements, substantially in the
form of Exhibit B hereto, of the executive officers, directors, shareholders,
optionholders and warrantholders of the Company listed in Schedule B to this
Agreement.
(r) The Company shall have entered into Subscription Agreements with each of the
Purchasers and such agreements shall be in full force and effect.
(s) The Company shall have entered into the Escrow Agreement and such agreement shall
be in full force and effect.
(t) The Representative shall have received clearance from the NASD as to the amount of
compensation allowable or payable to the Placement Agents as described in the Pricing
Prospectus.
(u) Prior to the Closing Date, the Company shall have furnished to the Representative
such further information, opinions, certificates, letters or documents as the Representative
shall have reasonably requested.
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 Placement Agents.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Placement Agent, 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 any Placement Agent
within the meaning of Section 15 of the Securities Act of or Section 20 of the Exchange Act
(collectively the “Placement Agent Indemnified Parties,” and each a “Placement Agent
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
Placement Agent 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
21
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 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 Placement Agent Indemnified Party
promptly upon demand for any legal fees or other expenses reasonably incurred by that
Placement Agent 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 Representative by or on behalf of any Placement
Agent specifically for use therein, which information the parties hereto agree is limited to
the Placement Agents’ Information (as defined in Section 18). 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 Placement Agent Indemnified Party.
(b) Each Placement Agent, severally and not jointly, 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 Representative by or on
behalf of any Placement Agent specifically for use therein, which information the parties
hereto agree is limited to the Placement Agents’ Information as defined in Section
18, 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 Placement
22
Agent 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.
Notwithstanding the provisions of this Section 8(b), in no event shall any indemnity by the
Placement Agents under this Section 8(b) exceed the total compensation received by such
Placement Agents in accordance with Section 2.5.
(c) Promptly after receipt by an indemnified party under this Section 8 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 8, 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 8 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 8. 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 8 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 8(a)
or Section 2.6 or the Placement Agents in the case of a claim for indemnification
under Section 8(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 8 consist of any Placement Agent Indemnified
Party or by the Company if the indemnified parties under this Section 8 consist of
any Company Indemnified Parties. Subject to this Section 8(c), the amount payable
by an indemnifying party under Section 8 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
23
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 8 (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 8 is unavailable or
insufficient to hold harmless an indemnified party under Section 8(a) or Section
8(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 Placement Agents on the other hand from the offering of the Stock, or (ii) if
the allocation provided by clause (i) of this Section 8(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 8(d) but also the relative fault
of the Company on the one hand and the Placement Agents 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 Placement Agents on the other with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds from the offering of
the Stock purchased under this Agreement (before deducting expenses) received by the Company
bear to the total discounts and commissions received by the Placement Agents in connection
with the Offering, in each 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 Placement Agents 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
Placement Agents 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 Representative by or on behalf of any Placement Agent for
use in any Preliminary Prospectus, any Registration Statement or the Prospectus, or in any
amendment or supplement thereto, consists solely of the Placement Agents’ Information as
defined in Section 18. The Company and the Placement
24
Agents agree that it would not be just and equitable if contributions pursuant to this
Section 8(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 8(d) shall be deemed to include, for purposes of this Section 8(d),
any legal or other expenses reasonably incurred by such indemnified party in connection with
investigating, 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 8(d), no Placement Agent shall be required to contribute
any amount in excess of the total compensation received by such Placement Agent in
accordance with Section 2.5 less the amount of any damages which such Placement
Agent 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. The Placement Agents’ obligations to
contribute as provided in this Section 8(d) are several in proportion to their respective
placement obligations and not joint.
9. Termination. The obligations of the Placement Agents and the Purchasers hereunder
and under the Subscription Agreements may be terminated by the Representative, in its absolute
discretion by notice given to the Company prior to delivery of and payment for the Stock if, prior
to that time, any of the events described in Sections 7(l), 7(m), 7(n) or 7(o) have occurred or if
the Purchasers shall decline to purchase the Stock for any reason permitted under this Agreement or
the Subscription Agreements.
10. Reimbursement of Placement Agents’ Expenses. Notwithstanding anything to the
contrary in this Agreement, if (a) this Agreement shall have been terminated pursuant to
Section 9, (b) the Company shall fail to tender the Stock for delivery to the Purchasers
for any reason not permitted under this Agreement, (c) the Purchasers shall decline to purchase the
Stock for any reason permitted under this Agreement or (d) the sale of the Stock is not consummated
because any condition to the obligations of the Purchasers or the Placement Agents set forth herein
is not satisfied or 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 6, the Company shall
reimburse the Placement Agents for the fees and expenses of the Placement Agents’ counsel and for
such other out-of-pocket expenses as shall have been reasonably incurred by them in connection with
this Agreement and the proposed purchase of the Stock, and upon demand the Company shall pay the
full amount thereof to the Placement Agents.
11. Authority of the representative. Co-Agent consents and agrees that LCM will act
as Representative of the Placement Agents under this Agreement and with respect to the sale of the
Stock. Accordingly, Co-Agent authorizes LCM to manage the Offering and the sale of the Stock and
to take such action in connection therewith as LCM in its sole discretion deems appropriate or
desirable, consistent with the provisions of the Agreement Among Underwriters previously entered
into between LCM and Co-Agent, taking into account that the Offering of the Stock will be in the
form of a best efforts placement and not a firm commitment underwriting. Co-Agent agrees to comply
with such Agreement Among Underwriters and that any action taken under this Agreement by the
Representative shall be binding upon all of the Placement Agents.
12. Absence of Fiduciary Relationship. The Company acknowledges and agrees that:
(a) the Placement Agents’ responsibility to the Company is solely contractual in
nature, the Placement Agents have been retained solely to act as Placement Agents in
connection with the Offering and no fiduciary, advisory or agency relationship between the
Company and the
25
Placement Agents has been created in respect of any of the transactions contemplated by
this Agreement, irrespective of whether the Placement Agents or Lazard Frères & Co. LLC have
advised or are advising the Company on other matters;
(b) the price of the Stock set forth in this Agreement was established by the Company
following discussions and arms-length negotiations with the Placement Agents, 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 Placement Agents 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 Placement Agents 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 Placement Agents for breach of fiduciary duty or alleged breach of fiduciary duty and
agrees that the Placement Agents 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.
13. Successors; Persons Entitled to Benefit of Agreement. This Agreement shall inure
to the benefit of and be binding upon the Placement Agents, the Company, and their respective
successors and assigns. This Agreement shall also inure to the benefit of Lazard Frères & Co. LLC,
the Purchasers, and each of their respective 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 Placement Agent Indemnified
Parties and the indemnities of the several Placement Agents shall be for the benefit of the Company
Indemnified Parties. It is understood that the Placement Agents’ responsibility to the Company is
solely contractual in nature and the Placement Agents do not owe the Company, or any other party,
any fiduciary duty as a result of this Agreement.
14. Survival of Indemnities, Representations, Warranties, etc. The respective
indemnities, covenants, agreements, representations, warranties and other statements of the Company
and the Placement Agents, 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 Placement Agents, the Company, the Purchasers or any person controlling any of
them and shall survive delivery of and payment for the Stock. Notwithstanding any termination of
this Agreement, including without limitation any termination pursuant to Sections 9 or
10, the indemnity and contribution agreements contained in Section 8 and the
covenants, representations, warranties set forth in this Agreement shall not terminate and shall
remain in full force and effect at all times.
15. Notices. All statements, requests, notices and agreements hereunder shall be in
writing, and:
(a) if to the Placement Agents, shall be delivered or sent by mail, facsimile
transmission or overnight courier to Lazard Capital Markets LLC, Attention: General
Counsel, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Fax: ▇▇▇-▇▇▇-▇▇▇▇; and
(b) if to the Company, shall be delivered or sent by mail, facsimile transmission or
overnight courier to GTx, Inc., Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President and General
26
Counsel, 3 North ▇▇▇▇▇▇ Street, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
provided, however, that any notice to a Placement Agent pursuant to Section 8 shall be
delivered or sent by mail, telex or facsimile transmission to such Placement Agent at its address
set forth in its acceptance telex to the Placement Agents, which address will be supplied to any
other party hereto by the Representative 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.
16. Definition of Certain Terms. For purposes of this Agreement, “business day”
means any day on which the New York Stock Exchange, Inc. is open for trading.
17. 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 Placement Agents each hereby consent to the jurisdiction of such courts and
personal service with respect thereto. The Company and the Placement Agents each hereby consent to
personal jurisdiction, service and venue in any court in which any legal proceeding arising out of
or in any way relating to this Agreement is brought by any third party against the Company or the
Placement Agents. The Company and the Placement Agents 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 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
Placement Agents 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.
18. Placement Agents’ Information. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the Placement Agents’ Information consists solely of the
following information in the Prospectus: (i) the last paragraph on the front cover page concerning
the terms of the offering by the Placement Agent; and (ii) the statements concerning the Placement
Agents contained in the first paragraph under the heading “Plan of Distribution.”
19. 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.
20. 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 Placement Agents.
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.
27
If
the foregoing is in accordance with your understanding of the agreement between the Company
and the Placement Agents, kindly indicate your acceptance in the space provided for that purpose
below.
| Very truly yours, GTX, INC. |
||||
| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |||
| Title: | V.P., General Counsel | |||
Accepted as of the date
first above written:
first above written:
| LAZARD CAPITAL MARKETS LLC | ||||
By: |
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. | |||
| Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇. | ||||
| Title: Managing Director | ||||
| ▇▇▇▇▇ AND COMPANY, LLC | ||||
By: |
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |||
| Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | ||||
| Title: Managing Director | ||||
28
SCHEDULE A
General Use Free Writing Prospectuses
Final Pricing Terms, dated December 13, 2006
SCHEDULE B
| OFFICERS | DIRECTORS | |
▇▇▇▇▇ ▇▇▇▇▇▇▇, MD, F.A.C.S, CEO
|
J.R. Hyde, III, Chairman | |
▇▇▇▇ ▇▇▇▇▇▇▇, President & COO
|
▇▇▇▇▇ ▇▇▇▇▇▇▇, MD, F.A.C.S, CEO | |
▇▇▇ ▇▇▇▇▇▇, PhD, VP, Preclinical R&D
|
▇▇▇▇ ▇▇▇▇▇▇▇, President & COO | |
▇▇▇▇ ▇▇▇▇▇▇, VP, Marketing
|
▇▇▇▇▇▇ ▇▇▇▇, MD | |
▇▇▇▇ ▇▇▇▇▇▇▇▇, PhD, VP, Clinical Development Strategy |
▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇ | |
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, VP General Counsel
|
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, MD | |
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, VP, CFO
|
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ | |
| ▇▇▇▇ ▇▇▇▇▇▇▇ | ||
| J. ▇▇▇▇▇▇▇ ▇▇▇▇▇ | ||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, MD |
EXHIBIT A
[Form of Subscription Agreement]
EXHIBIT B
[Form of Lock-Up Agreement]
December __, 2006
Lazard Capital Markets LLC
▇▇▇▇▇ and Company, LLC
c/o Lazard Capital Markets LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ and Company, LLC
c/o Lazard Capital Markets LLC
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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 placement
agent 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 filed by the Company with the Securities and Exchange Commission
in connection with such public offering, 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 undersigned may sell or otherwise transfer 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, or (iii) pursuant to
any 10b-5(1) trading plans in effect as of the date of the date of the Offering or (iv) 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 Company’s final 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: | ||||