OCCULOGIX, INC.
8,400,000 Shares(1)
Common Stock
($0.001 par value)
Underwriting Agreement
New York, New York
December [ ], 2004
Citigroup Global Markets Inc.
SG Cowen & Co., LLC
ThinkEquity Partners LLC
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
OccuLogix, Inc., a corporation organized under the laws of the State of
Delaware (the "Company"), proposes to sell to the several underwriters named in
Schedule I hereto (the "Underwriters"), for whom you (the "Representatives") are
acting as representatives, 5,600,000 shares of Common Stock, $0.001 par value
per share ("Common Stock"), of the Company and the persons named in Schedule II
hereto (the "Selling Stockholders") propose to sell to the several Underwriters
2,800,000 shares of Common Stock (said shares to be issued and sold by the
Company and shares to be sold by the Selling Stockholders collectively being
hereinafter called the "Underwritten Securities"). The Selling Stockholders
named in Schedule II hereto also propose to grant to the Underwriters an option
(the "Over-Allotment Option") to purchase up to 1,260,000 additional shares of
Common Stock to cover over-allotments (the "Option Securities"; the Option
Securities, together with the Underwritten Securities, being hereinafter called
the "Securities"). To the extent there are no additional Underwriters listed on
Schedule I other than you, the term Representatives as used herein shall mean
you, as Underwriters, and the terms Representatives and Underwriters shall mean
either the singular or plural as the context requires. In addition, to the
extent that there is not more than one Selling Stockholder named in Schedule II,
the term Selling Stockholder shall mean either the singular or plural. The use
of the neuter in this Agreement shall include the feminine and masculine
wherever appropriate. Certain terms used herein are defined in Section 17
hereof.
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(1) Plus an option to purchase from the Selling Stockholders up to 1,260,000
additional Securities to cover over-allotments.
As part of the offering contemplated by this Agreement, Citigroup Global
Markets Inc. has agreed to reserve out of the Securities set forth opposite its
name on Schedule I to this Agreement, up to 420,000 shares of Common Stock, for
sale to the Company's employees, officers, and directors and certain of their
friends and family (collectively, "Participants"), as set forth in the
Prospectus under the heading "Underwriting" (the "Directed Share Program"). The
Securities to be sold by Citigroup Global Markets Inc. pursuant to the Directed
Share Program (the "Directed Shares") will be sold by Citigroup Global Markets
Inc. pursuant to this Agreement at the public offering price. Any Directed
Shares not orally confirmed for purchase by any Participants by 8:00 a.m. New
York City time on the business day following the date on which this Agreement is
executed will be offered to the public by Citigroup Global Markets Inc. as set
forth in the Prospectus.
1. Representations and Warranties.
(i) The Company and each of the Selling Stockholders listed in
Schedule II and identified as Major Selling Stockholders (the "Major Selling
Stockholders") jointly and severally represent and warrant to, and agree with,
each Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the
Commission a registration statement (file number 333-118204) on Form
S-1, including a related preliminary prospectus, for registration under
the Act of the offering and sale of the Securities. The Company may have
filed one or more amendments thereto, including a related preliminary
prospectus, each of which has previously been furnished to you. The
Company will next file with the Commission one of the following: either
(1) prior to the Effective Date of such registration statement, a
further amendment to such registration statement (including the form of
final prospectus) or (2) after the Effective Date of such registration
statement, a final prospectus in accordance with Rules 430A and 424(b).
In the case of clause (2), the Company has included in such registration
statement, as amended at the Effective Date, all information (other than
Rule 430A Information) required by the Act and the rules thereunder to
be included in such registration statement and the U.S. Prospectus. As
filed, such amendment and form of final prospectus, or such final
prospectus, shall contain all Rule 430A Information, together with all
other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to you prior to the
Execution Time or, to the extent not completed at the Execution Time,
shall contain only such specific additional information and other
changes (beyond that contained in the latest Preliminary U.S.
Prospectus) as the Company has advised you, prior to the Execution Time,
will be included or made therein.
(b) The Company shall comply with, to the satisfaction
of the Underwriters, all of the Canadian Securities Laws required to be
complied with by the Company to qualify the Distribution of the
Over-Allotment Option and the Securities in each of the provinces of
Canada (the "Canadian Qualifying Jurisdictions") by or through the
Underwriters, their affiliates and other properly registered Selling
Firms who have complied with the relevant provisions of Canadian
Securities Laws. To that end, the Company has prepared and filed with
the Ontario Securities Commission (the "OSC"), as
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principal regulator under MRRS, and the other Canadian Securities
Commissions, a preliminary base PREP prospectus relating to the
Over-Allotment Option and the Securities in the English and French
languages (the "Canadian Preliminary Prospectus"). The Canadian
Preliminary Prospectus has been filed with the Canadian Securities
Commissions in each of the Canadian Qualifying Jurisdictions pursuant to
National Policy 43-201. The Company has obtained a preliminary MRRS
decision document issued by the OSC, in its capacity as principal
regulator under MRRS, evidencing that preliminary receipts of the
Canadian Securities Commissions in each of the Canadian Qualifying
Jurisdictions have been issued in respect of the Canadian Preliminary
Prospectus. The Company may have filed one or more amendments to the
Canadian Preliminary Prospectus, each of which has previously been
furnished to you. The Company has also prepared and filed with the OSC
and the other Canadian Securities Commissions a final base PREP
prospectus relating to the Over-Allotment Option and the Securities in
the English and French Languages omitting the PREP information (as
hereinafter defined) (the "Canadian Final Prospectus") in accordance
with the rules and procedures established pursuant to National
Instrument 44-103 for the pricing of securities after the final receipt
for a prospectus has been obtained (the "PREP Procedures") and has
obtained a final MRRS decision document issued by the OSC, in its
capacity as principal regulator under MRRS, evidencing that final
receipts of the Canadian Securities Commissions in each of the Canadian
Qualifying Jurisdictions have been issued in respect of the Canadian
Final Prospectus. The Company will prepare and file, promptly after the
execution and delivery of this Agreement, with the OSC and the other
Canadian Securities Commissions, in accordance with the PREP Procedures,
a supplemented prospectus in the English and French languages setting
forth the PREP Information (the "Canadian Supplemental PREP
Prospectus"). The Company shall co-operate in all respects with the
Underwriters to allow and assist the Underwriters to participate in the
preparation of the Canadian Supplemental PREP Prospectus, which shall be
in a form satisfactory to the Underwriters. The information included in
the Canadian Supplemental PREP Prospectus that is omitted from the
Canadian Final Prospectus but that is deemed under the PREP Procedures
to be incorporated by reference into the Canadian Final Prospectus on
the date of the Canadian Supplemental PREP Prospectus is referred to as
the "PREP information". Collectively, the Canadian Final Prospectus, as
supplemented by the Canadian Supplemental PREP Prospectus, is referred
to as the "Canadian Prospectus". Collectively, the "Canadian Prospectus"
and the "U.S. Prospectus" are referred to as the "Prospectus".
(c) On the Effective Date, the Registration Statement
did or will, and when the U.S. Prospectus is first filed (if required)
in accordance with Rule 424(b) and on the Closing Date (as defined
herein) and on any date on which Option Securities are purchased, if
such date is not the Closing Date (a "settlement date"), the U.S.
Prospectus (and any supplements thereto) will, comply in all material
respects with the applicable requirements of the Act and the rules
thereunder; on the Effective Date and at the Execution Time, the
Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the U.S. Prospectus, if not
filed pursuant to Rule 424(b), will not, and on the date of any filing
pursuant to Rule 424(b) and on the Closing Date and any settlement date,
the
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U.S. Prospectus (together with any supplement thereto) will not, include
any untrue statement of a material fact or 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. All
information and statements contained in the Canadian Final Prospectus,
as supplemented by the Canadian Supplemental PREP Prospectus, will, on
the date of filing of the Canadian Supplemental PREP Prospectus and on
the Closing Date and on any date on which the Option Securities are
purchased if such date is not the Closing Date, be true and correct in
all material respects and contain no misrepresentation (as that term is
defined under Canadian Securities Laws) and constitute full, true and
plain disclosure of all material facts relating to the Company, the
Over-Allotment Option and the Securities, and no material fact or
information has been omitted therefrom which is required to be stated
therein or is necessary to make any statement or information contained
therein not false or misleading in light of the circumstances in which
it was made, and the Canadian Final Prospectus, as supplemented by the
Canadian Supplemental PREP Prospectus, will, on the date of filing of
the Canadian Supplemental PREP Prospectus and on the Closing Date,
comply in all material respects with Canadian Securities Laws; provided,
however, that the Company and the Major Selling Stockholders make no
representations or warranties as to the information contained in or
omitted from the Registration Statement, the U.S. Prospectus (or any
supplement thereto), the Canadian Final Prospectus or the Canadian
Supplemental PREP Prospectus in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter through the Representatives specifically for inclusion in
the Registration Statement, the U.S. Prospectus (or any supplement
thereto), the Canadian Final Prospectus or the Canadian Supplemental
PREP Prospectus.
(d) Each of the Company and its subsidiaries has been
duly organized and is validly existing as a corporation or partnership
(as applicable) in good standing under the laws of the jurisdiction in
which it is chartered or organized with full corporate or partnership
(as applicable) power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as a foreign
corporation or partnership (as applicable) and is in good standing under
the laws of each jurisdiction which requires such qualification, except
where the failure to be so qualified or in good standing would not
reasonably be expected to have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or
properties of the Company and its subsidiaries taken as a whole, whether
or not arising from transactions in the ordinary course of business (a
"Material Adverse Effect"), except as set forth in or contemplated in
the Prospectus (exclusive of any supplement thereto).
(e) All the outstanding shares of capital stock or other
equity interests of each subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable, and, except
as otherwise set forth in the Prospectus, all outstanding shares of
capital stock or other equity interests of the subsidiaries are owned by
the Company either directly or through wholly owned subsidiaries free
and clear of any perfected security interest or any other security
interests, claims, liens or encumbrances.
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(f) The Company's authorized equity capitalization is as
set forth in the Prospectus; the capital stock of the Company conforms
in all material respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock (including the
Securities being sold hereunder by the Selling Stockholders) have been
duly and validly authorized and issued and are fully paid and
nonassessable; the Securities being sold hereunder by the Company have
been duly and validly authorized, and, when issued and delivered to and
paid for by the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; the Securities have been approved for quotation
on the Nasdaq National Market, subject to official notice of issuance
and evidence of satisfactory distribution; the Securities have been
conditionally approved for listing on the TSX, subject only to
compliance with minimum distribution requirements and the Company
providing to the TSX certain required routine documentation; the
certificates for the Securities have been duly approved and adopted by
the Company and are in valid and sufficient form and comply with the
requirements of the TSX and Nasdaq National Market; the holders of
outstanding shares of capital stock of the Company are not entitled to
preemptive or other rights to subscribe for the Common Stock; and,
except as set forth in the Prospectus, no options, warrants or other
rights to purchase, agreements or other obligations to issue, or rights
to convert any obligations into or exchange any securities for, shares
of capital stock of or ownership interests in the Company are
outstanding.
(g) There is no franchise, contract or other document of
a character required to be described in the Registration Statement or
Prospectus, or to be filed as an exhibit thereto, which is not described
or filed as required; and the statements in the Prospectus under the
headings "Risk Factors - Even if we complete MIRA-1, we may not receive
FDA approval to market the RHEO System in the United States," "Risk
Factors - We currently depend on single sources for key components of
the RHEO System. The loss of any of these sources could delay our
clinical trials or prevent or delay commercialization of the RHEO
System," "Risk Factors - Our supply agreement with Asahi Medical
requires us to transfer the FDA approval of the RHEO System to it upon
receipt which will limit our control of the FDA approval," "Risk Factors
- If we or our suppliers fail to comply with the extensive regulatory
requirements to which we and the RHEO System are subject, the RHEO
System could be subject to restrictions or withdrawals from the market
and we could be subject to penalties," "Risk Factors - Future sales of
our common stock could reduce our stock price," "Risk Factors - We have
entered into a number of related party transactions with suppliers,
creditors, stockholders and other parties, each of which may have
interests which conflict with those of our public stockholders,"
"Business - Clinical Studies," "Business - Supplier Relationships,"
"Business - Government Regulation," "Reorganization," "Management,"
"Certain Relationships and Related Party Transactions," "Description of
Capital Stock" and "Shares Eligible for Future Sale," insofar as such
statements summarize legal matters, agreements, documents or proceedings
discussed therein, are accurate and fair summaries in all material
respects of such legal matters, agreements, documents or proceedings.
(h) This Agreement has been duly authorized, executed
and delivered by the Company.
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(i) The Company is not and, after giving effect to the
offering and sale of the Securities and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as defined in the Investment Company Act of 1940, as amended.
(j) No consent, approval, authorization, filing with or
order of any court or Governmental Authority is required in connection
with the transactions contemplated herein, except for the filing of the
Canadian Supplemental PREP Prospectus with the Canadian Securities
Commissions and except for such as have been obtained under the Act,
under Canadian Securities Laws and such as may be required under the
blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus.
(k) Neither the issue and sale of the Securities nor the
consummation of any other of the transactions herein contemplated nor
the fulfillment of the terms hereof will conflict with, result in a
breach or violation of, or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its subsidiaries
pursuant to, (i) the charter or by-laws of the Company or any of its
subsidiaries, (ii) the terms of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which the
Company or any of its subsidiaries is a party or bound or to which its
or their property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any
of its subsidiaries of any court, regulatory body, administrative
agency, Governmental Authority, arbitrator or other authority having
jurisdiction over the Company or any of its subsidiaries or any of its
or their properties.
(l) Except as disclosed in the prospectus, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement which have not been
satisfied or waived.
(m) The consolidated historical financial statements of
the Company and its consolidated subsidiaries included in the Prospectus
and the Registration Statement present fairly in all material respects
the financial condition, results of operations and cash flows of the
Company as of the dates and for the periods indicated, comply as to form
in all material respects with the applicable accounting requirements of
the Act and the Canadian Securities Laws, have been prepared in
conformity with U.S. generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as otherwise
noted therein) and have been reconciled to Canadian generally accepted
accounting principles. The selected financial data set forth under the
caption "Selected Consolidated Financial Data" in the Prospectus and the
Registration Statement fairly present in all material respects, on the
basis stated in the Prospectus and the Registration Statement, the
information included therein. The pro forma financial statements
included in the Prospectus and the Registration Statement include
assumptions that provide a reasonable basis for presenting the
significant effects directly attributable to the transactions and events
described therein, the related pro forma
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adjustments give appropriate effect to those assumptions, and the pro
forma adjustments reflect the proper application of those adjustments to
the historical financial statement amounts in the pro forma financial
statements included in the Prospectus and the Registration Statement.
The pro forma financial statements included in the Prospectus and the
Registration Statement comply as to form in all material respects with
the applicable accounting requirements of Regulation S-X under the Act
and the Canadian Securities Laws and the pro forma adjustments have been
properly applied to the historical amounts in the compilation of those
statements.
(n) No action, suit or proceeding by or before any court
or Governmental Authority or any arbitrator involving the Company or any
of its subsidiaries or its or their property is pending or, to the best
knowledge of the Company, threatened that (i) could reasonably be
expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby or (ii) could reasonably be expected to have a Material Adverse
Effect, except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto).
(o) Each of the Company and each of its subsidiaries
owns or leases all such properties as are necessary to the conduct of
its operations as presently conducted, except for any such properties
that the failure to own or lease could not reasonably be expected to
have a Material Adverse Effect, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto).
(p) Neither the Company nor any subsidiary is in
violation or default of any provision of (i) its charter or bylaws, (ii)
the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or bound or to
which its property is subject, or (iii) any statute, law, rule,
regulation, judgment, order or decree of any court, regulatory body,
administrative agency, Governmental Authority, arbitrator or other
authority having jurisdiction over the Company or such subsidiary or any
of its properties, as applicable, except, in the case of clauses (ii) or
(iii) above, for violations or defaults as would not reasonably be
expected to have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(q) Ernst & Young LLP, who has certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered its report with respect to the audited consolidated
financial statements included in the Prospectus, is an independent
registered public accounting firm with respect to the Company within the
meaning of the Act and the applicable published rules and regulations
thereunder and are independent public accountants as required under
Canadian Securities Laws, and there has not been any disagreement
(within the meaning of National Policy Statement No. 31) with the
present or any former accountants of the Company and Deloitte & Touche
LLP, at the time they were the Company's accountants, were independent
public accountants under applicable law.
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(r) There are no transfer taxes or other similar fees or
charges under the laws of Canada or any political subdivision thereof,
U.S. federal law or the laws of any state, or any political subdivision
thereof, required to be paid in connection with the execution and
delivery of this Agreement or the issuance by the Company or sale by the
Company of the Securities.
(s) Each of the Company and its subsidiaries has filed
all Tax Returns that are required to be filed or has requested
extensions thereof (except in any case in which the failure so to file
would not have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto))
and has paid all Taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such assessment, fine
or penalty that is currently being contested in good faith or as would
not have a Material Adverse Effect, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(t) No labor problem or dispute with the employees of
the Company or any of its subsidiaries exists or, to the knowledge of
the Company, is threatened or imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its or its subsidiaries' principal suppliers, contractors or customers,
that could reasonably be expected to have a Material Adverse Effect,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto).
(u) The Company and each of its subsidiaries are insured
by insurers of recognized financial responsibility against such losses
and risks and in such amounts as are prudent in the businesses in which
they are engaged; all policies of insurance and fidelity or surety bonds
insuring the Company or any of its subsidiaries or their respective
businesses, assets, employees, officers and directors are in full force
and effect; the Company and its subsidiaries are in compliance with the
terms of such policies and instruments in all material respects; and
there are no claims by the Company or any of its subsidiaries under any
such policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; neither the
Company nor any such subsidiary has been refused any insurance coverage
sought or applied for; and neither the Company nor any such subsidiary
has 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,
except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto).
(v) No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such subsidiary's capital
stock, from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such
subsidiary's property or assets to the Company or any other subsidiary
of the Company, except as described in or contemplated by the Prospectus
(exclusive of any supplement thereto).
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(w) The Company and its subsidiaries possess all
licenses, certificates, permits and other authorizations issued by the
appropriate federal, state, provincial, municipal or foreign regulatory
authorities necessary to conduct their respective businesses, except for
any which the failure to possess could not reasonably be expected to
have a Material Adverse Effect, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto), and neither the
Company nor any such subsidiary has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(x) The Company and each of its subsidiaries maintain a
system of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with U.S. generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(y) The Company has not taken, directly or indirectly,
any action designed to or that would constitute or that might reasonably
be expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(z) The Company and its subsidiaries are (i) in
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received
and are in compliance with all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) have not received notice of any actual
or potential liability under any environmental law, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto). Except as set forth in the Prospectus, neither the
Company nor any of the subsidiaries has been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(aa) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the
course of which it identifies and evaluates associated costs and
liabilities (including, without limitation, any capital or operating
expenditures required for clean-up, closure of properties or compliance
with
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Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to
third parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly
or in the aggregate, have a Material Adverse Effect, except as set forth
in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(bb) The minimum funding standard under Section 302 of
the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder ("ERISA"), has been
satisfied by each "pension plan" (as defined in Section 3(2) of ERISA)
which has been established or maintained by the Company and/or one or
more of its subsidiaries, and the trust forming part of each such plan
which is intended to be qualified under Section 401 of the U.S. Internal
Revenue Code of 1986, as amended, is so qualified; each of the Company
and its subsidiaries has fulfilled its obligations, if any, under
Section 515 of ERISA; neither the Company nor any of its subsidiaries
maintains or is required to contribute to a "welfare plan" (as defined
in Section 3(l) of ERISA) which provides retiree or other
post-employment welfare benefits or insurance coverage (other than
"continuation coverage" (as defined in Section 602 of ERISA)); each
pension plan and welfare plan established or maintained by the Company
and/or one or more of its subsidiaries is in compliance in all material
respects with the currently applicable provisions of ERISA; and neither
the Company nor any of its subsidiaries has incurred or could reasonably
be expected to incur any withdrawal liability under Section 4201 of
ERISA, any liability under Section 4062, 4063, or 4064 of ERISA, or any
other liability under Title IV of ERISA.
(cc) There is and has been no failure on the part of the
Company and any of the Company's directors or officers, in their
capacities as such, to comply with any applicable provision of the
Sarbanes Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith (the "Sarbanes Oxley Act"), including Section 402
related to loans and Sections 302 and 906 related to certifications.
(dd) Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of its subsidiaries is aware
of or has taken any action, directly or indirectly, that would result in
a violation by such persons of the FCPA, including, without limitation,
making use of the mails or any means or instrumentality of interstate
commerce corruptly in furtherance of an offer, payment, promise to pay
or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to
any "foreign official" (as such term is defined in the FCPA) or any
non-U.S. political party or official thereof or any candidate for
non-U.S. political office, in contravention of the FCPA and the Company,
its subsidiaries and, to the knowledge of the Company, its affiliates
have conducted their businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure, and
which are reasonably expected to continue to ensure, continued
compliance therewith.
"FCPA" means Foreign Corrupt Practices Act of 1977, as
amended, and the rules and regulations thereunder.
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(ee) The operations of the Company and its subsidiaries
are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines,
issued, administered or enforced by any Governmental Authority
(collectively, the "Money Laundering Laws") and no action, suit or
proceeding by or before any court or Governmental Authority or any
arbitrator involving the Company or any of its subsidiaries with respect
to the Money Laundering Laws is pending or, to the best knowledge of the
Company, threatened.
(ff) Neither the Company nor any of its subsidiaries
nor, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of its subsidiaries is
currently subject to any U.S. sanctions administered by the Office of
Foreign Assets Control of the U.S. Treasury Department ("OFAC"); and the
Company will not directly or indirectly use the proceeds of the
offering, or lend, contribute or otherwise make available such proceeds
to any subsidiary, joint venture partner or other person or entity, for
the purpose of financing the activities of any person currently subject
to any U.S. sanctions administered by OFAC.
(gg) The subsidiaries listed on Annex A attached hereto
are the only significant subsidiaries of the Company as defined by Rule
1-02 of Regulation S-X.
(hh) The Company and its subsidiaries own, possess,
license or have other rights to use, on reasonable terms, all patents,
patent applications, trademark and service marks, trademark and service
mark registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the conduct of
the Company's business as now conducted or as proposed in the Prospectus
to be conducted, except for any which the failure to own, possess,
license or have the rights to use could not reasonably be expected to
have a Material Adverse Effect, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto). Except as set
forth in the Prospectus under the caption "Business-Patents and
Proprietary Rights," (a) there are no rights of third parties to any
such Intellectual Property; (b) there is no material infringement by
third parties of any such Intellectual Property; (c) there is no pending
or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the Company's rights in or to any such
Intellectual Property, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (d) there is no
pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of any
such Intellectual Property and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (e) there is no
pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others that the Company infringes or otherwise
violates any patent, trademark, copyright, trade secret or other
proprietary rights of others, and the Company is unaware of any other
fact which would form a reasonable basis for any such claim; (f) there
is no U.S. patent which contains claims that dominate or may dominate
any Intellectual Property described in the Prospectus as being owned by
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or licensed to the Company or that interferes with the issued or pending
claims of any such Intellectual Property; and (g) there is no prior art
of which the Company is aware that may render any U.S. patent held or
licensed by the Company invalid or any U.S. patent application held or
licensed by the Company unpatentable.
(ii) Each of the current employees of the Company,
including for greater certainty each of the officers of the Company, has
entered into an agreement with the Company assigning to the Company all
intellectual property rights (including moral rights) to which such
employee may have a claim that were created during the term of
employment of the employee, and each current employee of the Company,
including for greater certainty each of the officers of the Company, has
entered into a reasonably appropriate confidentiality agreement with the
Company.
(jj) The statements contained in the Prospectus under
the captions "Risk Factors -- Our patents may not be valid and we may
not be able to obtain and enforce patents to protect our propriety
rights from use by competitors" and "Business -- Patents and Proprietary
Rights," insofar as such statements summarize legal matters, agreements,
documents, or proceedings discussed therein, are accurate and fair
summaries, in all material respects, of such legal matters, agreements,
documents or proceedings.
(kk) Except as disclosed in the Registration Statement
and the Prospectus, the Company (i) does not have any material lending
or other relationship with any bank or lending affiliate of Citigroup
Global Markets Inc. and (ii) does not intend to use any of the proceeds
from the sale of the Securities hereunder to repay any outstanding debt
owed to any affiliate of Citigroup Global Markets Inc.
(ll) Neither the Company nor any of its subsidiaries nor
any of its or their properties or assets has any immunity from the
jurisdiction of any court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of
execution or otherwise) under the laws of Canada.
(mm) Neither the Company nor any of its subsidiaries is
a party to any contract, agreement or understanding with any person that
would give rise to a valid claim against the Company or the Underwriters
for a brokerage commission, finder's fee or like payment in connection
with the offering and sale of the Securities other than this Agreement.
(nn) Each of the transactions included in the
Reorganization (as defined and described in the Prospectus) has been
completed.
Furthermore, the Company represents and warrants to Citigroup Global
Markets Inc. that (i) the Registration Statement, the Prospectus and any
preliminary prospectus comply, and any further amendments or supplements thereto
will comply, with any applicable laws or regulations of foreign jurisdictions in
which the Prospectus or any preliminary prospectus, as amended or supplemented,
if applicable, are distributed in connection with the Directed Share Program,
and that (ii) no authorization, approval, consent, license, order, registration
or qualification of or with any Governmental Authority or court, other than such
as have been obtained, is necessary under
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the securities laws and regulations of foreign jurisdictions in which the
Directed Shares are offered outside the United States. The Company has not
offered, or caused the Underwriters to offer, Securities to any person pursuant
to the Directed Share Program with the specific intent to unlawfully influence
(x) a customer or supplier of the Company to alter the customer's or supplier's
level or type of business with the Company, or (y) a trade journalist or
publication to write or publish favorable information about the Company or its
products.
Any certificate signed by any officer of the Company and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Company, as to matters covered thereby, to each Underwriter.
(ii) Each Selling Stockholder severally represents and warrants
to, and agrees with, each Underwriter that:
(a) Such Selling Stockholder is the record and
beneficial owner of the Securities to be sold by it hereunder free and
clear of all liens, encumbrances, equities and claims and has duly
endorsed such Securities in blank, and, assuming that each Underwriter
acquires its interest in the Securities it has purchased from such
Selling Stockholder without notice of any adverse claim (within the
meaning of Section 8-105 of the New York Uniform Commercial Code
("UCC")), each Underwriter that has purchased such Securities delivered
on the Closing Date to The Depository Trust Company or other securities
intermediary by making payment therefor as provided herein, and that has
had such Securities credited to the securities account or accounts of
such Underwriters maintained with The Depository Trust Company or such
other securities intermediary will have acquired a security entitlement
(within the meaning of Section 8-102(a)(17) of the UCC) to such
Securities purchased by such Underwriter, and no action based on an
adverse claim (within the meaning of Section 8-105 of the UCC) may be
asserted against such Underwriter with respect to such Securities.
(b) Such Selling Stockholder has not taken, directly or
indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
(c) Certificates in negotiable form for such Selling
Stockholder's Securities have been placed in custody, for delivery
pursuant to the terms of this Agreement, under a Custody Agreement and
Power of Attorney duly authorized (if applicable), executed and
delivered by such Selling Stockholder, in the form heretofore furnished
to you (the "Custody Agreement") with Mellon Investor Services LLC, as
Custodian (the "Custodian"); the Securities represented by the
certificates so held in custody for each Selling Stockholder are subject
to the interests hereunder of the Underwriters; the arrangements for
custody and delivery of such certificates, made by such Selling
Stockholder hereunder and under the Custody Agreement, are not subject
to termination by any acts of such Selling Stockholder, or by operation
of law, whether by the death or incapacity of such Selling Stockholder
or the occurrence of any other event; and if any such death, incapacity
or any other such event shall occur before the delivery
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of such Securities hereunder, certificates for the Securities will be
delivered by the Custodian in accordance with the terms and conditions
of this Agreement and the Custody Agreement as if such death, incapacity
or other event had not occurred, regardless of whether or not the
Custodian shall have received notice of such death, incapacity or other
event.
(d) No consent, approval, authorization or order of any
court or Governmental Authority is required for the consummation by such
Selling Stockholder of the transactions contemplated herein, except for
the filing of the Canadian Supplemental PREP Prospectus with the
Canadian Securities Commissions and except for such as may have been
obtained under the Act and Canadian Securities Laws and such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and distribution of the Securities by the Underwriters and
such other approvals as have been obtained.
(e) Neither the sale of the Securities being sold by
such Selling Stockholder nor the consummation of any other of the
transactions herein contemplated by such Selling Stockholder or the
fulfillment of the terms hereof by such Selling Stockholder will
conflict with, result in a breach or violation of, or constitute a
default under any law or the charter or by-laws or other governing
document of such Selling Stockholder or the terms of any indenture or
other agreement or instrument to which such Selling Stockholder or any
of its subsidiaries is a party or bound, or any judgment, order or
decree applicable to such Selling Stockholder or any of its subsidiaries
of any court, regulatory body, administrative agency, Governmental
Authority or arbitrator having jurisdiction over such Selling
Stockholder or any of its subsidiaries.
(f) Each Selling Stockholder listed in Schedule II and
identified as an Other Selling Stockholder (the "Other Selling
Stockholders") has no reason to believe that the representations and
warranties of the Company contained in this Section 1 are not true and
correct, is familiar with the Registration Statement and the Prospectus
and has no knowledge of any material fact, condition or information not
disclosed in the Prospectus or any supplement thereto which has
adversely affected or is reasonably likely to adversely affect the
business of the Company and its subsidiaries, taken as a whole; and the
sale of Securities by such Other Selling Stockholder pursuant hereto is
not prompted by any information concerning the Company or any of its
subsidiaries which is not set forth in the Prospectus and any supplement
thereto.
(g) In respect of any statements in or omissions from
the Registration Statement, the Prospectus or any supplements thereto
made in reliance upon and in conformity with information furnished in
writing to the Company by any Other Selling Stockholder specifically for
use in connection with the preparation thereof, such Other Selling
Stockholder hereby makes the same representations and warranties to each
Underwriter as the Company makes to such Underwriter under paragraph
(i)(c) of this Section.
Any certificate signed by any Selling Stockholder or its
officers and delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the
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Securities shall be deemed a representation and warranty by such Selling
Stockholder, as to matters covered thereby, to each Underwriter.
2. Purchase and Sale.
(a) Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company
and the Selling Stockholders agree, severally and not jointly, to sell
to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company and the Selling Stockholders, at a
purchase price of $[__________] per share, the amount of the
Underwritten Securities set forth opposite such Underwriter's name in
Schedule I hereto.
(b) Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Selling
Stockholders named in Schedule II hereto hereby, severally and not
jointly, grant an option to the several Underwriters to purchase,
severally and not jointly, up to 1,260,000 Option Securities at the same
purchase price per share as the Underwriters shall pay for the
Underwritten Securities. Said option may be exercised only to cover
over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any
time on or before the 30th day after the date of the Prospectus upon
written notice by the Representatives to such Selling Stockholders
setting forth the number of shares of the Option Securities as to which
the several Underwriters are exercising the option and the settlement
date. The maximum number of Option Securities to be sold by the Selling
Stockholders is 1,260,000. In the event that the Underwriters exercise
less than their full over-allotment option, the number of Option
Securities to be sold by each Selling Stockholder listed on Schedule II
shall be, as nearly as practicable, in the same proportion as the
maximum number of Option Securities to be sold by each Selling
Stockholder and the number of Option Securities to be sold. The number
of Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of shares of the Option Securities
to be purchased by the several Underwriters as such Underwriter is
purchasing of the Underwritten Securities, subject to such adjustments
as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 a.m., New York City time, on December
[___], 2004, or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement among the Representatives, the Company
and the Selling Stockholders or as provided in Section 9 hereof (such date and
time of delivery and payment for the Securities being herein called the "Closing
Date"). Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the respective aggregate purchase
prices of the Securities being sold by the Company and each of the Selling
Stockholders to or upon the order of the Company and the Selling Stockholders by
wire transfer payable in same-day funds to the accounts specified by the Company
and the Selling
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Stockholders. Delivery of the Underwritten Securities and the Option Securities
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
Each Selling Stockholder will pay all applicable state transfer
taxes, if any, involved in the transfer to the several Underwriters of the
Securities to be purchased by them from such Selling Stockholder and the
respective Underwriters will pay any additional stock transfer taxes involved in
further transfers.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Selling Stockholders
named in Schedule II hereto will deliver the Option Securities (at the expense
of the Company) to the Representatives, at 388 Greenwich Street, New York, New
York 10013, on the date specified by the Representatives (which shall be within
three Business Days after exercise of said option) for the respective accounts
of the several Underwriters, against payment by the several Underwriters through
the Representatives of the purchase price thereof to or upon the order of the
Selling Stockholders named in Schedule II by wire transfer payable in same-day
funds to the accounts specified by the Selling Stockholders named in Schedule II
hereto. If settlement for the Option Securities occurs after the Closing Date,
such Selling Stockholders will deliver to the Representatives on the settlement
date for the Option Securities, and the obligation of the Underwriters to
purchase the Option Securities shall be conditioned upon receipt of,
supplemental opinions, certificates and letters confirming as of such date the
opinions, certificates and letters delivered on the Closing Date pursuant to
Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements.
(i) The Company agrees with the several Underwriters that:
(a) Prior to the filing of the Registration Statement,
the Canadian Final Prospectus, the Canadian Supplemental PREP Prospectus
and any Supplementary Materials (as defined below), the Company shall
allow the Underwriters to participate fully in the preparation of the
Registration Statement, the Canadian Final Prospectus, the Canadian
Supplemental PREP Prospectus and such Supplementary Materials,
respectively, and shall allow the Underwriters to conduct all due
diligence investigations which the Underwriters may reasonably require
in order to fulfil their obligations as underwriters and in order to
enable the Underwriters to responsibly execute the certificate required
to be executed by the Underwriters in the Canadian Prospectus and any
Supplementary Materials.
(b) The Company shall deliver to the Underwriters
contemporaneously, as nearly as practicable, with the execution and
delivery of this Agreement: (i) a copy of the Canadian Preliminary
Prospectus and the Canadian Final Prospectus in each of the French and
the English language signed and certified as required by the Canadian
Securities Laws in each of the Canadian Qualifying Jurisdictions; (ii) a
copy of all such documents and certificates that were filed with the
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Canadian Preliminary Prospectus and the Canadian Final Prospectus under
Canadian Securities Laws; (iii) an opinion of its auditors, Ernst &
Young LLP, addressed to the Underwriters and their counsel, in form and
substance satisfactory to the Underwriters and their counsel, to the
effect that the French language version of: (1) the consolidated
financial statements of the Company, the financial statements of
OccuLogix, L.P. and the pro forma consolidated financial statements of
the Company forming part of the Canadian Preliminary Prospectus and the
Canadian Final Prospectus, including the related notes thereto and the
related auditors' reports thereon, (2) Management's Discussion and
Analysis set out in the Canadian Preliminary Prospectus and the Canadian
Final Prospectus, and (3) the "Summary Historical and Pro Forma
Consolidated Financial Data", the "Unaudited Pro Forma Condensed
Financial Data" and "Selected Consolidated Financial Data" set out in
the Canadian Preliminary Prospectus and the Canadian Final Prospectus
(all of the foregoing collectively known as the "Financial Information")
is a complete and proper translation of the English language version
thereof and such French language version is not susceptible to any
materially different interpretation with respect to any material matter
contained therein; (iv) an opinion of Desjardins Ducharme Stein Monast
addressed to the Underwriters and their counsel in form and substance
satisfactory to the Underwriters and their counsel, to the effect that,
except for the Financial Information, the French language version of
each of the Canadian Preliminary Prospectus and the Canadian Final
Prospectus is a complete and proper translation of the English language
version thereof and such French language version is not susceptible to
any materially different interpretation with respect to any material
matter contained therein; (v) evidence reasonably satisfactory to the
Underwriters and their counsel that the Company has completed each of
the transactions included in the Reorganization (as described in the
Canadian Final Prospectus) as described in the Canadian Final
Prospectus; and (vi) a letter from the TSX advising the Company that
approval of the conditional listing of the Securities has been granted
by the TSX, subject to the satisfaction of certain usual conditions set
out therein. The deliveries set forth in (i) shall also constitute the
Company's consent to the Underwriters' use of the Canadian Final
Prospectus for the Distribution of the Securities in the Canadian
Qualifying Jurisdictions in compliance with the provisions of this
Agreement.
(c) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective.
(d) The Company will notify the Underwriters promptly,
and confirm the notice in writing, when any amendment to the
Registration Statement has been filed with the Commission or has become
effective, and when the Canadian Supplemental PREP Prospectus containing
the PREP information, or any amended Canadian Prospectus, U.S.
Prospectus or any supplement thereto (collectively, "Supplementary
Material") shall have been filed, in which case the Company shall
deliver to the Underwriters all signed and certified copies of such
Supplementary Material in the English and French languages along with
all documents similar to those referred to in Section 5(i)(b)(i) (ii),
(iii) and (iv) and such other documents as the Underwriters may
reasonably request. Prior to the termination of the offering of the
Securities and the Distribution, the Company will not file any amendment
of the Registration Statement or
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supplement to the U.S. Prospectus or any Rule 462(b) Registration
Statement or the U.S. Prospectus or any amendment to the Canadian
Prospectus or the Canadian Supplemental PREP Prospectus unless the
Company has furnished to the Underwriters a copy for their review prior
to filing and will not file any such proposed amendment or supplement to
which the Underwriters reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective
pursuant to Rule 430A, or filing of the U.S. Prospectus is otherwise
required under Rule 424(b), the Company will cause the U.S. Prospectus,
properly completed, and any supplement thereto to be filed in a form
approved by the Representatives with the Commission pursuant to the
applicable paragraph of Rule 424(b) within the time period prescribed
and will provide evidence reasonably satisfactory to the Representatives
of such timely filing. The Company will promptly advise the
Representatives in writing (1) when the Registration Statement, if not
effective at the Execution Time, shall have become effective, (2) when
the U.S. Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b) or when any
Rule 462(b) Registration Statement shall have been filed with the
Commission, (3) when, prior to termination of the offering of the
Securities and the Distribution, any amendment to the Registration
Statement shall have been filed or become effective, (4) of any request
by the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any
supplement to the U.S. Prospectus or for any additional information, or
any request by any Canadian Securities Commission that the Company make
any amendment to the Canadian Preliminary Prospectus, the Canadian Final
Prospectus, the Canadian Supplemental PREP Prospectus, any Supplementary
Material or that the Company provide any additional information in
respect of the offering of the Securities, (5) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or of the Company obtaining
knowledge of the threatening of any proceeding for that purpose or the
receipt by the Company of any written communication from any Canadian
Securities Commission, the TSX or any other Governmental Authority
relating to the Prospectus or the Distribution of the Securities and (6)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for
such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order or the suspension of any such
qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(e) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the rules thereunder, the Company
promptly will (1) notify the Representatives of any such event, (2)
prepare and file with the Commission, subject to the second sentence of
paragraph (i)(d) of this Section 5, an amendment or supplement which
will correct such statement or omission or effect such compliance and
(3) supply any supplemented Prospectus to you in such quantities as you
may reasonably request.
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(f) Commencing on the date hereof and until the later of
(1) the completion of the Distribution, or (2) the time at which the Act
no longer requires a prospectus relating to the Securities to be
delivered, the Company shall promptly notify the Underwriters in writing
of:
(i) any change (actual, anticipated,
contemplated, proposed or threatened, financial or
otherwise) in the business, affairs, operations, assets,
properties, prospects, liabilities (contingent or
otherwise), capital, earnings or financial condition of
the Company or in any assumption or fact underlying any
forecast prepared by the Company and provided to the
Underwriters;
(ii) any change in any material fact (which
shall include the disclosure of any previously
undisclosed material fact) or any misstatement of any
material fact contained in the Prospectus or any
Supplementary Material;
(iii) the discovery of any new material fact
that would have been required to be disclosed in the
Prospectus or any Supplementary Material had it been
discovered prior to the date thereof; or
(iv) any change in Canadian Securities Laws or
the Act (in such case, the Company will notify the
Selling Stockholders as well);
which is, or may be, of such a nature as to render the
Prospectus or any Supplementary Material misleading or untrue in
whole or in part or would result in a misrepresentation (as such
term is defined under Canadian Securities Laws) therein or would
result in the Registration Statement, the Prospectus or any
Supplementary Material not complying with any Canadian
Securities Laws or the Act or which change, misstatement or new
material fact would reasonably be expected to have a significant
effect on the market price or value of the Securities.
(g) The Company will promptly (and in any event within
any applicable time limitation) comply with all legal requirements under
the Act, Canadian Securities Laws, and the rules and by-laws governing
the TSX and Nasdaq National Market required as a result of an event
described in Section 5(i)(f) in order to continue to qualify the
Distribution of the Securities in each of the Canadian Qualifying
Jurisdictions and the offering of the Securities in the United States
pursuant to this Agreement, including the prospectus amendment
provisions of the Canadian Securities Laws, and will prepare and file to
the satisfaction of the Underwriters any Supplementary Material which,
in the opinion of the Underwriters, may be necessary or advisable. In
addition to the provisions of Section 5(i)(f) above, the Company will,
in good faith, discuss with the Underwriters any change, event or fact
contemplated in Section 5(i)(f) which is of such a nature that there may
be reasonable doubt as to whether notice should be given to the
Underwriters under Section 5(i)(f) and will consult with the
Underwriters with respect to the form and content of any Supplementary
Material proposed to be filed by the Company, it being understood and
agreed that no such Supplementary Material will be
-19-
filed with the Commission or any Canadian Securities Commission prior to
the review and approval by the Underwriters and their counsel. The
Company shall also cooperate in all respects with the Underwriters to
allow and assist the Underwriters to participate in the preparation of
any Supplementary Material and to conduct all due diligence
investigations which the Underwriters deem appropriate in order to
fulfill their obligations as underwriters and to enable the Underwriters
to responsibly execute any certificate related to such Supplementary
Material required to be executed by them.
(h) As soon as practicable, the Company will make
generally available to its security holders and to the Representatives
an earnings statement or statements of the Company and its subsidiaries
which will satisfy the provisions of Section 11(a) of the Act and Rule
158 under the Act.
(i) The Company will furnish to the Representatives and
counsel for the Underwriters signed copies of the Registration Statement
(including exhibits thereto) and to each other Underwriter a copy of the
Registration Statement (without exhibits thereto) and, so long as
delivery of a prospectus by an Underwriter or dealer may be required by
the Act, as many copies of each Preliminary Prospectus and the
Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company shall cause commercial copies of the
Registration Statement and of the Canadian Prospectus in the English and
French languages to be delivered to the Underwriters, without charge, in
such numbers and in such places as the Underwriters may reasonably
request. Such delivery shall be effected as soon as possible and, with
respect to the Canadian Prospectus, not later than 12:00 p.m., New York
time, on the first Business Day immediately following the date hereof.
The Company shall similarly cause to be delivered commercial copies of
any Supplementary Material required to be delivered, on request to the
Underwriters or to any purchaser of Securities.
(j) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate and will maintain
such qualifications in effect so long as required for the distribution
of the Securities; provided that in no event shall the Company be
obligated to qualify to do business in any jurisdiction where it is not
now so qualified or to take any action that would subject it to service
of process in suits, other than those arising out of the offering or
sale of the Securities or taxation, in any jurisdiction where it is not
now so subject.
(k) The Company will not, without the prior written
consent of Citigroup Global Markets Inc., offer, sell, contract to sell,
pledge, or otherwise dispose of, (or enter into any transaction which is
designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company or any
affiliate of the Company or any person in privity with the Company or
any affiliate of the Company) directly or indirectly, including the
filing (or participation in the filing) of a registration statement with
the Commission in respect of, or establish or increase a put equivalent
position or liquidate or decrease a call equivalent position within the
meaning of Section 16 of the Exchange Act, any other shares of Common
Stock or any securities convertible
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into, or exercisable, or exchangeable for, shares of Common Stock; or
publicly announce an intention to effect any such transaction, for a
period of 180 days after the date of this Agreement, provided, however,
that the Company may issue and sell Common Stock pursuant to any
employee stock option plan (and may issue options thereunder), stock
ownership plan or dividend reinvestment plan of the Company in effect at
the Execution Time and the Company may issue Common Stock issuable upon
the conversion of securities or the exercise of warrants outstanding at
the Execution Time.
(l) The Company will comply with all applicable
securities and other applicable laws, rules and regulations, including,
without limitation, the Sarbanes Oxley Act, the Money Laundering Laws
and the FCPA and use its best efforts to cause the Company's directors
and officers, in their capacities as such, to comply with such laws,
rules and regulations, including, without limitation, the provisions of
the Sarbanes Oxley Act, the Money Laundering Laws and the FCPA.
(m) The Company will not take, directly or indirectly,
any action designed to or that would constitute or that might reasonably
be expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(n) The Company will not issue any press release or
public announcement between the date hereof and the Closing Date without
first consulting with the Representatives.
(o) The Company agrees to pay the costs and expenses
relating to the following matters: (i) the preparation, printing or
reproduction and filing with the Commission of the Registration
Statement (including financial statements and exhibits thereto), each
Preliminary Prospectus, the Prospectus, and each amendment or supplement
to any of them; (ii) the preparation, printing or reproduction and
filing with the Canadian Securities Commission of the Canadian
Preliminary Prospectus, the Canadian Final Prospectus and the Canadian
Supplemental PREP Prospectus, including any materials or certificates
filed therewith, and each amendment or supplement to any of them; (iii)
the printing (or reproduction) and delivery (including postage, air
freight charges and charges for counting and packaging) of such copies
of the Registration Statement, each Preliminary Prospectus, the
Prospectus, the Canadian Preliminary Prospectus, the Canadian Prospectus
and all amendments or supplements to any of them, as may, in each case,
be reasonably requested for use in connection with the offering and sale
of the Securities; (iv) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any
stamp or transfer taxes in connection with the original issuance and
sale of the Securities; (v) the printing (or reproduction) and delivery
of this Agreement, any blue sky memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (vi) the registration of the Securities
under the Exchange Act and the quotation of the Securities on the Nasdaq
National Market and the listing of the Securities on the TSX; (vii) any
registration or qualification of the Securities for offer and sale under
the securities or blue sky laws of the several states (including filing
fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such registration
-21-
and qualification); (viii) any filings required to be made with the
National Association of Securities Dealers, Inc. (including filing fees
and the reasonable fees and expenses of counsel for the Underwriters
relating to such filings); (ix) the transportation and other expenses
incurred by or on behalf of Company representatives in connection with
presentations to prospective purchasers of the Securities; (x) the fees
and expenses of the Company's accountants and the fees and expenses of
counsel (including local and special counsel) for the Company [and the
Selling Stockholders]; and (xi) all other costs and expenses incident to
the performance by the Company and the Selling Stockholders of their
obligations hereunder.
(p) The Company will use the net proceeds from the sale
of the Securities in the manner described in the Prospectus.
(q) The Company agrees to pay (1) all fees and
disbursements of counsel incurred by the Underwriters in connection with
the Directed Share Program, (2) all costs and expenses incurred by the
Underwriters in connection with the printing (or reproduction) and
delivery (including postage, air freight charges and charges for
counting and packaging) of copies of the Directed Share Program material
and (3) all stamp duties, similar taxes or duties or other taxes, if
any, incurred by the Underwriters in connection with the Directed Share
Program.
Furthermore, the Company covenants with Citigroup Global Markets
Inc. that the Company will comply with all applicable securities and
other applicable laws, rules and regulations in each foreign
jurisdiction in which the Directed Shares are offered in connection with
the Directed Share Program.
(ii) Each Selling Stockholder agrees with the several
Underwriters that:
(a) Such Selling Stockholder will not, without the prior
written consent of Citigroup Global Markets Inc., offer, sell, contract
to sell, pledge or otherwise dispose of, (or enter into any transaction
which is designed to, or might reasonably be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Selling
Stockholder or any affiliate of the Selling Stockholder or any person in
privity with the Selling Stockholder or any affiliate of the Selling
Stockholder) directly or indirectly, or file (or participate in the
filing of) a registration statement with the Commission in respect of,
or establish or increase a put equivalent position or liquidate or
decrease a call equivalent position within the meaning of Section 16 of
the Exchange Act with respect to, any shares of capital stock of the
Company or any securities convertible into or exercisable or
exchangeable for such capital stock, or publicly announce an intention
to effect any such transaction, for a period of 180 days after the date
of this Agreement, other than shares of Common Stock disposed of as bona
fide gifts approved by Citigroup Global Markets Inc.
(b) Such Selling Stockholder will not take, directly or
indirectly, any action designed to or that would constitute or that
might reasonably be expected to cause or result in, under the Exchange
Act or otherwise, stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Securities.
-22-
(c) Such Selling Stockholder will advise you promptly,
and if requested by you, will confirm such advice in writing, so long as
delivery of a prospectus relating to the Securities by an underwriter or
dealer may be required under the Act, of (i) any material change in the
Company's condition (financial or otherwise), prospects, earnings,
business or properties, (ii) any change in information in the
Registration Statement or the Prospectus relating to such Selling
Stockholder or (iii) any new material information relating to the
Company or relating to any matter stated in the Prospectus which comes
to the attention of such Selling Stockholder.
(d) Commencing on the date hereof and until the later of
(1) the completion of the Distribution, or (2) the time at which the Act
no longer requires a prospectus relating to the Securities to be
delivered, such Selling Stockholder will advise the Underwriters
promptly, and if requested by the Representatives, will confirm such
advice in writing, of:
(i) any change (actual, anticipated,
contemplated, proposed or threatened, financial or
otherwise) in the business, affairs, operations, assets,
properties, prospects, liabilities (contingent or
otherwise), capital, earnings or financial condition of
the Company or in any assumption or fact underlying any
forecast prepared by the Company and provided to the
Underwriters;
(ii) any change in any material fact (which
shall include the disclosure of any previously
undisclosed material fact) or any misstatement of any
material fact contained in the Prospectus or any
Supplementary Material;
(iii) the discovery of any new material fact
that would have been required to be disclosed in the
Prospectus or any Supplementary Material had it been
discovered prior to the date thereof; or
(iv) any change in Canadian Securities Laws or
the Act which is not otherwise brought to the attention
of the Underwriters by the Company in writing;
which comes to the attention of the Selling Stockholder
and which is, or may be, of such a nature as to render
the Prospectus or any Supplementary Material misleading
or untrue in whole or in part or would result in a
misrepresentation therein or would result in the
Prospectus or any Supplementary Material not complying
with any Canadian Securities Laws or the Act or which
change, misstatement or new material fact would
reasonably be expected to have a significant effect on
the market price or value of the Securities.
(e) Such Selling Stockholder will not issue any press
release or public announcement between the date hereof and the Closing
Date relating in any way to the offering and the sale of the Securities
without first consulting with the Representatives.
-23-
(f) Such Selling Stockholder will comply with the
agreement contained in Section 5(i)(o).
6. Conditions to the Obligations of the Underwriters. The obligations of
the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholders contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and the Selling Stockholders made in any certificates pursuant to
the provisions hereof, to the performance by the Company and the Selling
Stockholders of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become
effective prior to the Execution Time, unless the Representatives agree
in writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 p.m. New York City time on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 p.m. New York City time on such date or
(ii) 9:30 a.m. on the Business Day following the day on which the public
offering price was determined, if such determination occurred after 3:00
p.m. New York City time on such date; if filing of the U.S. Prospectus,
or any supplement thereto, is required pursuant to Rule 424(b), the U.S.
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b).
(b) The Canadian Supplemental PREP Prospectus shall have
been filed with the Canadian Securities Commissions in accordance with
the PREP Procedures.
(c) No order having the effect of ceasing or suspending
the Distribution or offering of the Securities shall have been issued or
proceedings therefor initiated or threatened by any securities
commission, securities regulatory authority, stock exchange, the Nasdaq
National Market or the TSX, and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened, and any request on the part of the Commission or any
Canadian Securities Commission for additional information shall have
been complied with to the reasonable satisfaction of the Underwriters.
(d) The Company shall have requested and caused Torys
LLP, counsel for the Company, to have furnished to the Underwriters
their opinion, dated the Closing Date and addressed to the Underwriters
and their counsel, to the effect that:
(i) each of the Company and each subsidiary
listed on Annex A hereto (individually a "Subsidiary"
and collectively the "Subsidiaries") that is organized
in Delaware or Ontario has been duly organized and is
validly existing as a corporation or partnership (as
applicable) in good standing under the laws of the
jurisdiction in which it is chartered or organized, with
full corporate or partnership (as applicable) power and
authority to own or lease, as the case may be, and to
operate its properties
-24-
and conduct its business as described in the Prospectus,
and the Company and each Subsidiary organized in
Delaware is duly qualified to do business as a foreign
corporation and is in good standing under the laws of
each jurisdiction set forth on Schedule A to such
counsel's opinion;
(ii) all the outstanding shares of capital stock
or other equity interests of each Subsidiary have been
duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise set
forth in the Prospectus, all outstanding shares of
capital stock or other equity interests of the
Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of
such counsel, after due inquiry, any other security
interest, claim, lien or encumbrance;
(iii) the Company's authorized equity
capitalization is as set forth in the Prospectus; the
capital stock of the Company conforms in all material
respects to the description thereof contained in the
Prospectus; the outstanding shares of Common Stock
(including the Securities being sold hereunder by the
Selling Stockholders) have been duly and validly
authorized and issued and are fully paid and
nonassessable; the Securities being sold hereunder by
the Company have been duly and validly authorized, and,
when issued and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; the Securities have been
approved for quotation on the Nasdaq National Market,
subject to official notice of issuance and evidence of
satisfactory distribution; the Securities have been
conditionally approved for listing on the TSX, subject
only to compliance with minimum distribution
requirements and the Company providing to the TSX
certain required routine documentation; the certificates
for the Securities have been duly approved and adopted
by the Company and are in valid and sufficient form and
comply with the requirements of the Nasdaq National
Market and the TSX; the holders of outstanding shares of
capital stock of the Company are not entitled, pursuant
to the Company's Certificate of Incorporation, the DGCL
or any contract or agreement to which the Company is a
party and known to such counsel, to preemptive or other
rights to subscribe for the Securities; and, except as
set forth in the Prospectus, no options, warrants or
other rights to purchase, agreements or other
obligations to issue, or rights to convert any
obligations into or exchange any securities for, in each
case to which the Company is a party, shares of capital
stock of or ownership interests in the Company are
outstanding;
(iv) to the knowledge of such counsel, there is
no pending or threatened action, suit or proceeding by
or before any court or Governmental Authority or any
arbitrator involving the Company or any of its
subsidiaries or its or their property of a character
required to be disclosed in the Registration Statement
or the Prospectus which is not
-25-
adequately disclosed in the Prospectus, and there is no
franchise, contract or other document of a character
required to be described in the Registration Statement
or Prospectus, or to be filed as an exhibit thereto,
which is not described or filed as required; and the
statements in the Prospectus under the headings "Risk
Factors - We currently depend on single sources for key
components of the RHEO System. The loss of any of these
sources could delay our clinical trials or prevent or
delay commercialization of the RHEO System," "Risk
Factors - Our supply agreement with Asahi Medical
requires us to transfer the FDA approval of the RHEO
System to it upon receipt which will limit our control
of the FDA approval, "Risk Factors - Future sales of our
common stock could reduce our stock price," "Risk
Factors - We have entered into a number of related party
transactions with suppliers, creditors, stockholders and
other parties, each of which may have interests which
conflict with those of our public stockholders,"
"Business - Clinical Studies - MIRA-1," "Business -
Supplier Relationships," "Reorganization," "Management,"
"Certain Relationships and Related Party Transactions,"
"Description of Capital Stock" and "Shares Eligible for
Future Sale," insofar as such statements summarize legal
matters, agreements, documents or legal proceedings
discussed therein, are accurate and fair summaries, in
all material respects, of such legal matters,
agreements, documents or legal proceedings;
(v) the Registration Statement has become
effective under the Act; any required filing of the U.S.
Prospectus, and any supplements thereto, pursuant to
Rule 424(b) has been made in the manner and within the
time period required by Rule 424(b); to the knowledge of
such counsel, no stop order suspending the effectiveness
of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or
threatened and the Registration Statement and the U.S.
Prospectus (other than the financial statements and
other financial and statistical information contained
therein, as to which such counsel need express no
opinion) comply as to form in all material respects with
the applicable requirements of the Act and the rules
thereunder; and such counsel has no reason to believe
that on the Effective Date or the date the Registration
Statement was last deemed amended the Registration
Statement 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 not misleading or that the Prospectus as of its
date and on the Closing Date included or includes any
untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading (in each
case, other than the financial statements and other
financial and statistical information contained therein,
as to which such counsel need express no opinion);
(vi) all necessary corporate action has been
taken by the Company to authorize the execution and
delivery of each of the Canadian
-26-
Preliminary Prospectus and the Canadian Final Prospectus
and the filing thereof and the Canadian Supplemental
PREP Prospectus under Canadian Securities Laws in each
of the Canadian Qualifying Jurisdictions;
(vii) all documents have been filed and all
requisite proceedings have been taken and all approvals,
permits, consents and authorizations of appropriate
regulatory authorities under Canadian Securities Laws
have been obtained to qualify the Distribution of the
Over-Allotment Option and the Securities in each of the
Canadian Qualifying Jurisdictions through investment
dealers or brokers duly registered under the Canadian
Securities Laws of each such Canadian Qualifying
Jurisdiction who have complied with the relevant
provisions of the Canadian Securities Laws of such
Canadian Qualifying Jurisdiction;
(viii) this Agreement has been duly authorized,
executed and delivered by the Company;
(ix) the Company is not and, after giving effect
to the offering and sale of the Securities and the
application of the proceeds thereof as described in the
Prospectus, will not be, an "investment company" as
defined in the Investment Company Act of 1940, as
amended;
(x) no consent, approval, authorization, filing
with or order of any U.S. Federal, New York or Delaware
State or Canadian court or Governmental Authority is
required in connection with the transactions
contemplated herein, except such as have been obtained
under the Act and the Canadian Securities Laws and such
as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in
the manner contemplated in this Agreement and in the
Prospectus and such other approvals (specified in such
opinion) as have been obtained;
(xi) neither the issue and sale of the
Securities, nor the consummation of any other of the
transactions herein contemplated nor the fulfillment of
the terms hereof will conflict with, result in a breach
or violation of, or imposition of any lien, charge or
encumbrance upon any property or assets of the Company
or its subsidiaries pursuant to, (i) the charter or
by-laws of the Company or its subsidiaries, (ii) the
terms of any indenture, contract, lease, mortgage, deed
of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument
known to such counsel to which the Company or its
subsidiaries is a party or bound or to which its or
their property is subject; or (iii) any statute, law,
rule, regulation, judgment, order or decree known to
such Counsel to be applicable to the Company or its
subsidiaries of any U.S. Federal, New York or Delaware
State or Canadian court, regulatory body, administrative
agency, Governmental Authority, arbitrator or other
-27-
authority having jurisdiction over the Company or its
subsidiaries or any of its or their properties;
(xii) the Securities are qualified investments
under the Income Tax Act (Canada) and the regulations
thereunder (the "Tax Act") for trusts governed by
registered retirement savings plans, registered
retirement income funds, deferred profit sharing plans
and registered education savings plans (collectively,
"Plans") and will constitute foreign property for the
purposes of the tax imposed under Part XI of the Tax Act
on Plans (other than registered education savings
plans), registered pension plans and other tax exempt
entities;
(xiii) no holders of securities of the Company
have rights to the registration of such securities under
the Registration Statement, except for such rights as
have been satisfied or waived;
(xiv) each of the transactions included in the
Reorganization (as defined in the Prospectus) has been
completed as described in the Prospectus; and
(xv) such other matters as the Underwriters may
reasonably request.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of New York or the
Province of Ontario and the laws of Canada applicable therein, and as to matters
involving the application of laws other than the Delaware General Corporation
Law (the "DGCL") or the Federal laws of the United States, in each case, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are reasonably
satisfactory to counsel for the Underwriters, including the opinion of Holland &
Knight LLP, Florida counsel to the Company, and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials. References to the Prospectus in this paragraph (d)
shall also include any supplements thereto at the Closing Date.
(e) The Company shall have requested and caused Morgan,
Lewis & Bockius LLP, intellectual property counsel for the Company, to
have furnished to the Underwriters their opinion, dated the Closing Date
and addressed to the Underwriters and their counsel, to the effect that:
(i) the Company is the record owner of U.S.
patent number 6,551,266 (the "Owned Patent") and such
patent is valid and subsisting;
(ii) the Company is the exclusive licensee of
U.S. patent number 6,245,038 (the "Licensed Patent" and
together with the Owned Patent, the "Patents") and, upon
reexamination of such patent, such counsel believes that
it is reasonably likely that a more detailed claim set
will be issued and valid;
-28-
(iii) the Patents are entitled to a statutory
presumption of validity and of ownership by the
respective assignees and, to such counsel's knowledge,
there are no liens which have been filed against any of
the Patents;
(iv) such counsel has conducted prior art
searches for each of the Patents;
(v) the Company's Owned Patent application filed
in the U.S. (the "Owned Patent Application") was
properly prepared and filed on behalf of the Company,
disclosed patentable subject matter and, to the best of
such counsel's knowledge, the Company complied with all
applicable examination requirements of duty of candor
and disclosure with respect to the Owned Patent
Application;
(vi) the inventions described in the Owned
Patent Application were assigned to the Company and, to
the best of such counsel's knowledge, no other entity or
individual has any right or claim in any of such
inventions or the Owned Patent;
(vii) the Company's pending patent application
filed in the U.S. (the "Pending Application") has been
properly prepared and filed on behalf of the Company,
discloses patentable subject matter and is being
diligently pursued by the Company and, to the best of
such counsel's knowledge, the Company has complied with
all applicable examination requirements of duty of
candor and disclosure with respect to the Pending
Application;
(viii) the Company is the record owner of the
Pending Application, the inventions described in the
Pending Application are assigned to the Company and, to
the best of such counsel's knowledge, no other entity or
individual has any right or claim in any of the
inventions, Pending Application or any patent to be
issued therefrom;
(ix) the statements contained in the
Registration Statement and Prospectus including, but not
limited to, the statements under the captions "Risk
Factors - If we are unable to protect our intellectual
property rights, our competitive position could be
harmed," "Risk Factors - Third party claims of
infringement or other claims against us could require us
to redesign our products, seek licenses, or engage in
future costly intellectual property litigation, which
could impact our future business and financial
performance" and "Business - Intellectual Property"
(collectively, the "Intellectual Property Portion") are
accurate descriptions of the Patents and the Pending
Application and fairly summarizes the legal matters,
documents and proceedings relating thereto of which such
counsel is aware;
-29-
(x) except as disclosed in the Prospectus, such
counsel is not aware or has not been put on notice of
any valid patent that is or would be infringed by the
activities of the Company in the manufacture, use or
sale of any presently proposed product, as described in
the Prospectus;
(xi) except as disclosed in the Prospectus, such
counsel is not aware of any pending or threatened
judicial or governmental proceedings relating to patents
or proprietary information to which the Company is a
party or of which any property of the Company is
subject, including any interference, reexamination,
reissue or declaratory action proceeding, and such
counsel is not aware of any pending or threatened
action, suit or claim by others that the Company is
infringing or otherwise violating any patent rights of
others, nor is such counsel aware of any rights of third
parties to any of the Company's inventions described in
the Pending Application or the Patents which could
reasonably be expected to materially affect the ability
of the Company to conduct its business as described in
the Registration Statement and Prospectus;
(xii) to such counsel's knowledge, no third
party is infringing any of the Patents; and
(xiii) such counsel has no reason to believe
that the information contained in the Intellectual
Property Portion of the Registration Statement, as of
the Effective Date, and the Prospectus, as of its date,
contained any untrue statement of a material fact or
omitted to state any material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws other than the Federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials.
(f) The Company shall have requested and caused Buc &
Beardsley, U.S. Food and Drug Administration ("FDA") counsel for the
Company, to have furnished to the Underwriters their opinion, dated the
Closing Date and addressed to the Underwriters and their counsel, to the
effect that:
(i) the statements contained in the Registration
Statement and Prospectus under the captions "Risk
Factors - Even if we complete MIRA-1, we may not receive
FDA approval to market the RHEO System in the United
States," "Risk Factors - If we or our suppliers fail to
comply with the extensive regulatory requirements to
which we and the RHEO System are subject, the RHEO
System could be subject to restrictions or withdrawals
from the market and we could be subject to penalties"
and
-30-
"Business - Government Regulation," (collectively, the
"FDA Portion") insofar as such statements purport to
summarize provisions of the Federal Food, Drug, and
Cosmetic Act (the "FFDCA") and implementing regulations
are correct in all material respects of the provisions
of the FFDCA and the regulations thereunder purported to
be summarized under such captions in the Registration
Statement and the Prospectus; and
(ii) although such counsel has made no
independent inquiry, nothing has come to such counsel's
attention that leads them to believe that the statements
contained in the FDA Portion of the Registration
Statement, as of the Effective Date, and in the FDA
Portion of the Prospectus, as of its date, contained any
untrue statement of a material fact related to FDA
regulatory matters or omitted to state any material fact
related to FDA regulatory matters necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact, to the
extent they deem proper, on certificates of responsible officers of the Company
and public officials.
(g) The Major Selling Stockholders shall have requested
and caused Thompson Coburn LLP, special counsel for the Major Selling
Stockholders, to have furnished to the Underwriters their opinion dated
the Closing Date and addressed to the Underwriters and their counsel, to
the effect that:
(i) this Agreement and the Custody Agreement and
Power of Attorney have been duly authorized, executed
and delivered by the Major Selling Stockholders, the
Custody Agreement is valid and binding on the Major
Selling Stockholders and each Major Selling Stockholder
has full legal right and authority to sell, transfer and
deliver in the manner provided in this Agreement and the
Custody Agreement the Securities being sold by such
Selling Stockholder hereunder;
(ii) assuming that each Underwriter acquires its
interest in the Securities it has purchased from such
Selling Stockholder without notice of any adverse claim
(within the meaning of Section 8-105 of the UCC), each
Underwriter that has purchased such Securities delivered
on the Closing Date to The Depository Trust Company or
other securities intermediary by making payment therefor
as provided herein, and that has had such Securities
credited to the securities account or accounts of such
Underwriters maintained with The Depository Trust
Company or such other securities intermediary will have
acquired a security entitlement (within the meaning of
Section 8-102(a)(17) of the UCC) to such Securities
purchased by such Underwriter, and no action based on an
adverse claim (within the meaning of Section 8-105 of
the UCC) may be asserted against such Underwriter with
respect to such Securities;
-31-
(iii) to such counsel's knowledge, no consent,
approval, authorization or order of any court or
Governmental Authority is required for the consummation
by any Selling Stockholder of the transactions
contemplated herein, except such as may have been
obtained under the Act, Ontario securities laws and such
as may be required under the blue sky laws of any
jurisdiction in connection with the purchase of the
Securities by the Underwriters and such other approvals
(specified in such opinion) as have been obtained; and
(iv) neither the sale of the Securities being
sold by any Selling Stockholder nor the consummation of
any other of the transactions herein contemplated by any
Selling Stockholder or the fulfillment of the terms
hereof by any Selling Stockholder will conflict with,
result in a breach or violation of, or constitute a
default under any law or, with respect to TLC Vision
Corporation ("TLC") only, the terms of any indenture or
other agreement or instrument filed as an exhibit to
TLC's 2003 Form 10-K, or any judgment, order or decree
known to such counsel to be applicable to any Selling
Stockholder or any of its subsidiaries of any court,
regulatory body, administrative agency, Governmental
Authority or arbitrator having jurisdiction over any
Selling Stockholder or any of its subsidiaries.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of New York, and as
to matters involving the application of laws other than the Delaware General
Corporation Law (the "DGCL") or the Federal laws of the United States, in each
case, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Underwriters, including the opinion of
Stewart McKelvey Stirling Scales, Canadian counsel to TLC, and (B) as to matters
of fact, to the extent they deem proper, on certificates of the Major Selling
Stockholders and their respective responsible officers and public officials.
(h) TLC shall have requested and caused Stewart McKelvey
Stirling Scales, Canadian counsel for TLC, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to
the Representatives, to the effect that:
(i) TLC is a corporation validly existing under
the laws of the Province of New Brunswick;
(ii) this Agreement and the Custody Agreement
and Power of Attorney have been duly authorized by all
necessary corporate action on the part of TLC and has
been duly executed and delivered by TLC;
(iii) TLC has the corporate power and capacity
to sell, transfer and deliver, in the manner provided in
this Agreement and the Custody Agreement, the Securities
being sold by TLC hereunder;
(iv) no consent, approval, authorization or
order of any court or governmental agency or body of the
Province of New Brunswick or of
-32-
Canada is required in connection with the consummation
by TLC of the transactions contemplated herein;
(v) neither the sale of the Securities being
sold by TLC or the performance by TLC of its obligations
under this Agreement or the fulfillment of the terms
hereof by TLC will conflict with, result in a breach or
violation of, or constitute default under (i) any law of
the Province of New Brunswick or any federal law of
Canada, (ii) the articles or by-laws of TLC or (iii) the
terms of any indenture or other agreement or instrument
known to such counsel and to which TLC or any of its
subsidiaries is a party or bound, or any judgment, order
or decree known to such counsel to be applicable to TLC
or any of its subsidiaries of any New Brunswick or
Canadian court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over
TLC or any of its subsidiaries; and
(vi) all documents have been filed and all
requisite proceedings have been taken and all approvals,
permits, consents and authorizations of the securities
regulatory authorities of each of the Atlantic Provinces
(as defined is such opinion) have been obtained to
qualify the distribution of the Securities in each of
the Atlantic Provinces through investment dealers or
brokers duly registered under the applicable Securities
Laws (as defined is such opinion) who have complied with
the relevant provisions of such applicable Securities
Laws.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than Canada or the Province of New
Brunswick, to the extent they deem proper and specified in such opinion, upon
the opinion of other counsel of good standing whom they believe to be reliable
and who are satisfactory to counsel for the Underwriters and (B) as to matters
of fact, to the extent they deem proper, on certificates of responsible officers
of the Company and public officials.
(i) The Representatives shall have received from Piper
Rudnick LLP, U.S. counsel for the Underwriters, and Stikeman Elliot LLP,
Canadian counsel for the Underwriters, such opinion or opinions, dated
the Closing Date and addressed to the Representatives, with respect to
the issuance and sale of the Securities, the Registration Statement, the
U.S. Prospectus (together with any supplement thereto), the Canadian
Prospectus and other related matters as the Representatives may
reasonably require, and the Company and each Selling Stockholder shall
have furnished to such counsel such documents as they reasonably request
for the purpose of enabling them to pass upon such matters.
(j) The Company shall have furnished to the
Representatives certificates dated the Closing Date, signed by
appropriate officers of the Company, addressed to the Underwriters and
their counsel, with respect to the charter and by-laws of the Company,
all resolutions of the board of directors of the Company and other
corporate action relating to this Agreement and to the authorization,
issue and sale of the
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Securities, the incumbency and specimen signatures of signing officers
and with respect to such other matters as the Underwriters may
reasonably request;
(k) The Company shall have furnished to the
Representatives a certificate of the Company, signed by the Chief
Executive Officer and Chief Financial Officer of the Company in their
capacities as such and not individually, dated the Closing Date, to the
effect that the signers of such certificate have carefully examined the
Registration Statement, the U.S. Prospectus, any supplements to the U.S.
Prospectus, the Canadian Prospectus, any Supplementary Material and this
Agreement and that:
(i) the representations and warranties of the
Company in this Agreement are true and correct on and as
of the Closing Date with the same effect as if made on
the Closing Date and the Company has complied with all
the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or, to
the Company's knowledge, threatened;
(iii) no order, ruling or determination having
the effect of suspending the sale or ceasing the trading
of the Securities or any other securities of the Company
has been issued or made by any Governmental Authority
and is continuing in effect and no proceedings for that
purpose have been instituted or are pending or, to the
knowledge of the Company, contemplated or threatened by
any Governmental Authority;
(iv) since December 31, 2003, there has been no
material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties
of the Company and its subsidiaries taken as a whole,
whether or not arising from transactions in the ordinary
course of business, except as set forth in or
contemplated in the Prospectus (exclusive of any
supplement thereto); and
(v) such other matters as the Underwriters may
reasonably request.
(l) Each Selling Stockholder shall have furnished to the
Representatives a certificate, signed by the Attorneys-in-Fact appointed
in the Custody Agreement, dated the Closing Date, to the effect that
such Selling Stockholder has carefully examined the Registration
Statement, the U.S. Prospectus, any supplement to the U.S. Prospectus,
the Canadian Prospectus and any Supplementary Material and this
Agreement and that the representations and warranties of such Selling
Stockholder in this Agreement are true and correct in all material
respects on and as of the Closing Date to the same effect as if made on
the Closing Date and that such Selling Stockholder has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date.
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(m) The Company shall have requested and caused Ernst &
Young LLP to have furnished to the Underwriters letters, at the
Execution Time and at the Closing Date, dated respectively as of the
Execution Time and as of the Closing Date (with the requisite procedures
to be completed by such auditors no later than two Business Days prior
to the Execution Time and the Closing Date), in form and substance
reasonably satisfactory to the Representatives, confirming that they are
an independent registered public accounting firm within the meaning of
the Act and the applicable rules and regulations adopted by the
Commission thereunder and that they are independent public accountants
as required under Canadian Securities Laws, and that they have performed
a review of the unaudited interim financial information of the Company
and OccuLogix, L.P. for the nine-month period ended September 30, 2004
and as at September 30, 2004, in accordance with Statement on Auditing
Standards No. 100, and stating in effect that:
(i) in their opinion the audited financial
statements included in the Registration Statement and
the Prospectus and reported on by them comply as to form
in all material respects with the applicable accounting
requirements of the Act and the related rules and
regulations adopted by the Commission and with the
applicable accounting requirements of the Canadian
Securities Laws;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the
Company and its subsidiaries and OccuLogix, L.P.; their
limited review, in accordance with standards established
under Statement on Auditing Standards No. 100, of the
unaudited interim financial information for the
nine-month period ended September 30, 2004, and as at
September 30, 2004; carrying out certain specified
procedures (but not an examination in accordance with
U.S. generally accepted auditing standards) which would
not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a
reading of the minutes of the meetings of the
stockholders, partners, board of directors, audit
committee and all other committees of the Company and
its subsidiaries and OccuLogix, L.P.; and inquiries of
certain officials of the Company and OccuLogix, L.P. who
have responsibility for financial and accounting matters
of the Company and its subsidiaries and OccuLogix, L.P.
as to transactions and events subsequent to September
30, 2004, nothing came to their attention which caused
them to believe that:
(1) any unaudited financial statements
included in the Registration Statement and the
Prospectus do not comply as to form in all
material respects with applicable accounting
requirements of the Act and the Exchange Act and
with the related rules and regulations adopted
by the Commission and the applicable accounting
requirements of the Canadian Securities Laws
with respect to such financial statements; and
said unaudited financial statements are not in
conformity with U.S. generally
-35-
accepted accounting principles applied on a
basis substantially consistent with that of the
audited financial statements included in the
Registration Statement and the Prospectus; and
(2) with respect to the period
subsequent to September 30, 2004, there were any
changes, at a specified date not more than two
days prior to the date of the letter, in the
capital stock of the Company or partners'
capital of OccuLogix, L.P., increases in due to
stockholders, convertible debentures due to
stockholders and long-term convertible
debentures of the Company and its subsidiaries
or increases in due to related parties of
OccuLogix, L.P. or increases in net current
liabilities or stockholders' deficiency of the
Company or increases in net current liabilities
or partners' deficit of OccuLogix, L.P. as
compared with the amounts shown on the September
30, 2004 consolidated balance sheet of the
Company and the September 30, 2004 balance sheet
of OccuLogix, L.P., as applicable, included in
the Registration Statement and the Prospectus,
or for the period from October 1, 2004 to such
specified date there were any decreases, as
compared with the corresponding period in the
preceding year, in revenues or increases, as
compared with the corresponding period in the
preceding year, in total or per share amounts of
net loss for the period of the Company and its
subsidiaries and OccuLogix, L.P., except in all
instances for changes, decreases or increases
set forth in such letter, in which case the
letter shall be accompanied by an explanation by
the Company or OccuLogix, L.P., as applicable,
as to the significance thereof unless said
explanation is not deemed necessary by the
Underwriters;
(iii) they have performed certain other
specified procedures as a result of which they
determined that certain information of an accounting,
financial or statistical nature (which is limited to
accounting, financial or statistical information derived
from the general accounting records of the Company and
its subsidiaries and OccuLogix, L.P.) set forth in the
Registration Statement, the U.S. Prospectus and the
Canadian Final Prospectus, including the information set
forth under the captions "Summary Historical and Pro
Forma Consolidated Financial Data," "Capitalization" and
"Selected Consolidated Financial Data" in the
Registration Statement and the Prospectus, agrees with
the accounting records of the Company and its
subsidiaries and OccuLogix, L.P., excluding any
questions of legal interpretation; and
(iv) on the basis of a reading of the unaudited
pro forma financial statements included in the
Registration Statement and the Prospectus (the "pro
forma financial statements"); carrying out certain
specified procedures; inquiries of certain officials of
the Company and OccuLogix, L.P. who have responsibility
for financial and accounting
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matters; and proving the arithmetic accuracy of the
application of the pro forma adjustments to the
historical amounts in the pro forma financial
statements, nothing came to their attention which caused
them to believe that the pro forma financial statements
do not comply as to form in all material respects with
the applicable accounting requirements of Rule 11-02 of
Regulation S-X or the Canadian Securities Laws or that
the pro forma adjustments have not been properly applied
to the historical amounts in the compilation of such
statements.
References to the Prospectus in this paragraph (m)
include any supplement thereto at the date of the
letter.
(n) The Company shall have furnished to the Underwriters
letters of its chief financial officer, at the Execution Time and at the
Closing Date, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance reasonably satisfactory to the
Representatives, stating his conclusions and findings with respect to
financial information contained in the Prospectus and not otherwise
covered by the letters described in Section 6(m) hereof.
(o) Subsequent to the Execution Time or, if earlier, the
dates as of which information is given in the Registration Statement
(exclusive of any amendment thereof), the U.S. Prospectus (exclusive of
any supplement thereto) and the Canadian Prospectus, there shall not
have been (i) any change or decrease specified in the letter or letters
referred to in paragraph (m) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties of
the Company and its subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the U.S. Prospectus (exclusive of any
supplement thereto) and the Canadian Prospectus, and the Underwriters
shall not have become aware of any undisclosed material adverse
information relating to the Company and its subsidiaries, or other
adverse material development, the effect of which, in any case referred
to in clause (i) or (ii) above, is, in the sole judgment of the
Underwriters, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any
amendment thereof), the U.S. Prospectus (exclusive of any supplement
thereto) and the Canadian Prospectus.
(p) Prior to the Closing Date, the Company and the
Selling Stockholders shall have furnished to the Representatives such
further information, certificates and documents as the Representatives
may reasonably request.
(q) Subsequent to the Execution Time, there shall not
have been any decrease in the rating of any of the Company's debt
securities by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) or
any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not indicate
the direction of the possible change.
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(r) The Securities shall have been approved for
quotation on the Nasdaq National Market, subject only to official notice
of issuance.
(s) The Securities shall be listed and posted for
trading on the TSX at the opening of trading on the Closing Date.
(t) At or prior to the Execution Time, the Company shall
have furnished to the Representatives a letter substantially in the form
of Exhibit A hereto from each officer and director of the Company and
each Major Selling Stockholder addressed to the Underwriters.
(u) At or prior to the Execution Time, each of the
transactions included in the Reorganization (as defined and described in
the Prospectus) shall have been completed to the satisfaction of the
Underwriters and their counsel.
(v) The Company shall have requested and caused
Desjardins Ducharme Stein Monast to have furnished to the Underwriters
an opinion, dated the Closing Date and addressed to the Underwriters and
their counsel, in form and substance reasonably satisfactory to the
Underwriters and their counsel, regarding compliance with all the laws
of the Province of Quebec relating to the use of the French language in
connection with the documents (including the Canadian Prospectus, any
Supplementary Material, forms of order and confirmation and certificates
representing the Securities) to be delivered to purchasers of the
Securities in the Province of Quebec.
(w) The Underwriters shall have received on the Closing
Date such other certificates, statutory declarations, agreements or
materials, in form and substance reasonably satisfactory to the
Underwriters and their counsel, as the Underwriters and their counsel
may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled when and as provided in this Agreement, or if any of the
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be reasonably satisfactory in form and substance to the Underwriters and
counsel for the Underwriters, this Agreement and all obligations of the
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by the Representatives. Notice of such cancellation shall be given to the
Company and each Selling Stockholder in writing or by telephone or facsimile
confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Piper Rudnick LLP, U.S. counsel for the
Underwriters, at 1251 Avenue of the Americas, New York, New York 10020,
Attention: Marjorie Sybul Adams, on the Closing Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company or any Selling
Stockholders to perform any agreement herein or comply with any provision hereof
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally through Citigroup Global Markets Inc. on
demand for all out-of-pocket expenses
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(including reasonable fees and disbursements of counsel) that shall have been
incurred by them in connection with the proposed purchase and sale of the
Securities. If the Company is required to make any payments to the Underwriters
under this Section 7 because of any Selling Stockholder's refusal, inability or
failure to satisfy any condition to the obligations of the Underwriters set
forth in Section 6, the Selling Stockholders pro rata in proportion to the
percentage of Securities to be sold by each shall reimburse the Company on
demand for all amounts so paid.
8. Indemnification and Contribution.
(a) The Company and each of the Major Selling
Stockholders jointly and severally agree to indemnify and hold harmless
each Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the
meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they
or any of them may become subject under the Act, the Exchange Act,
Canadian Securities Laws or any other Federal, state or provincial
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the registration statement for
the registration of the Securities as originally filed or in any
amendment thereof, or in the U.S. Preliminary Prospectus, the Canadian
Preliminary Prospectus, the Canadian Final Prospectus, the Canadian
Supplemental PREP Prospectus or the Prospectus, or in any amendment
thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, and agree to reimburse each such indemnified party, as
incurred, for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company and the
-------- ------- Major Selling Stockholders will not be liable in any
such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the
Representatives specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Company or the
Major Selling Stockholders may otherwise have.
(b) Each Other Selling Stockholder severally agrees to
indemnify and hold harmless the Company, each of its directors, each of
its officers who signs the Registration Statement, each Underwriter, the
directors, officers, employees and agents of each Underwriter and each
person who controls the Company or any Underwriter within the meaning of
either the Act or the Exchange Act and each other Selling Stockholder,
if any, to the same extent as the foregoing indemnity from the Company
and the Major Selling Stockholders to each Underwriter, but only with
reference to written information furnished to the Company by or on
behalf of such Other Selling Stockholder specifically for inclusion in
the documents referred to in the foregoing indemnity. This indemnity
-39-
agreement will be in addition to any liability which any Other Selling
Stockholder may otherwise have.
(c) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of
its officers who signs the Registration Statement, and each person who
controls the Company within the meaning of either the Act or the
Exchange Act and each Selling Stockholder, to the same extent as the
foregoing indemnity to each Underwriter, but only with reference to
written information relating to such Underwriter furnished to the
Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have. The Company and each Selling
Stockholder acknowledge that the statements set forth in the last
paragraph of the cover page regarding delivery of the Securities and,
under the heading "Underwriting," (i) the list of Underwriters and their
respective participation in the sale of the Securities, (ii) the
sentences related to concessions and reallowances and (iii) the
paragraph related to stabilization, syndicate covering transactions and
penalty bids in any Preliminary Prospectus and the Prospectus constitute
the only information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(d) The Company agrees to indemnify and hold harmless
Citigroup Global Markets Inc., the directors, officers, employees and
agents of Citigroup Global Markets Inc. and each person, who controls
Citigroup Global Markets Inc. within the meaning of either the Act or
the Exchange Act ("Citigroup Entities"), from and against any and all
losses, claims, damages and liabilities to which they may become subject
under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law or otherwise (including, without
limitation, any legal or other expenses reasonably incurred in
connection with defending or investigating any such action or claim),
insofar as such losses, claims damages or liabilities (or actions in
respect thereof) (i) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the
prospectus wrapper material prepared by or with the consent of the
Company for distribution in foreign jurisdictions in connection with the
Directed Share Program attached to the Prospectus or any preliminary
prospectus, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statement therein, when considered in
conjunction with the Prospectus or any applicable preliminary
prospectus, not misleading; (ii) caused by the failure of any
Participant to pay for and accept delivery of the securities which
immediately following the Effective Date of the Registration Statement,
were subject to a properly confirmed agreement to purchase; or (iii)
related to, arising out of, or in connection with the Directed Share
Program, except that this clause (iii) shall not apply to the extent
that such loss, claim, damage or liability is finally judicially
determined to have resulted primarily from the gross negligence or
willful misconduct of the Citigroup Entities.
(e) Promptly after receipt by an indemnified party under
this Section 8 of notice of the commencement of any action, such
indemnified party will, if a claim in
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respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will
not relieve it from liability under paragraph (a), (b) (c) or (d) above
unless and to the extent it did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve
the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraph (a),
(b), (c) or (d) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for
which indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any
separate counsel retained by the indemnified party or parties except as
set forth below); provided, -------- however, that such counsel shall be
reasonably satisfactory to the indemnified ------- party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local
counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel if (i) the use of counsel
chosen by the indemnifying party to represent the indemnified party
would present such counsel with a conflict of interest, (ii) the actual
or potential defendants in, or targets of, any such action include both
the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded based on advice of counsel that
there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent
the indemnified party within a reasonable time after notice of the
institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
pending or threatened claim, action, suit or proceeding in respect of
which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes
an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding. It is understood
that the indemnifying party shall not, in connection with any proceeding
or related proceedings in the same jurisdiction, be liable for the
reasonable fees and expenses of more than one separate firm for all such
indemnified parties. Such firm shall be designated in writing by the
Representatives in the case of parties indemnified pursuant to paragraph
(a) or (d) and by the Company in the case of parties indemnified
pursuant to paragraph (b) or (c). The indemnifying party shall not be
liable for any settlement of any proceeding effected without its written
consent but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
Notwithstanding anything contained herein to the contrary, if indemnity
may be sought pursuant to Section 8(d) hereof in respect of such action
or proceeding, then in addition to such separate firm for the
indemnified parties, the indemnifying party shall be liable for
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the reasonable fees and expenses of not more than one separate firm (in
addition to any local counsel) for Citigroup Global Markets Inc., the
directors, officers, employees and agents of Citigroup Global Markets
Inc., and all persons, if any, who control Citigroup Global Markets Inc.
within the meaning of either the Act or the Exchange Act for the defense
of any losses, claims, damages and liabilities arising out of the
Directed Share Program.
(f) In the event that the indemnity provided in
paragraph (a), (b) (c) or (d) of this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party for any reason, the
Company and the Major Selling Stockholders, jointly and severally, the
Other Selling Stockholders severally and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "Losses")
to which the Company, the Major Selling Stockholders, the Other Selling
Stockholders and one or more of the Underwriters may be subject in such
proportion as is appropriate to reflect the relative benefits received
by the Company, the Major Selling Stockholders and the Other Selling
Stockholders on the one hand and by the Underwriters on the other from
the offering of the Securities; provided, however, that in no case shall
any Underwriter (except as may be provided -------- ------- in any
agreement among underwriters relating to the offering of the Securities)
be responsible for any amount in excess of the underwriting discount or
commission applicable to the Securities purchased by such Underwriter
hereunder. If the allocation provided by the immediately preceding
sentence is unavailable for any reason, the Company and the Major
Selling Stockholders, jointly and severally, the Other Selling
Stockholders severally and the Underwriters severally shall contribute
in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Company, the Major Selling
Stockholders and the Other Selling Stockholders on the one hand and of
the Underwriters on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant
equitable considerations. Benefits received by the Company and the
Selling Stockholders shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses) received by them,
and benefits received by the Underwriters shall be deemed to be equal to
the total underwriting discounts and commissions, in each case as set
forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or
any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information
provided by the Company or the Selling Stockholders on the one hand or
the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this
paragraph (f), no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same
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rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act,
each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, subject in each case to the applicable
terms and conditions of this paragraph (f).
(g) The liability of each Selling Stockholder under such
Selling Stockholder's representations and warranties contained in
Section 1 hereof and under the indemnity and contribution agreements
contained in this Section 8 shall be limited to an amount equal to the
initial public offering price of the Securities sold by such Selling
Stockholder to the Underwriters. The Company and the Selling
Stockholders may agree, as among themselves and without limiting the
rights of the Underwriters under this Agreement, as to the respective
amounts of such liability for which they each shall be responsible.
9. Default by an Underwriter. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter, the
Selling Stockholders or the Company. In the event of a default by any
Underwriter as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding five Business Days, as the Representatives shall
determine in order that the required changes in the Registration Statement and
the Prospectus or in any other documents or arrangements may be effected.
Nothing contained in this Agreement shall relieve any defaulting Underwriter of
its liability, if any, to the Company, the Selling Stockholders and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) (x) trading in the Company's Common Stock shall have been suspended by the
Commission, any of the Canadian Securities Commissions, the Nasdaq National
Market or the TSX or trading in securities generally on the New York Stock
Exchange, the Nasdaq National Market or (y) the TSX shall have been suspended or
limited or minimum prices shall have been established on such Exchange, the
Nasdaq National Market or the TSX, (ii) a banking moratorium shall have been
declared either by Federal, New York State or Canadian authorities or (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States or Canada of a national emergency or war, or other calamity
or crisis the effect of which on financial markets is such as
-43-
to make it, in the sole judgment of the Representatives, impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of each Selling Stockholder and of the Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Underwriter,
any Selling Stockholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the Citigroup Global Markets Inc. General Counsel (fax
no.: (212) 816-7912) and confirmed to Citigroup Global Markets Inc., at 388
Greenwich Street, New York, New York 10013, Attention: General Counsel; or, if
sent to the Company, will be mailed, delivered or telefaxed to OccuLogix, Inc.,
2600 Skymark Drive, Unit 9, Suite 201, Mississauga, Ontario L4N 5B2, Attention:
Chief Executive Officer (fax no.: (905) 602-7623); or if sent to any Selling
Stockholder, will be mailed, delivered or telefaxed and confirmed to it at the
address set forth in Schedule II hereto.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday,
a Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in New York,
New York or Toronto, Ontario.
-44-
"Canadian Securities Commissions" means, collectively,
the securities commissions or other securities regulatory authorities in
each of the Canadian Qualifying Jurisdictions.
"Canadian Securities Laws" means all applicable
securities laws in each of the Canadian Qualifying Jurisdictions
emanating from Governmental Authorities, including the respective rules
and regulations made thereunder together with applicable published
national and local instruments, policy statements, notices, blanket
rulings and orders of the Canadian Securities Commissions, all
discretionary rulings and orders applicable to the Company, if any, of
the Canadian Securities Commissions and all rules, by-laws and
regulations governing the TSX, all as the same are in effect at the date
hereof and as amended, supplemented or replaced from time to time during
the period of Distribution.
"Commission" shall mean the Securities and Exchange
Commission.
"Distribution" means "distribution" or "distribution to
the public" of the Securities as those terms are defined in Canadian
Securities Laws.
"Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.
"Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
"Governmental Authority" means any (a) multinational,
federal, provincial, state, regional, municipal, local or other
government, governmental or public department, central bank, court,
tribunal, arbitral body, bureau or agency, domestic or foreign, (b) any
subdivision, agent, commission, board, or authority of any of the
foregoing, or (c) any quasi- governmental or private body exercising any
regulatory, expropriation or taxing authority under or for the account
of any of the foregoing, and any stock exchange or self-regulatory
authority and, for greater certainty, includes the Canadian Securities
Commissions, the TSX, Market Regulation Services Inc. and the FDA.
"Laws" means applicable securities laws and all other
statutes, regulations, statutory rules, orders, by-laws, codes,
ordinances, decrees, the terms and conditions of any grant of approval,
permission, authority or license, or any judgment, order, decision,
ruling, award, policy or guideline, of any Governmental Authority, and
the term "applicable" with respect to such Laws and in the context that
refers to one or more persons, means that such Laws apply to such person
or persons or its or their business, undertaking, property or securities
and emanate from a Governmental Authority, having jurisdiction over the
person or persons or its or their business, undertaking, property or
securities.
-45-
"MRRS" means the mutual reliance review system
procedures provided for under National Policy 43-201 - Mutual Reliance
Review System for Prospectuses and Annual Information Forms.
"Preliminary U.S. Prospectus" shall mean any preliminary
prospectus referred to in paragraph l(i)(a) above and any preliminary
prospectus included in the Registration Statement at the Effective Date
that omits Rule 430A Information.
"Registration Statement" shall mean the registration
statement referred to in paragraph 1(i)(a) above, including exhibits and
financial statements, as amended at the Execution Time (or, if not
effective at the Execution Time, in the form in which it shall become
effective) and, in the event any post-effective amendment thereto or any
Rule 462(b) Registration Statement becomes effective prior to the
Closing Date, shall also mean such registration statement as so amended
or such Rule 462(b) Registration Statement, as the case may be. Such
term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such
rules under the Act.
"Rule 430A Information" shall mean information with
respect to the Securities and the offering thereof permitted to be
omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to Rule
462(b) relating to the offering covered by the registration statement
referred to in Section 1(a) hereof.
"Selling Firms" means such investment dealers and
brokers through which the Underwriters may sell Securities to the public
under the terms of this Agreement.
"Taxes" includes all forms of taxation (including,
without limitation, any net income or gains, minimum, gross income,
gross receipts, sales, use, ad valorem, value-added, transfer,
franchise, profits, license, withholding, payroll, employment, excise,
severance, stamp, capital stock, occupation, property, custom,
environmental or windfall tax or duty), together with interest,
penalties and additions imposed with respect to the foregoing, imposed
by any local, municipal, state, provincial, Federal or other government,
governmental entity or political subdivision, whether of Canada, the
United States or other country or political unit.
"Tax Return" means all returns, declarations,
statements, reports, schedules, forms and information returns, whether
original or amended, relating to Taxes.
"TSX" means the Toronto Stock Exchange.
"U.S. Prospectus" shall mean the prospectus relating to
the Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to
-46-
Rule 424(b) is required, shall mean the form of final prospectus
relating to the Securities included in the Registration Statement at the
Effective Date.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholders and the several Underwriters.
Very truly yours,
OCCULOGIX, INC.
By:
-------------------------------------------
Name:
Title:
SELLING STOCKHOLDERS LISTED ON SCHEDULE II HERETO
By:
--------------------------------
Elias Vamvakas, as Attorney-in-Fact
acting on behalf of the Selling
Stockholders
By:
--------------------------------
William G. Dumencu, CA, as
Attorney-in-Fact acting on behalf of
the Selling Stockholders
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Citigroup Global Markets Inc.
SG Cowen & Co., LLC
ThinkEquity Partners LLC
By: Citigroup Global Markets Inc.
By:
-----------------------------------------
Name:
Title:
For themselves and the other several
Underwriters named in Schedule I to
the foregoing Agreement.
SCHEDULE I
<Table>
<Caption>
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
- ------------------------------------------- --------------------------
Citigroup Global Markets Inc.......................
SG Cowen & Co., LLC................................
ThinkEquity Partners LLC...........................
Orion Securities (USA) Inc.........................
DeMatteo Monness LLC...............................
Citigroup Global Markets Canada Inc................
Clarus Securities Inc..............................
Orion Securities Inc...............................
Octagon Capital Corporation........................
------------
TOTAL........................
============
</Table>
SCHEDULE II
Unless otherwise noted, each person's address is:
c/o OccuLogix, Inc., 2600 Skymark Drive, Unit 9, Suite 201
Mississauga, Ontario L4N 5B2
<Table>
<Caption>
NUMBER OF UNDERWRITTEN MAXIMUM NUMBER OF OPTION
MAJOR SELLING STOCKHOLDERS SECURITIES TO BE SOLD SECURITIES TO BE SOLD
- ---------------------------------- --------------------------- --------------------------
TLC Vision Corporation
5280 Solar Drive, Suite 100,
Mississauga, Ontario
L4W 5M8.................. 2,329,031 3,382,927
Richard Davis, MD.................. 157,365 228,574
John Cornish.................. 32,637 47,405
NUMBER OF UNDERWRITTEN MAXIMUM NUMBER OF OPTION
OTHER SELLING STOCKHOLDERS SECURITIES TO BE SOLD SECURITIES TO BE SOLD
- ---------------------------------- --------------------------- --------------------------
Bermuda Bay, Ltd. (Alberto de
Alejo) ..................
Daniel Bertoch, D.D.S...................
Tom Brandt..................
Sandra Bruck..................
Margaret Cornish..................
Ramia Cornish..................
Margaret Cornish QDOT
Trust..................
Dana Deupree..................
Larry Dewberry..................
David Dieters..................
Burt Dubow..................
Alexander Eaton, M.D...................
Richard Fielder..................
Richard & Brigitte
Fielder..................
Patrick Flaherty, M.D...................
David Geller, M.D...................
James Gills, M.D...................
James P. Gills Flint
Trust..................
Ray Gonzalez..................
Alan & Debra Green..................
Richard Hairston..................
Thomas Hooker..................
Susan B. Howard..................
David Israel..................
Charles Jenkins..................
Carol Jones..................
Charles L. Jones..................
W. Andrew Krusen..................
Merit Partners (Jeffrey
Schoenbaum)..................
Angela Metelski..................
Julie & Matt Mores..................
Julie Mores..................
Matt Mores..................
Robin Morrison..................
-2-
Donna M. Muller............
Michael Murray..................
Sandara Murray..................
Northlea Partners (Dr. John
Abeles)..................
Rula Peindado..................
Nancie Reichle..................
Kris Richards, Jr., M.D...................
A.H. Rodriguez..................
Christopher Rodriguez..................
Donna Rodriguez..................
Jennifer Rodriguez..................
Rodriguez Family Trust,
A.H...................
Donna Rodriguez Family
Trust..................
Safe Harbor Fund, L.P. (Dean G.
Tanella)..................
Safe Harbor Managed Account
101-A, Ltd. (Gary Saling)..................
Paul Scharfer..................
Jeffrey Schwartz..................
Jane Cornish Smith..................
Mark Stern..................
Mark Stern & Ellen
Kaplan..................
Don Strickland..................
S.M. Weinstock..................
-3-
Leslie Wells..................
Barbara White..................
Elizabeth White..................
------------ ------------
TOTAL
============ ============
-4-
ANNEX A
SIGNIFICANT SUBSIDIARIES
OccuLogix Holdings, Inc. Delaware
OccuLogix, L.P. Delaware
OccuLogix LLC Delaware
OccuLogix Management, Inc. Delaware
OccuLogix ExchangeCo ULC Nova Scotia
[FORM OF LOCK-UP AGREEMENT] EXHIBIT A
[Letterhead of officer, director or major stockholder
of OccuLogix, Inc.]
OccuLogix, Inc.
Public Offering of Common Stock
, 2004
--------------- ------
Citigroup Global Markets Inc.
SG Cowen & Co., LLC
ThinkEquity Partners LLC
As Representatives of the several Underwriters,
c/o Citigroup Global Markets Inc.
388 Greenwich Street
New York, New York 10013
Ladies and Gentlemen:
This letter is being delivered to you in connection with the proposed
Underwriting Agreement (the "Underwriting Agreement"), between OccuLogix, Inc.,
a Delaware corporation (the "Company"), and each of you as representatives of a
group of Underwriters named therein, relating to an underwritten public offering
(the "Offering") of Common Stock, $0.001 par value (the "Common Stock"), of the
Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned will not, without the prior written
consent of Citigroup Global Markets Inc., offer, sell, contract to sell, pledge
or otherwise dispose of, (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by actual
disposition or effective economic disposition due to cash settlement or
otherwise) by the undersigned or any affiliate of the undersigned or any person
in privity with the undersigned or any affiliate of the undersigned), directly
or indirectly, including the filing (or participation in the filing) of a
registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction:
(i) in the event that the undersigned is not a selling stockholder
that will be executing the Underwriting Agreement, for the
period from the date hereof until 180 days after the date of the
Underwriting Agreement, other than shares of Common Stock
disposed of as bona fide gifts approved by Citigroup Global
Markets Inc.; and
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(ii) in the event that the undersigned is a selling stockholder that
will be executing the Underwriting Agreement, for the period
from the date hereof until the Underwriting Agreement is
executed by such selling stockholder.
This agreement shall automatically terminate and be of no further force
or effect upon the earlier of (i) an Underwriting Agreement not being executed
within 270 days of the date hereof; and (ii) either the Company or the
representatives of the group of Underwriters notifying the other in writing that
they are abandoning the Offering. If for any reason the Underwriting Agreement
shall be terminated prior to the Closing Date (as defined in the Underwriting
Agreement), the agreement set forth above shall likewise be terminated.
Yours very truly,
[SIGNATURE OF OFFICER, DIRECTOR OR MAJOR
STOCKHOLDER]
[Name and address of officer, director or major stockholder]
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