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REGENERON PHARMACEUTICALS, INC.
(a New York corporation)
2,600,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: March 29, 2000
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REGENERON PHARMACEUTICALS, INC.
(a New York corporation)
2,600,000 Shares of Common Stock
(Par Value $0.001 Per Share)
PURCHASE AGREEMENT
March 29, 2000
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
LEHMAN BROTHERS INC.
J.P. MORGAN SECURITIES INC.
FLEETBOSTON ROBERTSON STEPHENS INC.
as Representative of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Regeneron Pharmaceuticals, Inc., a New York corporation (the
"Company"), and Amgen Inc., a Delaware corporation (the "Selling Shareholder"),
confirm their respective agreements with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of the other
Underwriters named in Schedule A hereto (collectively, the "Underwriters", which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom Merrill Lynch is acting as representative (in such
capacity, the "Representative"), with respect to (i) the issue and sale by the
Company and the purchase by the Underwriters, acting severally and not jointly,
of the respective numbers of shares of Common Stock, par value $0.001 per share,
of the Company ("Common Stock") set forth in said Schedule A, and (ii) the grant
by the Selling Shareholder to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any
part of 390,000 additional shares of Common Stock to cover over-allotments, if
any. The aforesaid 2,600,000 shares of Common Stock (the "Initial Securities")
to be purchased by the Underwriters and all or any part of the 390,000 shares of
Common Stock subject to the option described in Section 2(b) hereof (the "Option
Securities") are hereinafter called, collectively, the "Securities". The
Company acknowledges and agrees that the
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Option Securities are "Registrable Shares" as defined in the Class D Convertible
Preferred Stock Purchase Agreement dated as of August 31, 1990 (the "Stock
Purchase Agreement") between the Company and the Selling Shareholder, that the
Option Securities are being registered pursuant to Section 8.4 of the Stock
Purchase Agreement and that such Selling Shareholder is entitled to the benefits
of the Stock Purchase Agreement with respect to such Option Securities and the
registration of the Option Securities.
The Company and the Selling Shareholder understand that the
Underwriters propose to make a public offering of the Securities as soon as the
Representative deems advisable after this Agreement has been executed and
delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-31764) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. The information included in such prospectus, that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information". Each prospectus used before such registration statement became
effective, and any prospectus that omitted, as applicable, the Rule 430A
Information, that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a "preliminary prospectus."
Such registration statement, including the exhibits thereto, schedules thereto,
if any, and the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the 1933 Act, at the time it became effective and including
the Rule 430A Information, as applicable, is herein called the "Registration
Statement". Any registration statement filed pursuant to Rule 462(b) of the 1933
Act Regulations is herein referred to as the "Rule 462(b) Registration
Statement", and after such filing the term "Registration Statement" shall
include the Rule 462(b) Registration Statement. The final prospectus, including
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the form first furnished to the Underwriters for use in
connection with the offering of the Securities is herein called the
"Prospectus". For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus, the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained", "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any
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document under the Securities Exchange Act of 1934 (the "1934 Act") which is
incorporated by reference in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter and the Selling Shareholder as of
the date hereof, as of the Closing Time referred to in Section 2(c) hereof, and
as of each Date of Delivery (if any) referred to in Section 2(b) hereof, and
agrees with each Underwriter and the Selling Shareholder, as follows:
(i) Compliance with Registration Requirements. The Company
meets the requirements for use of Form S-3 under the 1933 Act. Each of
the Registration Statement and any Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional information
has been complied with.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. Neither the
Prospectus nor any amendments or supplements thereto at the time the
Prospectus or any such amendment or supplement was issued and at the
Closing Time (and, if any Option Securities are purchased, at the Date
of Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through Merrill
Lynch expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the 1933 Act,
complied when so filed in all material respects with the 1933
Act Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically
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transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they were or hereafter are filed with
the Commission (for so long as a prospectus is required to be delivered
in connection with the sale of the Securities), complied and will
comply in all material respects with the requirements of the 1934 Act
and the rules and regulations of the Commission thereunder (the "1934
Act Regulations"), and, when read together with the other information
in the Prospectus, at the time the Registration Statement became
effective, at the time the Prospectus was issued and at the Closing
Time (and if any Option Securities are purchased, at the Date of
Delivery), did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(iii) Independent Accountants. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included
in the Registration Statement and the Prospectus, together with the
related schedules and notes, present fairly the respective financial
positions of the Company and Amgen--Regeneron Partners (as defined
below) at the dates indicated and the statement of operations,
stockholders' equity (or statement of changes in partners' capital, in
the case of Amgen--Regeneron Partners) and cash flows of the Company
and Amgen--Regeneron Partners for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules, if any, included in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data
and the summary financial information included in the Prospectus
present fairly the information shown therein and have been compiled on
a basis consistent with that of the audited financial statements
included in the Registration Statement.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change or a development known to the
Company involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings or business
affairs of the Company, whether or not arising in the ordinary course
of business (a "Material Adverse Effect"), (B) there have been no
transactions entered into by the Company or Amgen--Regeneron Partners,
other than those in the ordinary course of business, which are material
with respect to the Company and Amgen--Regeneron Partners considered as
one enterprise, and (C) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its
capital stock.
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(vi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing
under the laws of the State of New York and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement. The Company is not required by
any state laws to qualify as a foreign corporation to transact business
whether by reason of the ownership or leasing of property or the
conduct of business.
(vii) Good Standing of Subsidiaries. The Company has no
corporate subsidiaries. Amgen--Regeneron Partners, a Delaware general
partnership ("Amgen--Regeneron Partners") formed by the Company and
Amgen Inc., has been duly formed, is validly existing as a general
partnership under the laws of the jurisdiction of its formation, has
the legal power and authority to own its property and to conduct its
business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a Material
Adverse Effect on the Company.
(viii) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or
options referred to in the Prospectus). The shares of issued and
outstanding capital stock of the Company, including the Option
Securities to be purchased by the Underwriters from the Selling
Shareholder, have been duly authorized and validly issued and are fully
paid and non-assessable; none of the outstanding shares of capital
stock of the Company, including the Option Securities to be purchased
by the Underwriters from the Selling Shareholder, was issued in
violation of the preemptive or other similar rights of any
securityholder of the Company.
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Initial
Securities to be purchased by the Underwriters from the Company have
been duly authorized for issuance and sale to the Underwriters pursuant
to this Agreement and, when issued and delivered by the Company
pursuant to this Agreement against payment of the consideration set
forth herein, will be validly issued, fully paid and non-assessable;
the Common Stock conforms to all statements relating thereto contained
in the Prospectus and such description conforms to the rights set forth
in the instruments defining the same; and no holder of the Initial
Securities will be subject to personal liability by reason of being
such a holder; and the issuance of the Initial Securities is not
subject to the preemptive or other similar rights of any securityholder
of the Company.
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(xi) Absence of Defaults and Conflicts. Neither the Company
nor Amgen--Regeneron Partners is in violation of its charter or by-laws
or the partnership agreement, as the case may be, or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or Amgen--Regeneron Partners is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or Amgen--Regeneron Partners is
subject (collectively, "Agreements and Instruments") except for such
defaults that would not result in a Material Adverse Effect; and the
execution, delivery and performance of this Agreement by the Company
and the consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the Initial
Securities and the use of the proceeds from the sale of the Initial
Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder
have been duly authorized by all necessary corporate action and do not
and will not, whether with or without the giving of notice or passage
of time or both, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or
assets of the Company or Amgen--Regeneron Partners pursuant to, the
Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation
of the provisions of the charter or by-laws of the Company or the
partnership agreement of Amgen--Regeneron Partners, or any applicable
law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or Amgen--Regeneron Partners or
any of their assets, properties or operations except that could not be
expected to result in a Material Adverse Effect. As used herein, a
"Repayment Event" means any event or condition which gives the holder
of any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or Amgen--Regeneron Partners.
(xii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or Amgen--Regeneron Partners exists or, to the
knowledge of the Company, is imminent, and the Company is not aware of
any existing or imminent labor disturbance by the employees of any of
its or Amgen--Regeneron Partners' principal suppliers, manufacturers,
customers or contractors, which, in either case, may reasonably be
expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company or Amgen--Regeneron Partners, which is required to be disclosed
in the Registration Statement (other than as disclosed therein), or
which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to
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materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder; the aggregate
of all pending legal or governmental proceedings to which the Company
or Amgen--Regeneron Partners is a party or of which any of their
respective property or assets is the subject which are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business, could not reasonably be expected to result
in a Material Adverse Effect.
(xiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) Possession of Intellectual Property. The Company and
Amgen--Regeneron Partners owns or possesses, or will use their best
efforts to acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures), trademarks, service
marks, trade names or other intellectual property (collectively,
"Intellectual Property") necessary to carry on the business now
operated by them. Except as disclosed in the Prospectus, there is no
litigation or other proceeding pending or, to the best of the Company's
knowledge, threatened and no claims are presently being asserted by any
third party challenging or questioning the ownership, validity,
enforceability of the Company's or Amgen--Regeneron Partners' right to
use or own any Intellectual Property or asserting that the use of any
Intellectual Property by the Company or Amgen--Regeneron Partners or
the operation of the business of the Company or Amgen--Regeneron
Partners infringes upon or misappropriates the Intellectual Property of
any third party, other than infringements which would not be reasonably
likely to have a Material Adverse Effect on the Company and neither the
Company nor Amgen--Regeneron Partners is otherwise aware of any
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or circumstances which
would render any Intellectual Property invalid or inadequate to protect
the interest of the Company or Amgen--Regeneron Partners therein, and
which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in
the aggregate, would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental
authority or agency is necessary or required for the performance by the
Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement.
(xvii) Possession of Licenses and Permits. The Company and
Amgen--Regeneron Partners possesses such permits, licenses, approvals,
consents and other authorizations (collectively, "Governmental
Licenses") issued by the appropriate federal, state, local or
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foreign regulatory agencies or bodies necessary to conduct the business
now operated by them; the Company and Amgen--Regeneron Partners are in
compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in
the aggregate, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor Amgen--Regeneron
Partners has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a Material Adverse Effect.
(xviii) Title to Property. The Company and Amgen--Regeneron
Partners have good and marketable title to all real property owned by
the Company and Amgen--Regeneron Partners and good title to all other
properties owned by them, in each case, free and clear of all
mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind except such as (a) are described in the
Prospectus or (b) do not, singly or in the aggregate, materially affect
the value of such property and do not interfere with the use made and
proposed to be made of such property by the Company or Amgen--Regeneron
Partners; and all of the leases and subleases material to the business
of the Company and Amgen--Regeneron Partners, considered as one
enterprise, and under which the Company or Amgen--Regeneron Partners
holds properties described in the Prospectus, are in full force and
effect, and neither the Company nor Amgen--Regeneron Partners has any
notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or Amgen--Regeneron
Partners under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or Amgen--Regeneron
Partners to the continued possession of the leased or subleased
premises under any such lease or sublease.
(xix) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor Amgen--Regeneron Partners is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and Amgen--Regeneron Partners
have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or
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threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or Amgen--Regeneron Partners and (D) there are
no events or circumstances that might reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency,
against or affecting the Company or Amgen--Regeneron Partners relating
to Hazardous Materials or any Environmental Laws.
(xx) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus will not be, an "investment company" or an entity controlled
by an "investment company" as such terms are defined in The Investment
Company Act of 1940, as amended (the "1940 Act").
(xxi) FDA and PTO Proceedings. To the best of the Company's
knowledge, except as disclosed in the Prospectus, there are no
rulemaking or similar proceedings before the U.S. Food and Drug
Administration or the U.S. Patent and Trademark Office which affect or
involve the Company or Amgen--Regeneron Partners or any of the
processes or products which the Prospectus discloses the Company or
Amgen--Regeneron Partners has developed, is developing or proposes to
develop or uses or proposes to use which, if the subject of an action
unfavorable to the Company or Amgen--Regeneron Partners, could have a
Material Adverse Effect on the Company.
(xxii) Compliance with Cuba Act. The Company has complied
with, and is and will be in compliance with, the provisions of that
certain Florida act relating to disclosure of doing business with Cuba,
codified as Section 517.075 of the Florida statutes, and the rules and
regulations thereunder, or is exempt therefrom.
(b) Representations and Warranties by the Selling Shareholder. The
Selling Shareholder represents and warrants to each Underwriter as of the date
hereof, as of the Closing time, and, if the Selling Shareholder is selling
Option Securities on a Date of Delivery, as of each such Date of Delivery, and
agrees with each Underwriter, as follows:
(i) Accurate Disclosure. The information set forth in
Exhibit E is true and accurate.
(ii) Authorization of Agreements. The Selling Shareholder has
the full right, power and authority to enter into this Agreement and to
sell, transfer and deliver the Option Securities to be sold by the
Selling Shareholder hereunder. The execution and delivery of this
Agreement and the sale and delivery of the Option Securities to be sold
by the Selling Shareholder and the consummation of the transactions
contemplated herein and compliance by the Selling Shareholder with its
obligations hereunder have been duly authorized by the Selling
Shareholder and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any tax, lien, charge or encumbrance upon the Option Securities
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to be sold by the Selling Shareholder or any property or assets of the
Selling Shareholder pursuant to any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, license, lease or other
agreement or instrument to which the Selling Shareholder is a party and
which has been filed as an exhibit to the Selling Shareholder's Form
10-K for the fiscal year ended December 31, 1999, nor will such action
result in any violation of the provisions of the charter or by-laws of
the Selling Shareholder, or any applicable treaty, law, statute, rule,
regulation, judgment, order, writ or decree of any government,
government instrumentality or court, domestic or foreign, having
jurisdiction over the Selling Shareholder or any of its properties
except to the extent that such action does not result in a material
adverse change in the financial condition of the Selling Shareholder.
(iii) Direct Holder of Securities; Title to Option Securities.
The Option Securities to be sold by the Selling Shareholder pursuant to
this Agreement are certificated securities in registered form with a
1933 Act restrictive legend and are not held in any securities account
or by or through any securities intermediary within the meaning of the
Uniform Commercial Code as in effect in the State of New York
("NYUCC"). The Selling Shareholder, on the Date of Delivery, will have
full right, power and authority to hold, sell, transfer and deliver the
Option Securities to be sold by the Selling Shareholder pursuant to
this Agreement; and upon the Underwriters' acquiring possession of such
Option Securities (or an agent's acquiring possession of such Option
Securities on the Underwriters' behalf) in the State of New York and
paying the purchase price therefor as herein contemplated, the
Underwriters will acquire their respective interests in such Option
Securities (including, without limitation, all rights that the Selling
Shareholder had or has the power to transfer in such Option Securities)
free of any "adverse claim" (as defined in Section 8-102(a) of the
NYUCC), assuming that the Underwriters do not have notice of any
adverse claim to the Option Securities.
(iv) Absence of Manipulation. The Selling Shareholder has not
taken, and will not take, directly or indirectly, any action which is
designed to or which has constituted or which might reasonably be
expected to cause or result in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale
of the Option Securities.
(v) Absence of Further Requirements. No filing with
(other than filings made pursuant to the 1934 Act), or consent,
approval, authorization, order, registration, qualification or decree
of, any court or governmental authority or agency of the United States
or the States of California or New York, is necessary or required for
the performance by the Selling Shareholder of its obligations
hereunder, or in connection with the sale and delivery of the Option
Securities hereunder or the consummation of the transactions
contemplated by this Agreement, except such as may have previously been
made or obtained or as may be required under the 1933 Act or the 1933
Act Regulations or state securities laws.
(vi) Restriction on Sale of Securities. During a period of 90
days from the effective date of the Registration Statement, the Selling
Shareholder agrees with the Underwriters that it will not, without the
prior written consent of Merrill Lynch, (i) offer,
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pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or
file any registration statement under the 1933 Act with respect to any
of the foregoing or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not
apply to the Option Securities to be sold hereunder.
(vii) Certificates Suitable for Transfer. Certificates for all
of the Option Securities to be sold by the Selling Shareholder pursuant
to this Agreement, in suitable form for transfer by delivery or
accompanied by duly executed instruments of transfer or assignment in
blank, will, prior to the Date of Delivery, have been placed in custody
with counsel for the Selling Shareholder with instructions to deliver
such Securities to the Underwriters pursuant to this Agreement.
(viii) No Association with NASD. Neither the Selling
Shareholder nor any of its affiliates directly, or indirectly through
one or more intermediaries, controls, or is controlled by, or is under
common control with, or has any other association with (within the
meaning of Article I, Section 1(m) of the By-laws of the National
Association of Securities Dealers, Inc.), any member firm of the
National Association of Securities Dealers, Inc.
(c) Officer's Certificates. Any certificate signed by any
officer of the Company delivered to the Representative, the Selling Shareholder
or to counsel for the Underwriters shall be deemed a representation and warranty
by the Company to each Underwriter and the Selling Shareholder as to the matters
covered thereby; and any certificate signed by or on behalf of the Selling
Shareholder as such and delivered to the Representative pursuant to the terms of
this Agreement shall be deemed a representation and warranty by the Selling
Shareholder to the Underwriters as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per share set forth in Schedule C, the number of
Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Selling Shareholder
12
hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to 390,000 additional shares of Common Stock as set forth in
Schedule B, at the price per share set forth in Schedule C, less an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Initial Securities but not payable on the Option Securities. The
option hereby granted will expire 30 days after the date hereof and may be
exercised in whole or in part from time to time only for the purpose of covering
over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representative to the
Selling Shareholder setting forth the number of Option Securities as to which
the several Underwriters are then exercising the option and the time and date of
payment and delivery for such Option Securities. Any such time and date of
delivery (a "Date of Delivery") shall be determined by the Representative, but
shall not be earlier than three full business days prior to or later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined, provided, however, if the option
hereby granted is exercised at least one business day prior to the Closing Time,
the Date of Delivery shall be the Closing Time. If the option is exercised as to
all or any portion of the Option Securities, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Option Securities then being purchased which the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as the
Representative in its discretion shall make to eliminate any sales or purchases
of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of
Shearman and Sterling, 599 Lexington Avenue, New York, NY 10022, or at such
other place as shall be agreed upon by the Representative and the Company, at
9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representative and the Company (such time and date of payment and delivery being
herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representative
and the Company and the Selling Shareholder, on each Date of Delivery as
specified in the notice from the Representative to the Company and the Selling
Shareholder.
Payment shall be made to the Company and the Selling Shareholder by
wire transfer of immediately available funds to bank accounts designated by the
Company and the Selling Shareholder as the case may be, against delivery to the
Representative for the respective accounts of the Underwriters of certificates
for the Securities to be purchased by them. It is understood that each
Underwriter has authorized the Representative, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or
13
the Option Securities, if any, to be purchased by any Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as
the case may be, but such payment shall not relieve such Underwriter from its
obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representative may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representative in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants
with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A, and will (for so long as a prospectus is
required to be delivered in connection with the sale of the Securities)
notify the Representative immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the Registration
Statement shall become effective, or any supplement to the Prospectus
or any amended Prospectus shall have been filed, (ii) of the receipt of
any comments from the Commission regarding the Registration Statement
or the Prospectus, (iii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus, or of the
suspension of the qualification of the Securities for offering or sale
in any jurisdiction, or of the initiation or threatening of any
proceedings for any of such purposes. The Company will promptly effect
the filings necessary pursuant to Rule 424(b) and will take such steps
as it deems necessary to ascertain promptly whether the form of
prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectus. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order
is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) Filing of Amendments. For so long as a prospectus is
required to be delivered in connection with the sale of the Securities,
the Company will give the Representative notice of its intention to
file or prepare any amendment to the Registration Statement (including
any filing under Rule 462(b)), or any amendment, supplement or revision
to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will furnish the Representative
with copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representative or counsel for the
Underwriters shall reasonably object.
14
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representative and counsel for the
Underwriters, without charge, one copy of the manually signed and as
many conformed copies as the Underwriters may reasonably request, of
the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be
incorporated by reference therein) and signed copies of all consents
and certificates of experts, and will also deliver to the
Representative, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without
exhibits) for each of the Underwriters. The copies of the Registration
Statement and each amendment thereto furnished to the Underwriters will
be identical in text to the electronically transmitted copies thereof
filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to
each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act, such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The
Company will comply with the 1933 Act and the 1933 Act Regulations and
the 1934 Act and the 1934 Act Regulations so as to permit the
completion of the distribution of the Securities as contemplated in
this Agreement and in the Prospectus. If at any time when a prospectus
is required by the 1933 Act to be delivered in connection with sales of
the Securities, any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the
Underwriters or for the Company, to amend the Registration Statement or
amend or supplement the Prospectus in order that the Prospectus will
not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the opinion
of such counsel, at any such time to amend the Registration Statement
or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company
will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such
statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish
to the Underwriters such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
15
(f) Blue Sky Qualifications. The Company will cooperate with
the Underwriters, to qualify the Securities for offering and sale under
the applicable securities laws of such states and other jurisdictions
as the Representative may designate and to maintain such qualifications
in effect for a period of not less than one year from the later of the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided, however, that the Company shall not
be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it
is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such
statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period as
required by the relevant jurisdiction of the Registration Statement and
any Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net
proceeds received by it from the sale of the Securities in the manner
specified in the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to effect
and maintain the quotation of the Securities on the Nasdaq National
Market and will file with the Nasdaq National Market all documents and
notices required by the Nasdaq National Market of companies that have
securities that are traded in the over-the-counter market and
quotations for which are reported by the Nasdaq National Market.
(j) Restriction on Sale of Securities. During a period of 90
days from the date of the Prospectus, the Company will not, without the
prior written consent of Merrill Lynch, (i) directly or indirectly,
offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase or otherwise transfer or dispose of any
share of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock or file any registration statement
under the 1933 Act with respect to any of the foregoing or (ii) enter
into any swap or any other agreement or any transaction that transfers,
in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction
described in clause (i) or (ii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise. The
foregoing sentence shall not apply to (A) the Securities to be sold
hereunder, (B) any shares of Common Stock issued by the Company upon
the exercise of an option or warrant or the conversion of a security
outstanding on the date hereof and referred to in the Prospectus, (C)
any shares of Common Stock issued or options to purchase Common Stock
granted pursuant to existing and future employee benefit plans of the
Company or (D) any shares of Common Stock issued pursuant to any
non-employee director stock plan or dividend reinvestment plan.
16
(k) Reporting Requirements. The Company, during the period
when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by
the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay or
cause to be paid all expenses incident to the performance of its obligations
under this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel, the
Selling Shareholder's counsel, accountants and other advisors, (v) the filing
fees incident to any necessary filings under state securities laws and the
reasonable fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriters of copies
of each preliminary prospectus, and of the Prospectus and any amendments or
supplements thereto, (vii) the fees and expenses of the transfer agent or
registrar for the Securities, (viii) the filing fees incident to, and the
reasonable fees and disbursements of counsel to the Underwriters in connection
with, the review by the National Association of Securities Dealers, Inc. (the
"NASD") of the terms of the sale of the Securities and (ix) the fees and
expenses incurred in connection with the inclusion of the Securities in the
Nasdaq National Market.
(b) Expenses of the Selling Shareholder. The Selling Shareholder
will pay all discounts, and commissions of the Underwriters relating to the
distribution of the Option Securities.
(c) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters incurred in connection with the Initial Securities
and Option Securities respectively as advised by the Underwriters.
(d) Allocation of Expenses. The provisions of this Section shall not
affect the agreement between the Company and the Selling Shareholder for the
sharing of such costs and expenses as provided in the Stock Purchase Agreement.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company and the Selling Shareholder
contained in Section 1 hereof or in certificates of any officer of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
and
17
the Selling Shareholder of their respective covenants and other obligations
hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing
such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the
Representative shall have received the favorable opinion, dated as of
Closing Time, of Skadden, Arps, Slate, Meagher & Flom LLP, counsel for
the Company, together with the favorable opinion of Joseph M.
Sorrentino, in-house intellectual property counsel for the Company,
each in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters to the effect set forth in Exhibit A
and Exhibit B, respectively, hereto and to such further effect as
counsel to the Underwriters may reasonably request.
(c) Opinion of Counsel for Underwriters. At Closing
Time, the Representative shall have received the favorable opinion,
dated as of Closing Time, of Shearman & Sterling, counsel for the
Underwriters. In giving such opinion such counsel may rely, as to all
matters governed by the laws of jurisdictions other than the law of the
State of New York and the federal law of the United States, upon the
opinions of counsel satisfactory to the Representative. Such counsel
may also state that, insofar as such opinion involves factual matters,
they have relied, to the extent they deem proper, upon certificates of
officers of the Company and certificates of public officials.
(d) Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of
which information is given in the Prospectus, any material adverse
change or a development known to the Company involving a prospective
material adverse change in the condition, financial or otherwise, or in
the earnings or business affairs of the Company, whether or not arising
in the ordinary course of business, and the Representative shall have
received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same
force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the
18
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(e) Accountants' Comfort Letter. At the time of the execution
of this Agreement, the Representative shall have received from each of
PricewaterhouseCoopers LLP and Ernst & Young, a letter dated such date,
in form and substance satisfactory to the Representative, together with
signed or reproduced copies of such letter for each of the other
Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the
Representative shall have received from each of PricewaterhouseCoopers
and Ernst & Young a letter, dated as of Closing Time, to the effect
that they reaffirm the statements made in the letter furnished pursuant
to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to
Closing Time.
(g) Approval of Listing. At Closing Time, the Securities shall
have been approved for inclusion in the Nasdaq National Market, subject
only to official notice of issuance.
(h) No Objection. The NASD has confirmed that it has
not raised any objection with respect to the fairness and
reasonableness of the underwriting terms and arrangements.
(i) Lock-up Agreements. At the date of this Agreement,
the Representative shall have received an agreement substantially in
the form of Exhibit D hereto signed by the persons listed on Schedule D
hereto.
(j) Conditions to Purchase of Option Securities. In the event
that the Underwriters exercise their option provided in Section 2(b)
hereof to purchase all or any portion of the Option Securities, the
representations and warranties of the Company and the Selling
Shareholder contained herein and the statements in any certificates
furnished by the Company and the Selling Shareholder hereunder shall be
true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, the Representative shall have received:
(i) Officers' Certificate. A certificate, dated such
Date of Delivery, of the President or a Vice President of the
Company and of the chief financial or chief accounting officer
of the Company confirming that the certificate delivered at
Closing Time pursuant to Section 5(d) hereof remains true and
correct as of such Date of Delivery. The Officers' Certificate
shall also be received by the Selling Shareholder.
(ii) Certificate of Selling Shareholder. On the Date
of Delivery, the Representative shall have received a
certificate of the Selling Shareholder, dated as of
19
the Date of Delivery, to the effect that (A) the
representations and warranties of the Selling Shareholder
contained in Section 1(b) hereof are true and correct in all
respects with the same force and effect as though expressly
made at and as of the Date of Delivery and (B) the Selling
Shareholder has complied in all material respects with all
agreements and all conditions on its part to be performed
under this Agreement at or prior to the Date of Delivery.
(iii) Opinion of Counsel for Company. The favorable
opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel
for the Company, together with the favorable opinion of Joseph
M. Sorrentino, in-house intellectual property counsel for the
Company, each in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to
the Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by
Section 5(b) hereof.
(iv) Opinion of Counsel for the Selling Shareholder.
On the Date of Delivery, the Representative shall have
received the favorable opinions, dated as of the Date of
Delivery, of Latham & Watkins, counsel for the Selling
Shareholder and the General Counsel of the Selling
Shareholder, together with signed or reproduced copies of such
opinion for each of the other Underwriters, to the effect set
forth in Exhibits C-1 and C-2 hereto.
(v) Opinion of Counsel for Underwriters. The
favorable opinion of Shearman & Sterling, counsel for the
Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(vi) Bring-down Comfort Letter. A letter from each of
PricewaterhouseCoopers LLP and Ernst & Young, in form and
substance satisfactory to the Representative(s) and dated such
Date of Delivery, substantially in the same form and substance
as the letter furnished to the Representative pursuant to
Section 5(f) hereof, except that the "specified date" in the
letter furnished pursuant to this paragraph shall be a date
not more than five days prior to such Date of Delivery.
(k) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with
such documents and opinions as they reasonably may require for the
purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated, or in order to evidence the accuracy
of any of the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken by the
Company and the Selling Shareholder in connection with the issuance and
sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Representative(s) and counsel
for the Underwriters.
20
(l) Termination of Agreement. If any condition specified in
this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the
purchase of Option Securities, on a Date of Delivery which is after the
Closing Time, the obligations of the several Underwriters to purchase
the relevant Option Securities, may be terminated by the Representative
by notice to the Company at any time at or prior to Closing Time or
such Date of Delivery, as the case may be, and such termination shall
be without liability of any party to any other party except as provided
in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of Underwriters. (1) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the
21
Company by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto); and provided, further, that the Company will not be
liable to any Underwriter with respect to any Prospectus to the extent that any
such loss, liability, claim, damage or expense resulted from the fact that such
Underwriter, in contravention of a requirement of this Agreement or applicable
law, sold Securities to a person to whom such Underwriter failed to send or
give, at or prior to the Closing Time, a copy of the final Prospectus, as then
amended or supplemented if the Company has previously furnished copies thereof
to the Underwriter and the loss, liability, claim, damage or expense of such
Underwriter resulted from an untrue statement or omission of a material fact
contained or omitted from the preliminary Prospectus which was corrected in the
final Prospectus, if applicable, as amended or supplemented prior to the Closing
Time, and such final Prospectus was required by law to be delivered at or prior
to the written confirmation of sale to such person.
(2) The Selling Shareholder agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, to the same
extent as the foregoing indemnity from the Company to each Underwriter;
provided, however, that such indemnification shall be only with respect to
information regarding the Selling Shareholder furnished in writing to the
Company by or on behalf of the Selling Shareholder expressly for use in the
Registration Statement (or any amendment thereto), including Rule 430A
Information, if applicable, or any preliminary prospectus or Prospectus (or any
amendment or supplement thereto); and provided further, that the aggregate
liability of the Selling Shareholder pursuant to this paragraph shall be limited
to the total net proceeds received by the Selling Shareholder from the
Securities purchased by the Underwriters from the Selling Shareholder pursuant
to this Agreement. The Underwriters agree that the information furnished to the
Company specifically for use in the Registration Statement (or any amendment
thereto), including Rule 430A Information, if applicable, or any preliminary
prospectus or Prospectus (or any amendment or supplement thereto) includes only
the information relating to the Selling Shareholder set forth in Exhibit E
hereto; and provided further that the Selling Shareholder will not be liable to
any Underwriter with respect to any Prospectus to the extent that any such loss,
liability, claim, damage or expense resulted from the fact that such
Underwriter, in contravention of a requirement of this Agreement or applicable
law, sold Securities to a person to whom such Underwriter failed to send or
give, at or prior to the Date of Delivery, a copy of the final Prospectus, as
then amended or supplemented if the Company has previously furnished copies
thereof to the Underwriter and the loss, liability, claim, damage or expense of
such Underwriter resulted from an untrue statement or omission of a material
fact contained in or omitted from the preliminary Prospectus which was corrected
in the final Prospectus, if applicable, as amended or supplemented prior to the
Date of Delivery, and such final Prospectus was required by law to be delivered
at or prior to the written confirmation of sale to such person.
(b) Indemnification of Company, Directors and Officers and Selling
Shareholder. Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act and the Selling
22
Shareholder and each person, if any, who controls the Selling Shareholder within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
including the Rule 430A Information or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through Merrill Lynch expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or any
amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a) above,
counsel to the indemnified parties shall be selected by Merrill Lynch, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company or Selling Shareholder, as
the case may be. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as to or an admission of fault, culpability or
a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(1)(ii) effected without its written consent if (i) such settlement
is entered into more than 45 days after receipt by such indemnifying party of
the aforesaid request, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have
23
reimbursed such indemnified party in accordance with such request prior to the
date of such settlement.
(e) Other Agreements with Respect to Indemnification. The provisions of
this Section shall not affect the agreement between the Company and the Selling
Shareholder with respect to indemnification as provided in the Registration
Rights Agreement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and (if the
option described in Section 2(b) hereof is exercised) the Selling Shareholder,
on the one hand, and the Underwriters on the other hand, from the offering of
the Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and (if the option described in
Section 2(b) hereof is exercised) the Selling Shareholder, on the one hand, and
of the Underwriters on the other hand, in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and (if the option
described in Section 2(b) hereof is exercised) the Selling Shareholder, on the
one hand, and the Underwriters on the other hand, in connection with the
offering of the Securities pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Securities pursuant to this Agreement received by the Company and (if the
option described in Section 2(b) hereof is exercised) the Selling Shareholder
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus bear to the aggregate initial public
offering price of the Securities as set forth on such cover.
The relative fault of the Company and (if the option described in
Section 2(b) hereof is exercised) the Selling Shareholder, on the one hand, and
the Underwriters on the other hand, shall be determined by reference to, among
other things, whether any such untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company and (if the option described in Section 2(b)
hereof is exercised) the Selling Shareholder or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Selling Shareholder and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above in this Section.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified
24
party and referred to above in this Section shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section, the Selling Shareholder
shall not be required to contribute any amount in excess of the total net
proceeds received by the Selling Shareholder from the Option Securities
purchased by the Underwriters from the Selling Shareholder pursuant to this
Agreement.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the
Selling Shareholder within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company or
the Selling Shareholder, as the case may be. The Underwriters' respective
obligations to contribute pursuant to this Section are several in proportion to
the number of Securities set forth opposite their respective names in Schedule A
hereto and not joint.
The provisions of this Section shall not affect the agreement between
the Company and the Selling Shareholder with respect to contribution as provided
in the Stock Purchase Agreement.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or the Selling
Shareholder submitted pursuant hereto shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company or the
Selling Shareholder, and shall survive delivery of the Securities to the
Underwriters.
SECTION 9. Termination of Agreement.
------------------------
25
(a) Termination; General. The Representative may terminate this
Agreement, by notice to the Company and the Selling Shareholder, at any time at
or prior to Closing Time (i) if there has been, since the time of execution of
this Agreement or since the respective dates as of which information is given in
the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company, whether or not arising in the ordinary course of business, or (ii) if
there has occurred any material adverse change in the financial markets in the
United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representative, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or
materially limited by the Commission or the Nasdaq National Market, or if
trading generally on the American Stock Exchange or the New York Stock Exchange
or in the Nasdaq National Market has been suspended or materially limited, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers, Inc. or
any other governmental authority, or (iv) if a banking moratorium has been
declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the Underwriters. If one or more
of the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Securities which it or they are obligated to purchase under this Agreement
(the "Defaulted Securities"), the Representative(s) shall have the right, but
not the obligation, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase,
each severally and not jointly, all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set
forth; if, however, the Representative(s) shall not have completed such
arrangements within such 24-hour period, then this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter.
No action pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representative or the Company shall have the right
to postpone the Closing Time or the Representative or the Selling Shareholder
shall have the right to postpone the relevant Date of Delivery for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements.
26
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representative(s) at North Tower, World
Financial Center, 250 Vesey Street, New York, New York 10281, attention of
Equity Capital Markets and notices to the Company shall be directed to it at 777
Old Saw Mill River Road, Tarrytown, New York 10591-6707, attention of Murray
Goldberg, Chief Financial Officer; and notices to the Selling Shareholder shall
be directed to Amgen Inc., One Amgen Center Drive, Thousand Oaks, California
91320-1789, attention of Corporate Secretary.
SECTION 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters, the Company and the Selling Shareholder and
their respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and the Selling Shareholder and their
respective successors and the controlling persons and officers and directors
referred to in Sections 6 and 7 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company and the Selling Shareholder and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
27
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Selling Shareholder a
counterpart hereof, whereupon this instrument, along with all counterparts, will
become a binding agreement among the Underwriters, the Company and the Selling
Shareholder in accordance with its terms.
Very truly yours,
REGENERON PHARMACEUTICALS, INC.
By /s/ Murray A. Goldberg
---------------------------------------
Title: Senior Vice President and C.F.O.
AMGEN INC.
By /s/ Kathryn E. Falberg
---------------------------------------
Title: Senior Vice President, Finance
and C.F.O.
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
LEHMAN BROTHERS INC.
J.P. MORGAN SECURITIES INC.
FLEETBOSTON ROBERTSON STEPHENS INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By /s/ Elaine Sun
----------------------------------------
Authorized Signatory
For itself and as Representative of the other Underwriters named in Schedule A
hereto.
SCHEDULE A
Maximum Maximum
Number of Number of
Initial Option
Name of Underwriter Securities Securities
------------------- ---------- ----------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated....................................................... 1,040,000 156,000
Lehman Brothers Inc. ...................................................... 520,000 78,000
J.P. Morgan Securities Inc................................................. 520,000 78,000
FleetBoston Robertson Stephens Inc......................................... 520,000 78,000
Total...................................................................... 2,600,000 390,000
========= =======
Sch A - 1
SCHEDULE B
List of Sellers
---------------
Number of Number of
Initial Option
Name of Seller Securities Securities
-------------- ----------- -----------
Regeneron Pharmaceuticals, Inc............................................. 2,600,000 0
Amgen Inc. ................................................................ 0 390,000
Total...................................................................... 2,600,000 390,000
========= =======
Sch B - 1
SCHEDULE C
REGENERON PHARMACEUTICALS, INC.
2,600,000 Shares of Common Stock
(Par Value $0.001 Per Share)
1. The public offering price per share for the
Securities, determined as provided in said Section 2, shall be $29.75.
2. The purchase price per share for the Securities to be paid
by the several Underwriters shall be $28.27, being an amount equal to
the public offering price set forth above less $1.48 per share;
provided that the purchase price per share for any Option Securities
purchased upon the exercise of the over-allotment option described in
Section 2(b) shall be reduced by an amount per share equal to any
dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities.
Sch C - 1
SCHEDULE D
List of persons and entities
subject to lock-up
Charles A. Baker
Michael S. Brown, M.D.
Jesse M. Cedarbaum, M.D.
Beverly C. Dubs
Alfred G. Gilman, M.D., Ph.D.
Murray A. Goldberg
Joseph L. Goldstein, M.D.
Hans-Peter Guler, M.D.
Stephen L. Holst
Richard X. Horne
Douglas S. McCorkle
Fred A. Middleton
Fred Plum
William G. Roberts, M.D.
Randall G. Rupp, Ph.D.
Leonard S. Schleifer, M.D., Ph.D.
Eric M. Shooter, Ph.D
George L. Sing
Joseph M. Sorrentino, Ph.D.
Neil Stahl, Ph.D.
The Procter & Gamble Company
P. Roy Vagelos, M.D.
David M. Valenzuela, Ph.D.
George D. Yancopoulos, M.D., Ph.D.
Glaxo Wellcome, Inc.
Sch D - 1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
A-1
Exhibit B
FORM OF OPINION FOR SPECIAL INTELLECTUAL PROPERTY COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
B-1
Exhibit C
FORM OF OPINION OF COUNSEL FOR THE SELLING SHAREHOLDER
TO BE DELIVERED PURSUANT TO SECTION 5(c)
C-1
[Form of lock-up from directors, officers or other stockholders pursuant
to Section 5(k)]
Exhibit D
o, 2000
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
LEHMAN BROTHERS INC.
J.P. MORGAN SECURITIES INC.
FLEETBOSTON ROBERTSON STEPHENS INC.
as Representative(s) of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281
Re: Proposed Public Offering by Regeneron Pharmaceuticals, Inc.
-----------------------------------------------------------
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of
Regeneron Pharmaceuticals, Inc. corporation (the "Company"), understands that
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
("Merrill Lynch"), Lehman Brothers Inc., J.P. Morgan Securities Inc. and
FleetBoston Robertson Stephens proposes to enter into a Purchase Agreement (the
"Purchase Agreement") with the Company and the Selling Shareholder providing for
the public offering of shares (the "Securities") of the Company's common stock,
par value $0.001 per share (the "Common Stock"). In recognition of the benefit
that such an offering will confer upon the undersigned as a stockholder [and an
officer and/or director] of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the Purchase Agreement
that, during a period of 90 days from the date of the Purchase Agreement, the
undersigned will not, without the prior written consent of Merrill Lynch,
directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant for the sale of, or otherwise dispose of or
transfer any shares of the Company's Common Stock or any securities convertible
into or exchangeable or exercisable for Common Stock, whether now owned or
hereafter acquired by the undersigned or with respect to which the undersigned
has or hereafter acquires the power of disposition, or file any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing or (ii) enter into any swap or any other agreement or any
transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Common Stock, whether any such
D-1
swap or transaction is to be settled by delivery of Common Stock or other
securities, in cash or otherwise.
Very truly yours,
Signature:------------------
Print Name:-----------------
D-2
Exhibit E
Information Provided by Selling Shareholder
The following information was furnished to the Company specifically for
use in the Registration Statement. The name and address and the Shares of Common
Stock of the Company beneficially owned by the Selling Shareholder prior to the
Offering, which are set forth under the caption "Selling Shareholder."
E-1
Table of Contents
PURCHASE AGREEMENT....................................................................................................2
SECTION 1. Representations and Warranties..........................................................4
(a) Representations and Warranties by the Company...........................................4
(i) Compliance with Registration Requirements.....................................4
(ii) Incorporated Documents........................................................5
(iii) Independent Accountants.......................................................5
(iv) Financial Statements..........................................................5
(v) No Material Adverse Change in Business........................................5
(vi) Good Standing of the Company..................................................6
(vii) Good Standing of Subsidiaries.................................................6
(viii) Capitalization................................................................6
(ix) Authorization of Agreement....................................................6
(x) Authorization and Description of Securities...................................6
(xi) Absence of Defaults and Conflicts.............................................7
(xii) Absence of Labor Dispute......................................................7
(xiii) Absence of Proceedings........................................................8
(xiv) Accuracy of Exhibits..........................................................8
(xv) Possession of Intellectual Property...........................................8
(xvi) Absence of Further Requirements...............................................8
(xvii) Possession of Licenses and Permits............................................9
(xviii) Title to Property.............................................................9
(xix) Environmental Laws............................................................9
(xx) Investment Company Act.......................................................10
(xxi) FDA and PTO Proceedings......................................................10
(xxii) Compliance with Cuba Act.....................................................10
(b) Representations and Warranties by the Selling Shareholder..............................10
(i) Accurate Disclosure..........................................................10
(ii) Authorization of Agreements..................................................11
(iii) Direct Holder of Securities; Title to Option Securities......................11
(iv) Absence of Manipulation......................................................11
(v) Absence of Further Requirements..............................................11
(vi) Restriction on Sale of Securities............................................12
(vii) Certificates Suitable for Transfer...........................................12
(viii) No Association with NASD.....................................................12
(c) Officer's Certificates.................................................................12
SECTION 2. Sale and Delivery to Underwriters; Closing.............................................13
(a) Initial Securities.....................................................................13
(b) Option Securities......................................................................13
(c) Payment................................................................................13
(d) Denominations; Registration............................................................14
SECTION 3. Covenants of the Company...............................................................14
(a) Compliance with Securities Regulations and Commission Requests.........................14
(b) Filing of Amendments...................................................................15
i
(c) Delivery of Registration Statements....................................................15
(d) Delivery of Prospectuses...............................................................15
(e) Continued Compliance with Securities Laws..............................................15
(f) Blue Sky Qualifications................................................................16
(g) Rule 158...............................................................................16
(h) Use of Proceeds........................................................................16
(i) Listing................................................................................16
(j) Restriction on Sale of Securities......................................................17
(k) Reporting Requirements.................................................................17
SECTION 4. Payment of Expenses....................................................................17
(a) Expenses...............................................................................17
(b) Expenses of the Selling Shareholder....................................................18
(c) Termination of Agreement...............................................................18
(d) Allocation of Expenses.................................................................18
SECTION 5. Conditions of Underwriters' Obligations................................................18
(a) Effectiveness of Registration Statement................................................18
(b) Opinion of Counsel for Company.........................................................18
(c) Opinion of Counsel for Underwriters....................................................18
(d) Officers' Certificate..................................................................19
(e) Accountants' Comfort Letter............................................................19
(f) Bring-down Comfort Letter..............................................................19
(g) Approval of Listing....................................................................19
(h) No Objection...........................................................................19
(i) Lock-up Agreements.....................................................................20
(j) Conditions to Purchase of Option Securities............................................20
(i) Officers' Certificate........................................................20
(ii) Certificate of Selling Shareholder...........................................20
(iii) Opinion of Counsel for Company...............................................20
(iv) Opinion of Counsel for the Selling Shareholder...............................20
(v) Opinion of Counsel for Underwriters..........................................21
(vi) Bring-down Comfort Letter....................................................21
(k) Additional Documents...................................................................21
(l) Termination of Agreement...............................................................21
SECTION 6. Indemnification........................................................................21
(a) Indemnification of Underwriters........................................................21
(b) Indemnification of Company, Directors and Officers and Selling
Shareholder............................................................................23
(c) Actions against Parties; Notification..................................................23
(d) Settlement without Consent if Failure to Reimburse.....................................24
(e) Other Agreements with Respect to Indemnification.......................................24
SECTION 7. Contribution...........................................................................24
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.........................26
SECTION 9. Termination of Agreement...............................................................26
(a) Termination; General...................................................................26
(b) Liabilities............................................................................27
SECTION 10. Default by One or More of the Underwriters.....................................................27
ii
SECTION 11. Notices........................................................................................27
SECTION 12. Parties........................................................................................27
SECTION 13. GOVERNING LAW AND TIME.........................................................................28
SECTION 14. Effect of Headings.............................................................................28
iii
SCHEDULES
Schedule A - List of Underwriters............................................................. Sch A-1
Schedule B - List of Sellers.................................................................. Sch B-1
Schedule C - Pricing Information.............................................................. Sch C-1
Schedule D - List of Persons and Entities Subject to Lock-up.................................. Sch D-1
EXHIBITS
Exhibit A - Form of Opinion of Company's Counsel.............................................. A-1
Exhibit B - Form of Opinion for Special Intellectual Property Counsel......................... B-1
Exhibit C - Form of Opinion of Counsel for the Selling Stockholder............................ C-1
Exhibit D - Form of Lock-up Letter............................................................ D-1
Exhibit E - Information Provided by Selling Shareholder....................................... E-1
v