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Exhibit 10.1
COR THERAPEUTICS, INC.
5.00% CONVERTIBLE SUBORDINATED NOTES DUE MARCH 1, 2007
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PURCHASE AGREEMENT
February 17, 2000
Goldman, Sachs & Co.,
Chase H&Q, A Division of Chase Securities Inc.,
CIBC World Markets Corp.,
FleetBoston Robertson Stephens Inc.,
Warburg Dillon Read LLC,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
COR Therapeutics, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$250,000,000 principal amount of the Convertible Subordinated Notes specified
above, convertible into common stock, par value $0.001 ("Stock"), of the Company
(the "Firm Securities") and, at the election of the Purchasers, up to an
aggregate of $50,000,000 additional aggregate principal amount of such Notes
(the "Optional Securities"). The Firm Securities and the Optional Securities
which the Purchasers elect to purchase pursuant to Section 2 hereof are herein
collectively called the "Securities".
The Purchasers and other holders (including subsequent transferees) of
Securities in registered form without coupons will be entitled to the benefits
of the registration rights agreement, to be dated as of the First Time of
Delivery (as defined in Section 4) (the "Registration Rights Agreement"), by and
among the Company and the Purchasers, in the form attached hereto as Exhibit A.
Pursuant to the Registration Rights Agreement, the Company will agree to file
with the Securities and Exchange Commission (the "Commission") under the
circumstances set forth therein a shelf registration statement (the
"Registration Statement") pursuant to Rule 415 under the Securities Act of 1933,
as amended (the "Securities Act"), relating to the resale of the Securities and
shares of Stock initially issuable upon conversion of the Securities by holders
thereof, and to use its reasonable efforts to cause such shelf registration
statement to be declared effective as provided therein.
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
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(a) (i) An offering circular, dated February 17, 2000 (the
"Offering Circular"), has been prepared in connection with the offering
of the Securities and the shares of Stock issuable upon conversion
thereof. Any reference to the Offering Circular shall be deemed to refer
to and include the Company's most recent Annual Report on Form 10-K for
the fiscal year ended December 31, 1998 and Quarterly Report on Form
10-Q for the quarter ended September 30, 1999, which are attached to and
made a part of the Offering Circular, and all subsequent documents filed
by the Company with the Commission pursuant to Section 13(a), 13(c) or
15(d) of the United States Securities Exchange Act of 1934, as amended
(the "Exchange Act"), on or prior to the date of the Offering Circular,
and any reference to the Offering Circular, as amended or supplemented,
as of any specified date, shall be deemed to include (i) any documents
filed with the Commission pursuant to Section 13(a), 13(c) or 15(d) of
the Exchange Act after the date of the Offering Circular and prior to
such specified date and (ii) any Additional Issuer Information (as
defined in Section 5(f)) furnished by the Company prior to the
completion of the distribution of the Securities; and all documents
filed under the Exchange Act and so deemed to be included the Offering
Circular or any amendment or supplement thereto are hereinafter called
the "Exchange Act Reports". The Offering Circular and any amendments or
supplements thereto did not and will not, as of their respective dates,
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply
to any statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by a Purchaser
through Goldman, Sachs & Co. expressly for use therein;
(ii) The Exchange Act Reports, when they were or are filed
with the Commission, conformed or will conform in all material respects
to the applicable requirements of the Exchange Act and the applicable
rules and regulations of the Commission thereunder, and the Exchange Act
Reports did not and will not, as of their respective dates, contain an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(iii) The information provided by the Company pursuant to
Section 5(f) will not, at the date thereof, contain any untrue statement
of a material fact or omit to state any material fact necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(b) The Company has not sustained since the date of the latest
audited financial statements included in the Offering Circular any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Offering Circular;
and, since the respective dates as of which information is given in the
Offering Circular, there has not been any decrease in the capital stock
or increase in long-term debt in excess of $1 million of the Company or
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of
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operations of the Company, otherwise than as set forth or contemplated
in the Offering Circular;
(c) The Company has good and marketable title to all material
personal property owned by it, free and clear of all liens, encumbrances
and defects except such as are described in the Offering Circular or
such as do not interfere with the use made and proposed to be made of
such property by the Company; and any real property and buildings held
under lease by the Company are held by it under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such property and
buildings by the Company; the Company owns no real property;
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with full corporate power and authority to own or lease its
properties and conduct its business as described in the Offering
Circular, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so
qualified in any such jurisdiction; the Company has no subsidiaries;
(e) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are
fully paid and non-assessable; the shares of Stock initially issuable
upon conversion of the Securities have been duly and validly authorized
and reserved for issuance and, when issued and delivered in accordance
with the provisions of the Securities and the Indenture (as defined in
Section I(f)), will be duly and validly issued, fully paid and
non-assessable and will conform to the description of the Stock
contained in the Offering Circular;
(f) The Securities have been duly authorized and, when issued and
delivered pursuant to this Agreement, will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company enforceable in accordance
with their terms and entitled to the benefits provided by the indenture
to be dated as of February 24, 2000 (the "Indenture") between the
Company and Firstar Bank, as Trustee (the "Trustee"), under which they
are to be issued, which will be substantially in the form previously
delivered to you; the Indenture has been duly authorized and, when
executed and delivered by the Company and the Trustee, the Indenture
will constitute a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Securities and the Indenture will conform to the
descriptions thereof in the Offering Circular and will be in
substantially the form previously delivered to you;
(g) None of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of
the Exchange Act, or any regulation promulgated thereunder,
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including, without limitation, Regulations G, T, U, and X of the Board
of Governors of the Federal Reserve System;
(h) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might reasonably have been expected to cause or
result in stabilization or manipulation of the price of any security of
the Company in connection with the offering of the Securities;
(i) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the
Registration Rights Agreement, the Indenture and this Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject, nor will such action result in any violation of the provisions
of the Certificate of Incorporation or By-laws of the Company or, except
as to any violations which would not have a Material Adverse Effect (as
defined below), any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale
of the Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Registration Rights Agreement or the
Indenture, except (i) as required pursuant to the Registration Rights
Agreement, (ii) for the approval of the Stock issuable upon conversion
of the Securities for quotation on the Nasdaq National Market, and,
(iii) such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Purchasers;
(j) The Company is not in violation of its Certificate of
Incorporation or By-laws or in default in the performance or observance
of any material obligation, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, material lease or
other material agreement or instrument to which it is a party or by
which it or any of its properties may be bound;
(k) The statements set forth in the Offering Circular under the
captions "Description of the Notes" and "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Securities and the Stock, and under the caption "Underwriting", insofar
as they purport to describe the provisions of the documents referred to
therein, accurately and fairly present in all material respects such
matters and documents (to the same extent as would be required if the
Offering Circular were a prospectus included in a Registration Statement
of the Company on Form S-1 under the Securities Act);
(l) Other than as set forth in the Offering Circular, there are
no legal or governmental proceedings pending to which the Company is a
party or of which any property of the Company is the subject which, if
determined adversely to the Company, would individually or in the
aggregate have a material adverse effect on the business, prospects,
financial condition or results of operations of the Company or on the
ability of the Company to consummate the
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transactions contemplated herein (a "Material Adverse Effect"); and, to
the Company's knowledge, no such proceedings are threatened by
governmental authorities or by others;
(m) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities which are
listed on a national securities exchange registered under Section 6 of
the Exchange Act or quoted in a U.S. automated inter-dealer quotation
system;
(n) The Company is subject to Section 13 or 15(d) of the Exchange
Act;
(o) The Company is not, and after giving effect to the offering
and sale of the Securities, will not be, an "investment company", as
such term is defined in the United States Investment Company Act of
1940, as amended (the "Investment Company Act");
(p) Neither the Company, nor any person acting on its behalf has
offered or sold the Securities by means of any general solicitation or
general advertising within the meaning of Rule 502(c) under the
Securities Act (except that no representation or warranty is made with
respect to the Purchasers or any persons acting on their behalf);
(q) Within the preceding six months, neither the Company nor any
other person acting on behalf of the Company has offered or sold to any
person any Securities, or any securities of the same or a similar class
as the Securities, other than Securities offered or sold to the
Purchasers hereunder. The Company will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the
United States or to any U.S. person (as defined in Rule 902 under the
Securities Act) of any Securities or any substantially similar security
issued by the Company, within six months subsequent to the date on which
the distribution of the Securities has been completed (as notified to
the Company by Goldman, Sachs & Co.), is made under restrictions and
other circumstances reasonably designed not to affect the status of the
offer and sale of the Securities in the United States and to U.S.
persons contemplated by this Agreement as transactions exempt from the
registration provisions of the Securities Act (except that no
representation or warranty is made with respect to the Purchasers or any
persons acting on their behalf);
(r) It is not necessary in connection with the offer, sale and
delivery of the Securities to the Purchasers, or in connection with the
initial resale of the Securities by the Purchasers in accordance with
this Agreement, to register the Securities under the Securities Act or
to qualify an indenture under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act");
(s) The Securities have been designated PORTAL eligible
securities in accordance with the rules and regulations of the National
Association of Securities Dealers, Inc.;
(t) The Company has all requisite corporate power to enter into
this Agreement and the Registration Rights Agreement. This Agreement has
been and, as of the First Time of Delivery (as defined below), the
Registration Rights Agreement will have been, duly authorized, executed
and delivered by the Company and upon such execution by the Company
(assuming the due authorization, execution and delivery of such
agreements by the
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other parties thereto) this Agreement and the Registration Rights
Agreement will constitute the valid and binding obligations of the
Company enforceable against the Company in accordance with the terms
hereof or thereof, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equity
principles, and except as the enforcement of indemnification and
contribution provisions hereof and thereof may be limited by applicable
law;
(u) Except as disclosed in the Offering Circular, there are no
persons with registration rights or other similar rights to have any
securities of the Company (other than the Securities and the shares of
Stock issuable upon conversion thereof) registered under any Securities
Act registration statement;
(v) None of the holders of outstanding shares of capital stock of
the Company and no other person has or will have any preemptive or other
rights to purchase, subscribe for or otherwise acquire (i) the shares of
Stock to be issued upon conversion of the Securities or any rights to
such shares (other than those granted by the holders of the Securities)
or (ii) as a result of or in connection with the transactions
contemplated by the Indenture, this Agreement or the Registration Rights
Agreement, any other capital stock of the Company or rights thereto;
(w) The Company's directors and executive officers, in each case
as listed on Exhibit B-1, have entered into a written agreement with the
Company in the form of Exhibit B hereto (each such agreement, a "Lock-up
Agreement"), and executed originals of each Lock-up Agreement have been
delivered to you;
(x) To the Company's knowledge, Ernst & Young LLP, who have
certified certain financial statements of the Company, are independent
public accountants as required by the Securities Act and the rules and
regulations of the Commission thereunder;
(y) The Company has reviewed its operations and its interfaces
with third-party systems to evaluate the extent to which the business or
operations of the Company will be affected by the Year 2000 Problem. As
a result of such review, the Company represents and warrants that the
disclosure in the Offering Circular relating to the Year 2000 Problem is
accurate and complies in all material respects with the rules and
regulations under the Securities Act (to the same extent as would be
required if the Offering Circular were a prospectus included in a
Registration Statement of the Company on Form S-1 under the Securities
Act). The "Year 2000 Problem" as used herein means any significant risk
that computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind will not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1, 2000;
(z) (i) The Company owns, or possesses adequate rights to use,
all material trademarks, service marks, trade names, trademark
registrations, service mark registrations, domain names and copyrights
necessary for the conduct of its business and, except as set
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forth in the Offering Circular, has not received any notice of any claim
of conflict with any such rights of others except as would not have a
Material Adverse Effect; and (ii) to the Company's knowledge, the
Company has not infringed and is not infringing any trademarks, service
marks, trade names, trademark registrations, service mark registrations,
domain names or copyrights, which infringement could reasonably be
expected to result in any Material Adverse Effect;
(aa) (i) The Company owns or possesses adequate rights to use,
all material patents necessary for the conduct of its business; (ii) to
the Company's knowledge, no valid United States patent is or would be
infringed by the activities of the Company, except as would not have a
Material Adverse Effect; (iii) except as set forth in the Offering
Circular, there are no actions, suits or judicial proceedings pending
relating to patents or proprietary information to which the Company is a
party or of which any property of the Company is subject, and, to the
knowledge of the Company, no actions, suits or judicial proceedings are
threatened in writing by governmental authorities or others, in each
case except as would not result in any Material Adverse Effect; and (iv)
except as set forth in the Offering Circular or as would not result in
any Material Adverse Effect, the Company has not been notified in
writing that the Company is infringing or otherwise violating the
patents or other intellectual property of others and is not aware of any
rights of third parties to any of the Company's material patent
applications, license patents or licenses that in any case could affect
materially the use thereof by the Company;
(bb) The Company carries, or is covered by, insurance as is
customary for companies similarly situated and engaged in similar
businesses in similar industries;
(cc) No labor disturbance by the employees of the Company exists
or, to the knowledge of the Company, is imminent which might be expected
to have a Material Adverse Effect; and
(dd) The Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of
toxic substances and protection of health or the environment
("Environmental Laws") which are applicable to its business except for
failure to comply which would not have a Material Adverse Effect. The
Company has received no written notice from any governmental authority
or third party of an asserted claim under Environmental Laws, which
claim is required to be disclosed in the Offering Circular. To its
knowledge, the Company has not conducted any activity which would
require it to make material capital expenditures to comply with
Environmental Laws. No property which is owned, leased or occupied by
the Company has been designated a Superfund site pursuant to the
Comprehensive Response, Compensation, and Liability Act of 1980, as
amended (42 U.S.C. ss. 9601, et seq.), or otherwise designated as a
contaminated site (which designation as a contaminated site would be
expected to be material to the Company) under applicable state or local
law.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 96.5% of the principal amount thereof, plus accrued interest, if any,
from February 24, 2000 to the First Time of Delivery hereunder, the principal
amount of Firm Securities set forth opposite the name of such Purchaser in
Schedule I hereto, and
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(b) in the event and to the extent that you shall exercise the election to
purchase Optional Securities as provided below, the Company agrees to issue and
sell to each of the Purchasers, and each of the Purchasers agrees, severally and
not jointly, to purchase from the Company, at the same purchase price set forth
in clause (a) of this Section 2, the aggregate principal amount of the Optional
Securities as to which such election shall have been exercised (to be adjusted
by you so as to eliminate denominations of less than U.S.$1,000) determined by
multiplying such aggregate principal amount of Optional Securities by a
fraction, the numerator of which is the maximum aggregate principal amount of
Optional Securities which such Purchaser is entitled to purchase as set forth
opposite the name of such Purchaser in Schedule I hereto and the denominator of
which is the maximum aggregate principal amount of Optional Securities which all
of the Purchasers are entitled to purchase hereunder.
The Company hereby grants to the Purchasers the right to purchase at
their election up to $50,000,000 aggregate principal amount of Optional
Securities, at the purchase price set forth in clause (a) of the first paragraph
of this Section 2, for the sole purpose of covering sales of Securities in
excess of the number of Firm Securities. Any such election to purchase Optional
Securities may be exercised by written notice from you to the Company, given
within a period of 30 calendar days after the date of this Agreement, setting
forth the aggregate principal amount of Optional Securities to be purchased and
the date on which such Optional Securities are to be delivered, as determined by
you but in no event earlier than the First Time of Delivery or, unless you and
the Company otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
3. Upon the authorization by you of the release of the Securities, the
several Purchasers propose to offer the Securities for sale upon the terms and
conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to: persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Securities Act in transactions meeting the
requirements of Rule 144A;
(b) It is an institution that is an "accredited investor" within the
meaning of Rule 501 under the Securities Act; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Securities Act.
4. (a) The Securities will be represented by one or more definitive
global Securities in book-entry form which will be deposited by or on behalf of
the Company with The Depository Trust Company ("DTC") or its designated
custodian. The Company will deliver the Securities to the Purchasers, against
payment by the Purchasers of the purchase price therefor by wire transfer to the
Company of Federal (same day) funds, by causing DTC to credit the Securities to
the account of the Purchasers at DTC. The Company will cause the certificates
representing the Securities to be made available to the Purchasers for checking
at least twenty-four hours prior to the Time of Delivery (as defined below) at
the office of DTC or its designated custodian (the "Designated Office"). The
time and date of such delivery and payment shall be, with respect to Firm
Securities, 7:00 a.m., San
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Francisco time, on February 24, 2000 or such other time and date as the
Purchasers and the Company may agree upon in writing and, with respect to the
Optional Securities, 7:00 a.m. San Francisco time, on the date specified by the
Purchasers in the written notice given by the Purchasers of the Purchasers'
election to purchase such Optional Securities, or such other time and date as
the Purchasers and the Company may agree upon in writing. Such time and date for
delivery of the Firm Securities is herein called the "First Time of Delivery",
such time and date for delivery of the Optional Securities, if not the First
Time of Delivery, is herein called the "Second Time of Delivery", and each such
time and date for delivery is herein called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Purchasers pursuant to Section 7(j) hereof, will be delivered at such time and
date at the offices of Cooley Godward LLP, 3000 El Camino Real, Palo Alto,
California 94306 (the "Closing Location"), and the Securities will be delivered
at the Designated Office, all at the Time of Delivery. A meeting will be held at
the Closing Location at 2:00 p.m., San Francisco time, on the New York Business
Day next preceding the Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be
available for review by the parties hereto. For the purposes of this Section 4,
"New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in New York are
generally authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form approved by you; to make
no amendment or any supplement to the Offering Circular which shall be
reasonably disapproved by you promptly after reasonable notice thereof; and to
furnish you with copies thereof;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Securities and the shares of Stock issuable upon
conversion of the Securities for offering and sale under the securities laws of
such U.S. jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such U.S. jurisdictions
for as long as may be necessary to complete the distribution of the Securities,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process or taxation in any jurisdiction;
(c) To furnish the Purchasers with four copies of the Offering Circular
and each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report in the Offering Circular, and
any amendment or supplement containing amendments to the financial statements
covered by such report, signed by the accountants, and additional copies thereof
in such quantities as you may from time to time reasonably request, and if, at
any time prior to the expiration of nine months after the date of the Offering
Circular, any event shall have occurred as a result of which the Offering
Circular as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Offering Circular is delivered, not misleading, or, if for any other
reason it shall be necessary or desirable during such same period to amend or
supplement the Offering Circular, to notify you and upon your request to prepare
and furnish without charge to each Purchaser and to any
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dealer in securities as many copies as you may from time to time reasonably
request of an amended Offering Circular or a supplement to the Offering Circular
which will correct such statement or omission or effect such compliance;
(d) During the period beginning from the date of the Offering Circular
and continuing until the date 90 days after the date of the Offering Circular,
not to offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any securities of the Company that are substantially similar to the
Securities or the Stock, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to receive,
Stock or any such substantially similar securities other than (i) pursuant to
employee stock option plans and employee stock purchase plans existing on, or
upon the conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement, or upon conversion of the
Securities, (ii) as consideration for acquisitions of businesses, (iii) pursuant
to equipment or lease or facilities financing activities entered into in the
ordinary course of business, or (iv) to a strategic partner of the Company in
conjunction with an agreement involving a technical, manufacturing and/or
marketing collaboration occurring after the date of the Offering Circular,
provided that each recipient of shares pursuant to these clauses (ii) through
(iv) agrees that all such shares remain subject to restrictions substantially
similar to those contained in this subsection; and that the Company will use
reasonable efforts to cause each person who has entered into a Lock-up Agreement
to comply therewith, will not grant any waivers or consents to non-compliance
therewith and will enforce its rights under each such agreement, in each case
unless and to the extent that it shall have obtained your prior consent;
(e) Not to be or become, at any time prior to the expiration of three
years after the Time of Delivery, an open-end investment company, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of Securities,
to furnish at its expense, upon request, to holders of Securities and
prospective purchasers of securities information (the "Additional Issuer
Information") satisfying the requirements of subsection (d)(4)(i) of Rule 144A
under the Securities Act;
(g) To use its reasonable efforts to cause the Securities to be eligible
for the PORTAL trading system of the National Association of Securities Dealers,
Inc.;
(h) To furnish to the holders of the Securities as soon as practicable
after the end of each fiscal year an annual report (including a balance sheet
and statements of income, stockholders' equity and cash flows of the Company and
its consolidated subsidiaries certified by independent public accountants) and,
as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of the
Offering Circular), consolidated summary financial information of the Company
and its subsidiaries for such quarter in reasonable detail;
(i) During a period of five years from the date of the Offering
Circular, provided any of the Securities are then outstanding, to furnish to you
copies of all reports or other communications (financial or other) furnished to
stockholders of the Company, and to deliver to you (i) as soon as they
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are available, copies of any reports and financial statements furnished to or
filed with the Commission or any securities exchange on which the Securities or
any class of securities of the Company is listed, provided that any reports,
financial statements or other communications that are available by EDGAR need
not be furnished; and (ii) such additional information concerning the business
and financial condition of the Company as you may from time to time reasonably
request (such financial statements to be on a consolidated basis to the extent
the accounts of the Company and its subsidiaries are consolidated in reports
furnished to its stockholders generally or to the Commission);
(j) During the period of two years after the Time of Delivery, the
Company will not, and will not permit any of its "affiliates" (as defined in
Rule 144 under the Securities Act) to, resell any of the Securities which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them;
(k) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Offering
Circular under the caption "Use of Proceeds";
(l) To reserve and keep available at all times, free of preemptive
rights, shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue shares of its Stock upon conversion of the Securities; and
(m) To use its reasonable efforts to list, subject to notice of
issuance, the shares of Stock issuable upon conversion of the Securities on the
Nasdaq National Market.
6. The Company covenants and agrees with the several Purchasers that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
issue of the Securities and the shares of Stock issuable upon conversion of the
Securities and all other expenses in connection with the preparation, printing
and filing of the Offering Circular and any amendments and supplements thereto
and the mailing and delivering of copies thereof to the Purchasers and dealers;
(ii) the cost of printing or producing the Blue Sky and Legal Investment
Memoranda, if any, in connection with the offering, purchase, sale and delivery
of the Securities; (iii) all expenses in connection with the qualification of
the Securities and the shares of Stock issuable upon conversion of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Purchasers in connection with such qualification and in connection with the Blue
Sky and legal investment surveys; (iv) any fees charged by securities rating
services for rating the Securities; (v) the cost of preparing the Securities;
(vi) the fees and expenses of the Trustee and any agent of the Trustee and the
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities; (vii) any cost incurred in connection with the
designation of the Securities for trading in PORTAL and the listing of the
shares of Stock issuable upon conversion of the Securities on the Nasdaq
National Market; and (viii) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Purchasers will pay
all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Securities by them, and any advertising
expenses connected with any offers they may make.
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7. The obligations of the Purchasers hereunder, as to the Securities to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) Sullivan & Cromwell, counsel for the Purchasers, shall have
furnished to you such opinion or opinions, dated such Time of Delivery, with
respect to such matters as you may reasonably request, and such counsel shall
have received such papers and information as they may reasonably request to
enable them to pass upon such matters;
(b) Cooley Godward LLP, counsel for the Company, and Patrick Broderick,
Senior Vice President and General Counsel of the Company, shall have furnished
to you their written opinions, dated such Time of Delivery, in form and
substance satisfactory to you, to the effect that:
In the case of the opinion of Cooley Godward LLP:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Delaware,
with full corporate power and authority to own or lease its properties
and to conduct its business as described in the Offering Circular;
(ii) The Company has an authorized capitalization as set forth in
the Offering Circular, and all of the issued shares of capital stock of
the Company have been duly and validly authorized and issued and are
fully paid and nonassessable; and the shares of Stock initially issuable
upon conversion of the Securities have been duly and validly authorized
and reserved for issuance and, when issued and delivered in accordance
with the provisions of the Securities and the Indenture, will be duly
and validly issued and fully paid and non-assessable, and will conform
to the description of the Stock contained in the Offering Circular under
the caption "Description of Capital Stock";
(iii) To such counsel's knowledge, the Company is duly qualified
to do business as a foreign corporation and is in good standing as a
foreign corporation authorized to do business in the State of
California;
(iv) To such counsel's knowledge and other than as set forth in
the Offering Circular, there are no legal or governmental proceedings
pending to which the Company is a party or of which any property of the
Company is subject that would be required to be described in the
Offering Circular, to the same extent as would be required if the
Offering Circular were a prospectus included in a Registration Statement
of the Company on Form S-1 under the Securities Act;
(v) This Agreement and the Registration Rights Agreement have
been duly authorized, executed and delivered by the Company;
(vi) The Securities have been duly authorized, executed,
authenticated, issued and delivered and constitute valid and legally
binding obligations of the Company enforceable in accordance with their
terms and entitled to the benefits provided by the Indenture, subject,
as
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to enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles; and the Securities and the Indenture
conform to the descriptions thereof contained in the Offering Circular
under the caption "Description of the Notes" (such counsel being
entitled to rely on the opinion of Sullivan & Cromwell as to matters of
New York law);
(vii) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Trustee, constitutes a valid and legally binding
instrument, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors' rights and to
general equity principles (such counsel being entitled to rely on the
opinion of Sullivan & Cromwell as to matters of New York law);
(viii) The issue and sale of the Securities and the compliance by
the Company with all of the provisions of the Securities, the Indenture,
the Registration Rights Agreement and this Agreement and the
consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
listed by the Company as an exhibit to the Company's Annual Report on
Form 10-K for the year ended December 31, 1998, nor will such actions
result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or, to such
counsel's knowledge, any rule or regulation of any governmental agency
or body having jurisdiction over the Company or any of its properties
(except for the securities or Blue Sky laws of the various states as to
which such counsel need not express any opinion) or, to such counsel's
knowledge, any order of any court entered against the Company;
(ix) No consent, approval, authorization, order, registration or
qualification of or with any governmental agency or body is required for
the offer and sale of the Securities or the consummation by the Company
of the transactions contemplated by this Agreement, the Registration
Rights Agreement or the Indenture, except such as may be required under
the Securities Act and blue sky laws of the various states in connection
with registration, pursuant to the Registration Rights Agreement, of the
Securities and the shares of Stock issuable upon conversion of the
Securities and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities
by the Purchasers;
(x) The statements set forth in the Offering Circular under the
captions "Description of the Notes" and "Description of Capital Stock",
insofar as they purport to constitute a summary of the terms of the
Securities and the Stock, and under the captions "Certain United States
Federal Income Tax Consequences", insofar as they purport to describe
the provisions of the laws and documents referred to therein, fairly
present in all material respects such legal matters and documents (to
the same extent as would be required if the Offering Circular were a
prospectus included in a Registration Statement of the Company on Form
S-1 under the Securities Act);
(xi) No registration of the Securities or the shares of Stock
issued upon conversion of the Securities under the Securities Act, and
no qualification of an indenture under the Trust
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Indenture Act with respect to the Securities, is required for the offer
and sale by the Company and the offer and initial resale of the
Securities by the Purchasers in the manner contemplated by this
Agreement assuming (i) the accuracy of, and compliance with, the
Purchasers' representations and agreements contained in Section 3 of the
Purchase Agreement, (ii) the accuracy of the representations of the
Company set forth in Sections 1(m), 1(n), 1(p) and 1(q) of the Purchase
Agreement and (iii) the Securities are sold pursuant to the Offering
Circular;
(xii) The Company is not an "investment company", as such term is
defined in the Investment Company Act;
(xiii) To such counsel's knowledge, the Company is licensed to
use, or owns, each patent application and patent listed on Exhibit 2 to
its opinion (such exhibit to be consistent with the draft exhibit
previously furnished to Sullivan & Cromwell) (the "Patent Portfolio");
(xiv) To such counsel's knowledge, except as otherwise described
in Exhibit 2, no third party has any rights to the patent applications
and patents listed in the Patent Portfolio for the manufacture, use or
sale of Integrelin;
(xv) The Company's United States patent applications listed in
the Patent Portfolio have been prepared and filed in the United States
Patent and Trademark Office (the "USPTO") in a form and with
accompanying papers that are acceptable to the USPTO for the purposes of
according each such application a filing date and serial number, and of
placing each such application in condition for eventual examination on
the merits as to patentability. For each such United States application,
an Official Filing Receipt has been received from the USPTO. As to each
of such applications, such counsel is not aware of any material defect
of form in preparation or filing; and all United States patent
applications in the Patent Portfolio have been issued as United States
patents.
(xvi) The statements contained in the Offering Circular under the
caption "Risk Factors--If we are unable to protect our patents and
proprietary rights we may not be able to compete successfully" and in
the Form 10-K attached to the Offering Circular under the caption
"Patents, Proprietary Rights and Licenses" as they pertain to the Patent
Portfolio, insofar as such statements constitute matters of law, are a
fair and accurate summary of the matters set forth therein, to the
extent required under the Act and the applicable Rules and Regulations;
(xvii) To such counsel's knowledge, other than as set forth in
the Offering Circular, the Company has received no notice of any
infringement of, conflict with or misappropriation by a third party of
any claim for which patent applications have been filed with respect to
the Patent Portfolio or notice of any unresolved infringement of, or
conflict with or proceedings against or misappropriation by the Company
of any patents, trade secrets, trademarks, trade names, copyrights or
other proprietary rights of a third party, which, either individually or
in the aggregate, is material to the Company;
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(xviii) To such counsel's knowledge, the Company or its licensor
is the sole assignee of record for each patent application and patent
listed in the Patent Portfolio. Except as otherwise noted in the Patent
Portfolio, for each of the United States patent applications and patents
listed in the Patent Portfolio, the assignments by the named inventors
have been submitted to the USPTO and those assignments have been
recorded in the Patent Office title records; and
(xix) To such counsel's knowledge, as to each of the Company's
foreign patent applications listed in the Patent Portfolio, the
applications have either (a) except as noted in the Patent Portfolio,
been submitted to patent firms in the respective foreign countries with
instructions to file the applications in the patent offices of those
countries naming the Company as the applicant of record, or (b) as to
certain Patent Cooperation Treaty applications, been submitted directly
to the relevant receiving office naming the Company as the applicant of
record. To such counsel's knowledge and except as noted in the Patent
Portfolio, as to each of such applications, the Company has not received
notice from any foreign filing authority of any material defect of form
in preparation or filing that the Company has not cured within the
relevant cure period;
Subject to the final sentence of this paragraph, such counsel
shall also state that they have no reason to believe that the Offering
Circular and any further amendments or supplements thereto made by the
Company prior to such Time of Delivery (other than the financial
statements, including supporting schedules and other financial data
derived from accounting records and included therein, as to which such
counsel need express no opinion) contained as of its date or contains as
of such Time of Delivery an untrue statement of a material fact or
omitted or omits, as the case may be, to state a material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Such counsel will be required to
provide the statement described in this paragraph only if counsel for
the Purchasers is concurrently providing a similar statement to the
Purchasers pursuant to Section 7(a).
The opinion of Cooley Godward LLP described in this Section 7(b)
shall be rendered to you at the request of the Company and shall so
state therein. In providing the statement with respect to the matters
covered in the last paragraph of Section 7(b), Cooley Godward LLP may
state that its statement and belief are based upon its participation in
the preparation, together with the Purchasers, Purchaser's counsel and
the Company's independent accountants, of the Offering Circular and any
amendments and supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification
except as specified;
In the case of the opinion of Patrick Broderick:
(i) The Exchange Reports (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they were filed with the Commission, complied as to form
in all material respects with the requirements of the Exchange Act, and
the rules and regulations of the Commission thereunder; and such counsel
has no reason to believe that any of such documents, when they were so
filed, contained an
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untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading;
(c) On the date of the Offering Circular prior to the execution of this
Agreement and also at such Time of Delivery, Ernst & Young LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex I hereto;
(d) (i) The Company shall not have sustained since the date of the
latest audited financial statements included in the Offering Circular any loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Offering Circular, and (ii) since the respective dates as of
which information is given in the Offering Circular there shall not have been
any change in the capital stock or long-term debt of the Company or any change,
or any development involving a prospective change, in or affecting the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company, otherwise than as set forth or contemplated in the
Offering Circular, the effect of which, in any such case described in clause (i)
or (ii), is in your judgment so material and adverse as to make it impracticable
or inadvisable to proceed with the offering or the delivery of the Securities on
the terms and in the manner contemplated in this Agreement and in the Offering
Circular;
(e) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization", as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company's debt securities;
(f) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on the Nasdaq National Market; (ii)
a suspension or material limitation in trading in the Company's securities on
the Nasdaq National Market; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
offering or the delivery of the Securities on the terms and in the manner
contemplated in the Offering Circular;
(g) The Securities shall have been designated for trading on PORTAL;
(h) Each Lock-up Agreement shall have been duly executed and delivered
to the Company and you, and there shall have occurred no breach of any Lock-up
Agreement;
(i) The shares of Stock issuable upon conversion of the Securities shall
have been duly listed, subject to notice of issuance, on the Nasdaq National
Market; and
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(j) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, and as to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser may become subject, under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any preliminary offering circular or
the Offering Circular, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact necessary to make the statements therein not misleading, and will reimburse
each Purchaser for any legal or other expenses reasonably incurred by such
Purchaser in connection with investigating or defending any such action or claim
as such expenses are incurred; provided, however, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary offering
circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through Goldman, Sachs & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any preliminary offering circular or the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in any preliminary offering circular or the Offering
Circular or any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such Purchaser through
Goldman, Sachs & Co. expressly for use therein; and will reimburse the Company
for any legal or other expenses reasonably incurred by the Company in connection
with investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its
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election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written consent
of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (i)
includes an unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include a statement as to,
or an admission of, fault, culpability or a failure to act, by or on behalf of
any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Purchasers on the other from the offering
of the Securities. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Purchasers on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Purchasers on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Purchasers, in each case
as set forth in the Offering Circular. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company on the one hand or the Purchasers
on the other and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Purchasers agree that it would not be just and equitable if contribution
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Purchasers 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 subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Purchaser
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
investors were offered to investors exceeds the amount of any damages which such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. The Purchasers' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
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(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act; and the obligations of the
Purchasers under this Section 8 shall be in addition to any liability which the
respective Purchasers may otherwise have and shall extend, upon the same terms
and conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Securities Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder, you may in your discretion
arrange for you or another party or other parties to purchase such Securities on
the terms contained herein. If within thirty-six hours after such default by any
Purchaser you do not arrange for the purchase of such Securities, then the
Company shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company that you have so arranged for the purchase of
such Securities, or the Company notifies you that it has so arranged for the
purchase of such Securities, you or the Company shall have the right to postpone
the Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary. The term "Purchaser" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities, then the Company shall have
the right to require each non-defaulting Purchaser to purchase the principal
amount of Securities which such Purchaser agreed to purchase hereunder and, in
addition, to require each non-defaulting Purchaser to purchase its pro rata
share (based on the principal amount of Securities which such Purchaser agreed
to purchase hereunder) of the Securities of such defaulting Purchaser or
Purchasers for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities, or if the Company shall not exercise the right described
in subsection (b) above to require non-defaulting Purchasers to purchase
Securities of a defaulting Purchaser or Purchasers, then this Agreement shall
thereupon terminate, without liability on the part of any non-defaulting
Purchaser or the Company, except for the expenses to be borne by the Company and
the Purchasers as provided in Section 6 hereof and the indemnity and
contribution agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
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10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
the Company shall not then be under any liability to any Purchaser except as
provided in Sections 6 and 8 hereof; but, if for any other reason, the
Securities are not delivered by or on behalf of the Company as provided herein,
the Company will reimburse the Purchasers through you for all out-of-pocket
expenses approved in writing by you, including fees and disbursements of
counsel, reasonably incurred by the Purchasers in making preparations for the
purchase, sale and delivery of the Securities, but the Company shall then be
under no further liability to any Purchaser except as provided in Sections 6 and
8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by Goldman, Sachs & Co. on behalf of you as the
Representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the Representatives in care of Goldman, Sachs &
Co., 32 Old Slip, 21st Floor, New York, New York 10005, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular, Attention: General Counsel; provided, however, that any notice to a
Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Purchaser at its address set forth in
its Purchasers' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the
benefit of, the Purchasers, the Company and, to the extent provided in Sections
8 and 10 hereof, the officers and directors of the Company and each person who
controls the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
20
21
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please sign
and return to us six counterparts hereof, and upon the acceptance hereof by you,
on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Purchasers is pursuant to the authority set forth in a form of Agreement
among Purchasers, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
COR THERAPEUTICS, INC.
By: /s/ PETER S. RODDY
------------------------------------
Name: Peter S. Roddy
Title: Vice President, Finance
Accepted as of the date hereof:
Goldman, Sachs & Co.,
Chase H&Q, A Division of Chase Securities Inc.,
CIBC World Markets Corp.,
FleetBoston Robertson Stephens Inc.,
Warburg Dillon Read LLC
By: /s/ GOLDMAN, SACHS & CO.
--------------------------------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Purchasers
21
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SCHEDULE I
PRINCIPAL AMOUNT OF
OPTIONAL SECURITIES
PRINCIPAL AMOUNT OF TO BE PURCHASED IF
FIRM SECURITIES TO MAXIMUM OPTION
PURCHASER BE PURCHASED EXERCISED
Goldman, Sachs & Co........................................ $150,000,000 $ 30,000,000
Chase H&Q, A Division of Chase Securities Inc. ............ 25,000,000 5,000,000
CIBC World Markets Corp. .................................. 25,000,000 5,000,000
FleetBoston Robertson Stephens, Inc. ...................... 27,500,000 5,500,000
Warburg Dillon Read LLC .................................. 22,500,000 4,500,000
Total.................................... $250,000,000 $ 50,000,000
23
ANNEX I
Pursuant to Section 7(c) of the Purchase Agreement, the accountants
shall furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the
Securities Exchange Act of 1934 (the "Exchange Act") and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the consolidated financial statements and
financial statement schedules audited by them and included in the
Offering Circular comply as to form in all material respects with the
applicable requirements of the Exchange Act and the related published
rules and regulations;
(iii) The unaudited selected financial information with respect
to the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Offering
Circular agrees with the corresponding amounts (after restatements where
applicable) in the audited consolidated financial statements for such
five fiscal years;
(iv) On the basis of limited procedures not constituting an audit
in accordance with generally accepted auditing standards, consisting of
a reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included in the Offering Circular,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Offering Circular are not in conformity
with generally accepted accounting principles applied on the
basis substantially consistent with the basis for the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Offering Circular;
(B) any other unaudited income statement data and balance
sheet items included in the Offering Circular do not agree with
the corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included
in the Offering Circular;
(C) the unaudited financial statements which were not
included in the Offering Circular but from which were derived any
unaudited condensed financial statements
24
referred to in clause (A) and any unaudited income statement data
and balance sheet items included in the Offering Circular and
referred to in clause (B) were not determined on a basis
substantially consistent with the basis for the audited
consolidated financial statements included in the Offering
Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to
form in all material respects with the applicable accounting
requirements or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights and
pursuant to the Company's employee stock purchase plan, upon
earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest financial statements included in the
Offering Circular) or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases in
consolidated net current assets or stockholders' equity or other
items specified by the Representatives, or any increases in any
items specified by the Representatives, in each case as compared
with amounts shown in the latest balance sheet included in the
Offering Circular except in each case for changes, increases or
decreases which the Offering Circular discloses have occurred or
may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Offering Circular to the specified
date referred to in clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified
by the Representatives, or any increases in any items specified
by the Representatives, in each case as compared with the
comparable period of the preceding year and with any other period
of corresponding length specified by the Representatives, except
in each case for decreases or increases which the Offering
Circular discloses have occurred or may occur or which are
described in such letter; and
(v) In addition to the examination referred to in their report(s)
included in the Offering Circular and the limited procedures, inspection
of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally
accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives,
which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Offering Circular, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
I-2
25
EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
A-1
26
EXHIBIT B
COR THERAPEUTICS, INC.
LOCK-UP AGREEMENT
DATED AS OF FEBRUARY 15, 2000
Goldman, Sachs & Co.,
Chase H&Q, A Division of Chase Securities Inc.,
CIBC World Markets Corp.,
FleetBoston Robertson Stephens Inc.,
Warburg Dillon Read LLC,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, NY 10004.
Re: COR Therapeutics, Inc. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the
"Representatives"), propose to enter into a Purchase Agreement on behalf of the
several Purchasers named in Schedule I to such agreement (collectively, the
"Purchasers"), with COR Therapeutics, Inc., a Delaware corporation (the
"Company"), providing for an offering of Convertible Subordinated Notes (the
"Notes") of the Company that will be convertible into shares of the Common Stock
of the Company (the "Common Stock").
In consideration of the agreement by the Purchasers to offer and sell
the Notes, and of other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees that,
during the period beginning from the date of the final Offering Circular
covering the offering of the Notes and continuing to and including the date 90
days after the date of such final Offering Circular (the "Lock-Up Period"), the
undersigned will not offer, sell, contract to sell, pledge, grant any option to
purchase, make any short sale or otherwise dispose of, or exercise any
registration rights with respect to, any shares of Common Stock of the Company,
or any options or warrants to purchase any shares of Common Stock of the
Company, or any securities convertible into, exchangeable for or that represent
the right to receive shares of Common Stock of the Company, whether now owned or
hereinafter acquired, owned directly by the undersigned (including holding as a
custodian) or with respect to which the undersigned has beneficial ownership
within the rules and regulations of the Securities and Exchange Commission (the
"SEC") (collectively the "Undersigned's Shares").
B-1
27
The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction which is designed
to or which reasonably could be expected to lead to or result in a sale or
disposition of the Undersigned's Shares even if such Shares would be disposed of
by someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to any of the Undersigned's Shares or with respect to any security
that includes, relates to, or derives any significant part of its value from
such Shares.
Notwithstanding the foregoing, the undersigned may transfer the
Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee
or donees thereof agree to be bound in writing by the restrictions set forth
herein, (ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned, provided that the trustee of the
trust agrees to be bound in writing by the restrictions set forth herein, and
provided further that any such transfer shall not involve a disposition for
value, (iii) with the prior written consent of Goldman, Sachs & Co. on behalf of
the Purchasers or, (iv) after the first 60 days of the Lock-Up Period, the
undersigned may transfer up to ten percent (10%) of the Undersigned's Shares
without any restrictions pursuant to this Lock-Up Agreement. For purposes of
this Lock-Up Agreement, "immediate family" shall mean any relationship by blood,
marriage or adoption, not more remote than first cousin. The undersigned now
has, and, except as contemplated by clause (i), (ii), (iii) or (iv) above, for
the duration of this Lock-Up Agreement will have, good and marketable title to
the Undersigned's Shares, free and clear of all liens, encumbrances, and claims
whatsoever. The undersigned also agrees and consents to the entry of stop
transfer instructions with the Company's transfer agent and registrar against
the transfer of the Undersigned's Shares except in compliance with the foregoing
restrictions.
The undersigned understands that the Company and the Purchasers are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns.
Very truly yours,
----------------------------------------
Exact Name of Shareholder
----------------------------------------
Authorized Signature
----------------------------------------
Title
B-2
28
EXHIBIT B-1
List of person to sign
Lock-Up Agreements:
VAUGHN M. KAILIAN
CHARLES J. HOMCY
SHAUN R. COUGHLIN
JAMES T. DOLUISIO
JERRY T. JACKSON
ERNEST MARIO
ROBERT MOMSEN
LLOYD HOLLINGSWORTH SMITH JR.
MARK PERRIN
LEE RAUCH
PATRICK BRODERICK
B-3