Exhibit 1.1
ALTUS PHARMACEUTICALS INC.
(a Delaware corporation)
6,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: -, 2006
ALTUS PHARMACEUTICALS INC.
(a Delaware corporation)
6,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
PURCHASE AGREEMENT
-, 2006
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, and
▇▇ ▇▇▇▇▇ & Co., LLC
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Altus Pharmaceuticals Inc., a Delaware corporation (the "Company"),
confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇ ▇▇▇▇▇
& Co., LLC are acting as representatives (in such capacity, the
"Representatives"), with respect to 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 $.01 per share, of the
Company ("Common Stock") set forth in said Schedule A, and with respect to the
grant by the Company to the Underwriters, acting severally and not jointly, of
the option described in Section 2(b) hereof to purchase all or any part of
900,000 additional shares of Common Stock to cover overallotments, if any. The
aforesaid 6,000,000 shares of Common Stock (the "Initial Securities") to be
purchased by the Underwriters and all or any part of the 900,000 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 understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem 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-1 (No. 333-129037), including
the related preliminary prospectus or prospectuses, covering the registration of
the Securities under the Securities Act of 1933, as amended (the "1933 Act").
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 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 amendments thereto, the exhibits and any schedules
thereto, at the time it became effective, and including the Rule 430A
Information, 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 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 ("▇▇▇▇▇").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Underwriter as of the date hereof, the Applicable Time
referred to in Section 1(a)(i) 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, as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement, any Rule 462(b) Registration Statement and any
post-effective amendment thereto has become effective under the 1933 Act
and no stop order suspending the effectiveness of the Registration
Statement, any Rule 462(b) Registration Statement or any post-effective
amendment thereto 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 (including any prospectus wrapper), 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.
As of the Applicable Time (as defined below), neither (x) the Issuer
General Use Free Writing Prospectus(es) (as defined below) issued at or
prior to the Applicable Time and the Statutory Prospectus (as defined
below) as of the Applicable Time and the information included on Schedule
B hereto, all considered together (collectively, the "General Disclosure
Package"), nor (y) any individual Issuer Limited Use Free Writing
Prospectus, when considered together with the General Disclosure Package,
included any untrue statement of a material fact or omitted 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.
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As used in this subsection and elsewhere in this Agreement:
"Applicable Time" means -:00 [a/p]m (Eastern time) on -, 2006 or
such other time as agreed upon in writing by the Company and ▇▇▇▇▇▇▇
▇▇▇▇▇.
"Issuer Free Writing Prospectus" means any "issuer free writing
prospectus," as defined in Rule 433 of the 1933 Act Regulations ("Rule
433"), relating to the Securities that (i) is required to be filed with
the Commission by the Company, (ii) is a "road show for an offering that
is a written communication" within the meaning of Rule 433(d)(8)(i)
whether or not required to be filed with the Commission, or (iii) is
exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a
description of the Securities or of the offering that does not reflect the
final terms, in each case in the form filed or required to be filed with
the Commission or, if not required to be filed, in the form required to be
retained in the Company's records pursuant to Rule 433(g).
"Issuer General Use Free Writing Prospectus" means any Issuer Free
Writing Prospectus that is intended for general distribution to
prospective investors (other than a Bona Fide Electronic Road Show (as
defined below)), as evidenced by its being specified in Schedule D hereto.
"Issuer Limited Use Free Writing Prospectus" means any Issuer Free
Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
"Statutory Prospectus" as of any time means the prospectus relating
to the Securities that is included in the Registration Statement
immediately prior to that time.
The Company has made available a "bona fide electronic road show,"
as defined in Rule 433, in compliance with Rule 433(d)(8)(ii) (the "Bona
Fide Electronic Road Show") such that no filing of any "road show" (as
defined in Rule 433(h)) is required in connection with the offering of the
Securities.
Each Issuer Free Writing Prospectus, as of its issue date and at all
subsequent times through the completion of the public offer and sale of
the Securities or until any earlier date that the issuer notified or
notifies ▇▇▇▇▇▇▇ ▇▇▇▇▇ of certain matters as described in Section 3(e)
hereof, did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in
the Registration Statement or the Prospectus, and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded or
modified.
The representations and warranties in this subsection shall not
apply to statements in or omissions from the Registration Statement (or
any amendment thereto), the Prospectus (or any amendment or supplement
thereto) or any Issuer Free Writing Prospectus made in reliance upon and
in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use therein.
Each preliminary prospectus (including the prospectus filed as part
of the Registration Statement as originally filed or as part of any
amendment thereto) complied when so filed in all material respects with
applicable 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 transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
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At the time of filing the Registration Statement, any 462(b)
Registration Statement and any post-effective amendments thereto and at
the date hereof, the Company was not and is not an "ineligible issuer," as
defined in Rule 405 of the 1933 Act Regulations ("Rule 405").
(ii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants with respect to the Company
as required by the 1933 Act and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in the
Registration Statement, the General Disclosure Package and the Prospectus,
together with the related schedules and notes, present fairly in all
material respects the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
operations, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; and 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, present fairly in
accordance with GAAP the information required to be stated therein. All
disclosures contained in the Registration Statement, the General
Disclosure Package or the Prospectus regarding "non-GAAP financial
measures" (as such term is defined by the rules and regulations of the
Commission) comply in all material respects with Regulation G under the
Securities Exchange Act of 1934, as amended (the "1934 Act") and Item 10
of Regulation S-K under the Act, to the extent applicable. 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. The pro forma financial
statements and the related notes thereto included in the Registration
Statement, the General Disclosure Package and the Prospectus present
fairly the information shown therein, have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases
described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions and circumstances referred to therein.
(iv) Accounting Controls. The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance
with management's general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with GAAP and to maintain accountability for assets; (C) access
to assets is permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. Since the end of the
Company's most recent audited fiscal year, (I) to the knowledge of the
Company, there has been no material weakness in the Company's internal
control over financial reporting (whether or not remediated) and (II)
there has been no change in the Company's internal control over financial
reporting that has materially affected, or is reasonably likely to
materially affect, the Company's internal control over financial
reporting.
(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement, the
General Disclosure Package or the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the
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ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries 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.
(vi) Payment of Taxes. All United States federal income tax returns
of the Company and its subsidiaries required by law to be filed have been
filed and all taxes shown by such returns or otherwise assessed, which are
due and payable, have been paid, except assessments against which appeals
have been or will be promptly taken and as to which adequate reserves have
been provided. The United States federal income tax returns of the Company
through the fiscal year ended December 31, 2004 have been settled and no
assessment in connection therewith has been made against the Company. The
Company and its subsidiaries have filed all other tax returns that are
required to have been filed by them pursuant to applicable foreign, state,
local or other law except insofar as the failure to file such returns
would not result in a Material Adverse Effect, and has paid all taxes due
pursuant to such returns or pursuant to any assessment received by the
Company and its subsidiaries, except for such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been
provided. The charges, accruals and reserves on the books of the Company
in respect of any income and corporation tax liability for any years not
finally determined are adequate to meet any assessments or re-assessments
for additional income tax for any years not finally determined, except to
the extent of any inadequacy that would not result in a Material Adverse
Effect.
(vii) 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 Delaware 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; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect.
(viii) Good Standing of Subsidiary. Altus Pharmaceuticals Securities
Corporation is the only subsidiary of the Company (the "Subsidiary"). The
Subsidiary has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus
and is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the issued and
outstanding capital stock of the Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the
Company, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity; none of the outstanding shares of capital
stock of the Subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of the Subsidiary.
(ix) 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
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the exercise of convertible securities or options referred to in the
Prospectus). The shares of issued and outstanding capital stock of the
Company 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 was issued in violation of the preemptive or other similar rights
of any securityholder of the Company.
(x) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(xi) Authorization and Description of Securities. The Securities
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 and fully paid and non-assessable; the
Common Stock conforms in all material respects to all statements relating
thereto contained in the Prospectus and such description conforms to the
rights set forth in the instruments defining the same; no holder of the
Securities will be subject to personal liability by reason of being such a
holder; and the issuance of the Securities is not subject to the
preemptive or other similar rights of any securityholder of the Company,
which have not been validly waived.
(xii) Absence of Defaults and Conflicts. Neither the Company nor any
of its subsidiaries is in violation of its charter or by-laws 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 any of its subsidiaries 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 any subsidiary 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 and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the 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 any subsidiary pursuant to, the
Agreements and Instruments (except for such conflicts, breaches, defaults
or Repayment Events 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
any subsidiary 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 any
subsidiary or any of their material assets, properties or operations. 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 any subsidiary.
(xiii) Absence of Labor Dispute. No organized labor dispute with the
employees of the Company or any subsidiary 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 any
subsidiary's principal suppliers, manufacturers, customers or contractors,
which, in either case, would result in a Material Adverse Effect.
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(xiv) 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 any
subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which could reasonably be
expected to result in a Material Adverse Effect, or which could reasonably
be expected to 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 any subsidiary 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 result in a Material Adverse Effect.
(xv) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been so
described and filed as required.
(xvi) Statistical and Market-Related Data. Any statistical and
market-related data included in the Registration Statement, the General
Disclosure Package and the Prospectus are based on or derived from sources
that the Company believes to be reliable and accurate, and, if required,
the Company has obtained the written consent to the use of such data from
such sources.
(xvii) Possession of Intellectual Property. Except as described in
the General Disclosure Package and the Prospectus, (a) the Company owns,
possesses or has adequate rights to use the Company Intellectual Property
(as defined below), (b) the Company has not received any notice of any
infringement of, or conflict with, any Intellectual Property of any third
party, (c) no third party, including any academic or governmental
organization, possesses or could obtain rights to the Company Intellectual
Property which, if exercised, could enable such party to develop products
competitive with those of the Company, and (d) neither the Company nor the
Subsidiary is obligated to pay a material royalty, grant a material
license, or provide other material consideration to any third party in
connection with the Company Intellectual Property. Except as described in
the General Disclosure Package and the Prospectus or as would not have a
Material Adverse Effect, (x) the Company is not aware of any facts or
circumstances that constitute an infringement by the Company of any valid
claim of a third-party patent, (y) the Company is not aware of any facts
or circumstances that constitute an infringement by the Company of, or
conflict with, any non-patented Intellectual Property right of any third
party, and (z) the Company is not aware of any facts or circumstances that
would render any Company Intellectual Property invalid or unenforceable.
For purposes of this Agreement, "Intellectual Property" means patents,
patent rights, patent applications, licenses, inventions, copyrights, know
how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names, and "Company Intellectual
Property" means Intellectual Property that is necessary to carry on the
business now operated and as planned to be operated by the Company as
described in the Prospectus.
(xviii) PTO Applications. The Company has duly and properly filed or
caused to be filed with the United States Patent and Trademark Office (the
"PTO") and applicable foreign and international patent authorities all
patent applications owned by the Company (the "Company Patent
Applications"). To the knowledge of the Company, the Company has complied
with the PTO's duty of candor and disclosure for the Company
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Patent Applications and has made no material misrepresentation in the
Company Patent Applications. To the knowledge of the Company, the Company
has complied with the duty of candor and disclosure for the Company Patent
Applications pending in countries outside the United States. The Company
is not aware of any information material to a determination of
patentability regarding the Company Patent Applications not called to the
attention of the PTO or similar foreign authority. The Company is not
aware of any information not called to the attention of the PTO or similar
foreign authority which would preclude the grant of a patent for the
Company Patent Applications. The Company has no knowledge of any
information which would preclude the Company from having clear title to
the Company Patent Applications.
(xix) 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, except such as have been already obtained
or as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws.
(xx) Absence of Manipulation. Neither the Company nor any affiliate
of the Company has taken, nor will the Company or any affiliate take,
directly or indirectly, any action which is designed to or which has
constituted or which would be expected to cause or result in stabilization
or manipulation, as such terms are used in Regulation M promulgated by the
Commission and related interpretations, of the price of any security of
the Company to facilitate the sale or resale of the Securities.
(xxi) Possession of Licenses and Permits. The Company and the
Subsidiary possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business of the Company as described in the
Prospectus, including without limitation, all such registrations,
approvals, certificates, authorizations and permits required by the United
States Food and Drug Administration (the "FDA") or any other federal,
state, local or foreign agencies or bodies engaged in the regulation of
clinical trials, pharmaceuticals, biologics or biohazardous substances or
materials, except where the failure so to possess would not, singly or in
the aggregate, result in a Material Adverse Effect; the Company and the
Subsidiary are in compliance with the requirements of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, result in 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, singly or
in the aggregate, result in a Material Adverse Effect; and neither the
Company nor the Subsidiary 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. The Company
has no reason to believe that any party granting any such Governmental
Licenses is considering limiting, suspending or revoking the same in any
material respect. The Company has not failed to submit to the FDA an
Investigational New Drug Application for a clinical trial it is conducting
or sponsoring, except where such failure would not, singly or in the
aggregate, have a Material Adverse Effect; all such submissions were in
material compliance with applicable laws when submitted and no material
deficiencies have been asserted by the FDA with respect to any such
submissions, except any deficiencies which could not, singly or in the
aggregate, have a Material Adverse Effect.
(xxii) Tests and Preclinical and Clinical Studies. The Company and
the Subsidiary have operated and currently are in compliance with all
applicable rules and regulations of the
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FDA or any other federal, state, local or foreign governmental body
exercising comparable authority, except where the failure to so operate or
be in compliance would not have a Material Adverse Effect. The tests and
preclinical and clinical studies conducted by or, to the Company's
knowledge, on behalf of the Company that are described in the Registration
Statement and the Prospectus were and, if still pending, are being,
conducted in all material respects in accordance with the protocols
submitted to the FDA or any foreign government exercising comparable
authority, procedures and controls pursuant to, where applicable, accepted
professional and scientific standards, and all applicable laws and
regulations; the descriptions of the tests and preclinical and clinical
studies, and results thereof, conducted by or, to the Company's knowledge,
on behalf of the Company contained in the Registration Statement and the
Prospectus are accurate and complete in all material respects; the Company
is not aware of any other trials, studies or tests, the results of which
reasonably call into question the results described or referred to in the
Registration Statement and the Prospectus; and the Company has not
received any written notice or correspondence from the FDA or any foreign,
state or local governmental body exercising comparable authority requiring
the termination, suspension, or clinical hold of any tests or preclinical
or clinical studies, or such written notice or correspondence from any
Institutional Review Board or comparable authority requiring the
termination or suspension of a clinical study, conducted by or on behalf
of the Company, which termination, suspension, or clinical hold would
reasonably be expected to have a Material Adverse Effect.
(xxiii) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them that
are material to the business of the Company, 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 materially interfere with the use
made and proposed to be made of such property by the Company or any of its
subsidiaries; and all of the leases and subleases material to the business
of the Company and its subsidiaries, considered as one enterprise, and
under which the Company or any of its subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any subsidiary has any notice of any material claim of any
sort that has been asserted by anyone adverse to the rights of the Company
or any subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any
such lease or sublease.
(xxiv) Investment Company Act. The Company is not required, 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 required, to register as an "investment company" under the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxv) 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 any of its
subsidiaries 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, asbestos-containing
materials or mold (collectively, "Hazardous Materials") or to the
manufacture, processing, distribution, use, treatment, storage,
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disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries 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, to the knowledge of the Company, 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 any of its subsidiaries and (D) to the Company's knowledge,
there are no events or circumstances that would 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 any of its subsidiaries relating to Hazardous
Materials or any Environmental Laws.
(xxvi) Registration Rights. There are no persons with registration
rights or other similar rights to have any securities registered pursuant
to the Registration Statement or, other than as described in the General
Disclosure Package and the Prospectus, otherwise registered by the Company
under the ▇▇▇▇ ▇▇▇.
(xxvii) Compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company has
taken all necessary actions to ensure that, upon the effectiveness of the
Registration Statement, it will be in compliance with all provisions of
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and all rules and regulations promulgated
thereunder or implementing the provisions thereof (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act") that are then in effect and which the Company is required to comply
with as of the effectiveness of the Registration Statement, and is
actively taking steps to ensure that it will be in compliance with other
applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act not currently in effect,
upon the effectiveness of such provisions, or which will become applicable
to the Company at all times after the effectiveness of the Registration
Statement.
(xxviii) Off-Balance Sheet Arrangements. There are no transactions,
arrangements or other relationships between and/or among the Company, its
subsidiaries, any of its affiliates (as such term is defined in Rule 405)
and any unconsolidated entity, including, but not limited to, any
structured finance, special purpose or limited purpose entity that could
reasonably be expected to materially affect the Company's liquidity or the
availability of or requirements for its capital resources required to be
described in the Prospectus which have not been described as required.
(xxix) Compliance with Laws. The Company and, to the Company's
knowledge, others who perform services on the Company's behalf have been
and are in compliance with all applicable federal, state, local and
foreign laws, rules, regulations, standards, orders and decrees governing
their respective businesses, including without limitation, all regulations
promulgated by the FDA or any other federal, state, local or foreign
agencies or bodies engaged in the regulation of pharmaceuticals, biologics
or biohazardous substances or materials, except where noncompliance would
not, singly or in the aggregate, have a Material Adverse Effect; and the
Company has not received any notice citing action or inaction by the
Company or others who perform services on the Company's behalf that would
constitute non-compliance with any applicable federal, state, local or
foreign laws, rules, regulations or standards.
(xxx) Director or Officer Loans. There are no outstanding loans,
advances (except normal advances for business expense in the ordinary
course of business) or guarantees or indebtedness by the Company or its
subsidiaries, to or for the benefit of any of the officers or directors of
the Company, or any of their respective family members.
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(xxxi) NASDAQ Listing. The Common Stock has been approved for
quotation on the NASDAQ National Market of the Nasdaq Stock Market, Inc.
(the "Nasdaq National Market"). The Company has taken all necessary
actions to ensure that, at such time as the Common Stock is quoted on the
Nasdaq National Market, it will be in compliance with all applicable
corporate governance requirements set forth in the Nasdaq Marketplace
Rules that are then in effect and is actively taking steps to ensure that
it will be in compliance with other applicable corporate governance
requirements set forth in the Nasdaq Marketplace Rules not currently in
effect upon the effectiveness of such requirements, or which are in effect
but not yet applicable to the Company.
(xxxii) NASD Matters. Except as disclosed in writing to ▇▇▇▇▇▇▇
▇▇▇▇▇, neither the Company nor, to the Company's knowledge, the Company's
officers, directors, securityholders or any of its affiliates (within the
meaning of the National Association of Securities Dealers, Inc. (the
"NASD") Conduct Rule 2720(b)(1)(a)), directly or indirectly controls, is
controlled by, or is under common control with, or is an associated person
(within the meaning of Article I, Section 1(dd) of the By-laws of the
NASD) of, any member firm of the NASD.
(xxxiii) Insurance. The Company and its subsidiaries carry or are
entitled to the benefits of insurance, with financially sound and
reputable insurers, in such amounts and covering such risks as the Company
believes to be generally maintained by companies of established repute
engaged in the same or similar business and at the same or a similar stage
of development, and all such insurance is in full force and effect. The
Company has no reason to believe that it or any subsidiary will not be
able (A) to renew its existing insurance coverage as and when such
policies expire or (B) to obtain comparable coverage from similar
institutions as may be necessary or appropriate to conduct its business as
described in the Prospectus and at a cost that would not result in a
Material Adverse Change. Neither the Company nor any subsidiary has been
denied any insurance coverage which it has sought or for which it has
applied.
(xxxiv) Foreign Corrupt Practices Act. Neither the Company nor, to
the knowledge of the Company, any director, officer, agent, employee,
affiliate or other person acting on behalf of the Company or any of its
subsidiaries is aware of or has taken any action, directly or indirectly,
that would result in a violation by such persons of the Foreign Corrupt
Practices Act of 1977, as amended, and the rules and regulations
thereunder (the "FCPA"), including, without limitation, making use of the
mails or any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give, or
authorization of the giving of anything of value to any "foreign official"
(as such term is defined in the FCPA) or any foreign political party or
official thereof or any candidate for foreign political office, in
contravention of the FCPA and the Company and, to the knowledge of the
Company, its affiliates have conducted their businesses in compliance with
the FCPA and the Company has instituted and maintains policies and
procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith.
(xxxv) Money Laundering Laws. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with
applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all applicable jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the "Money Laundering Laws") and no action, suit or
proceeding by or before any court or governmental agency, authority or
body or
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any arbitrator involving the Company or any of its subsidiaries with
respect to the Money Laundering Laws is pending or, to the knowledge of
the Company, threatened.
(xxxvi) OFAC. Neither the Company nor, to the knowledge of the
Company, any director, officer, agent, employee, affiliate or person
acting on behalf of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department ("OFAC"); and the Company will not directly or indirectly use
the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter 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 B, 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 Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional 900,000 shares of Common Stock
at the price per share set forth in Schedule B, 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 overallotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by ▇▇▇▇▇▇▇ ▇▇▇▇▇ to the Company 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇, but shall not be later than seven full
business days after the exercise of said option, nor in any event prior to the
Closing Time, as hereinafter defined. 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇ 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 ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ or at such
other place as shall be agreed upon by the Representatives 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
Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time").
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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 Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives 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 Representatives, 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. ▇▇▇▇▇▇▇ ▇▇▇▇▇, 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 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 Representatives 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
Representatives 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 notify the Representatives 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, (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, (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 or of any examination pursuant to Section 8(e) of the 1933 Act
concerning the Registration Statement and (v) if the Company becomes the subject
of a proceeding under Section 8A of the 1933 Act in connection with the offering
of the Securities. The Company will effect the filings required under Rule
424(b), in the manner and within the time period required by Rule 424(b)
(without reliance on Rule 424(b)(8)), 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. The Company will give the Representatives 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
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the time it became effective or to the Prospectus, and will furnish the
Representatives 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 Representatives or counsel for the
Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Representatives and counsel for the Underwriters, without charge,
signed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein) and signed copies of all consents and certificates of
experts, and will also deliver to the Representatives, 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 to the electronically transmitted copies thereof
filed with the Commission pursuant to ▇▇▇▇▇, 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, 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 ▇▇▇▇▇, 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 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) of this Agreement, 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. If at any time following
issuance of an Issuer Free Writing Prospectus there occurred or occurs an event
or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement relating to the Securities or included or would include an untrue
statement of a material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances prevailing at that subsequent time, not misleading, the Company
will promptly notify ▇▇▇▇▇▇▇ ▇▇▇▇▇ and will promptly amend or supplement, at its
own expense, such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate and to
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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.
(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 to the Underwriters 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.
(j) Restriction on Sale of Securities. During a period of 180 days from
the date of the Prospectus, the Company will not, without the prior written
consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (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 employee benefit plans of the Company referred to in the
Prospectus, (D) any shares of Common Stock or options to purchase shares of
Common Stock granted to consultants of the Company as compensation for their
services to the Company, or (E) up to an aggregate of 100,000 shares of Common
Stock sold to collaborators, vendors, manufacturers, distributors, customers or
other similar parties pursuant to a strategic alliance or collaboration at a
price greater than or equal to the then market price of the Common Stock,
provided, however, that in the case of subclauses (D) and (E) above, the
recipients of such Common Stock agree to execute a Lock-Up Agreement in the form
attached at Exhibit D hereto for the remainder of the term of such Lock-Up
Agreements.
(k) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 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 rules and regulations
of the Commission thereunder.
(l) Issuer Free Writing Prospectuses. The Company represents and agrees
that, unless it obtains the prior consent of the Representatives, and each
Underwriter represents and agrees that, unless it obtains the prior consent of
the Company and the Representatives, it has not made and will not make any offer
relating to the Securities that would constitute an "issuer free writing
prospectus," as defined in Rule 433, or that would otherwise constitute a "free
writing prospectus," as defined in Rule 405, required to be filed with the
Commission. Any such free writing prospectus consented to by the Representatives
or by the
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Company and the Representatives, as the case may be, is hereinafter referred to
as a "Permitted Free Writing Prospectus." The Company represents that it has
treated or agrees that it will treat each Permitted Free Writing Prospectus as
an "issuer free writing prospectus," as defined in Rule 433, and has complied
and will comply with the requirements of Rule 433 applicable to any Permitted
Free Writing Prospectus, including timely filing with the Commission where
required, legending and record keeping.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay 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, accountants and other advisors, (v) the
qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees 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, any Permitted Free Writing Prospectus and of the
Prospectus and any amendments or supplements thereto and any costs associated
with electronic delivery of any of the foregoing by the Underwriters to
investors, (vii) the preparation, printing and delivery to the Underwriters of
copies of the Blue Sky Survey and any supplement thereto, (viii) the fees and
expenses of any transfer agent or registrar for the Securities, (ix) the costs
and expenses of the Company relating to investor presentations on any "road
show" undertaken in connection with the marketing of the Securities, including
without limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged with the Company's
consent in connection with the road show presentations, travel and lodging
expenses of the representatives and officers of the Company and any such
consultants, and the cost of aircraft and other transportation chartered in
connection with the road show, (x) the filing fees incident to, and the
reasonable fees and disbursements of counsel to Underwriters in connection with,
the review by the NASD of the terms of the sale of the Securities, (xi) the fees
and expenses incurred in connection with the inclusion of the Securities in the
Nasdaq National Market and (xii) the costs and expenses (including without
limitation any damages or other amounts payable in connection with legal or
contractual liability) associated with the reforming of any contracts for sale
of the Securities made by the Underwriters caused by a breach of the
representation contained in the third paragraph of Section 1(a)(i). It is
understood that, subject to this section and Section 4(b) hereof, the
Underwriters will pay all of their costs and expenses, including fees and
disbursements of their counsel.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives 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.
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 contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder that are required to be
performed or satisfied by it at or prior to the Closing Time, and to the
following further conditions:
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(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 the
manner and within the time frame required by Rule 424(b) without reliance on
Rule 424(b)(8) 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 Representatives
shall have received an opinion, dated as of Closing Time, of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., counsel for the Company, 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 hereto and to such further effect as counsel to the Underwriters
may reasonably request.
(c) Opinion of Special Patent Counsel for Company. At Closing Time, the
Representatives shall have received an opinion, dated as of Closing Time, of
Ropes & ▇▇▇▇ LLP, special patent counsel for the Company, 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 B hereto and to such further effect as counsel to the Underwriters
may reasonably request.
(d) Opinions of European Special Patent Counsels for Company. At Closing
Time, the Representatives shall have received an opinion, dated as of Closing
Time, of each of Vossius & Partner and Uexkull & ▇▇▇▇▇▇▇▇, each European special
patent counsel for the Company, 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 Exhibits C-1 and
C-2 hereto, respectively, and to such further effect as counsel to the
Underwriters may reasonably request.
(e) Opinion of Counsel for Underwriters. At Closing Time, the
Representatives shall have received an opinion, dated as of Closing Time, of
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters, in form and substance satisfactory to the Representatives. 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 and the General Corporation Law of the State of
Delaware, upon the opinions of counsel satisfactory to the Representatives. 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 its subsidiaries and certificates of public officials.
(f) 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 or the General Disclosure Package, any material adverse
change in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business, and
the Representatives 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, in their respective capacities as such
officers, 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 effectiveness of
-17-
the Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or, to their knowledge, contemplated by the
Commission.
(g) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from Deloitte & Touche LLP a
letter dated such date, in form and substance satisfactory to the
Representatives, 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.
(h) Bring-down Comfort Letter. At Closing Time, the Representatives shall
have received from Deloitte & Touche LLP a letter, dated as of Closing Time, to
the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (g) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to Closing
Time.
(i) 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.
(j) 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.
(k) Lock-up Agreements. At the date of this Agreement, the Representatives
shall have received an agreement substantially in the form of Exhibit D hereto
signed by the persons listed on Schedule C hereto.
(l) 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 contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery and, at the relevant Date of Delivery, the
Representatives 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 the Closing Time pursuant to Section 5(f)
hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinions of (1)
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel for the
Company, (2) Ropes & ▇▇▇▇ LLP, special patent counsel for the Company, and
(3) Vossius & Partner and Uexkull & ▇▇▇▇▇▇▇▇, each European special patent
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 opinions, respectively, required by Sections
5(b), 5(c) and 5(d) hereof.
(iii) Opinion of Counsel for Underwriters. The favorable opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, 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(e) hereof.
(iv) Bring-down Comfort Letter. A letter from Deloitte & Touche LLP,
in form and substance satisfactory to the Representatives and dated such
Date of Delivery, substantially in the
-18-
same form and substance as the letter furnished to the Representatives
pursuant to Section 5(h) 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.
(m) 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 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 in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(n) 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 Representatives 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. The Company agrees to indemnify and
hold harmless each Underwriter, its affiliates, as such term is defined in Rule
501(b) under the 1933 Act (each, an "Affiliate"), its selling agents 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, any
Issuer Free Writing 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇), 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;
-19-
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 Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or
any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. 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 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, any Issuer Free Writing 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 ▇▇▇▇▇▇▇
▇▇▇▇▇ expressly for use therein.
(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 ▇▇▇▇▇▇▇ ▇▇▇▇▇, and, in
the case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. 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)(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 reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
-20-
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 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 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 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 (before deducting expenses) received by the Company
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 the cover of the
Prospectus.
The relative fault of the Company 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 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 and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 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 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 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 7, 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.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, 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 and each Underwriter's Affiliates and selling agents 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 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. The Underwriters' respective obligations
-21-
to contribute pursuant to this Section 7 are several in proportion to the number
of Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Underwriter or its
Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors or any person controlling the Company and (ii) delivery of
and payment for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, 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 or General
Disclosure Package, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, 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 Representatives, impracticable or inadvisable 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 NASD or any other governmental authority, or (iv) a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, or (v) if a banking moratorium has been
declared by Federal, New York or Massachusetts 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 Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase 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 Representatives shall not have
completed such arrangements within such 24-hour period, then:
(i) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the
non-defaulting Underwriters shall be obligated, severally and not jointly,
to purchase the full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
-22-
(ii) if the number of Defaulted Securities exceeds 10% of the number
of Securities to be purchased on such date, this Agreement or, with
respect to any Date of Delivery which occurs after the Closing Time, the
obligation of the Underwriters to purchase and of the Company to sell the
Option Securities to be purchased and sold on such Date of Delivery shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken 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 or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, 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. As used herein, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 10.
SECTION 11. Tax Disclosure. Notwithstanding any other provision of this
Agreement, from the commencement of discussions with respect to the transactions
contemplated hereby, the Company (and each employee, representative or other
agent of the Company) may disclose to any and all persons, without limitation of
any kind, the tax treatment and tax structure (as such terms are used in
Sections 6011, 6111 and 6112 of the U.S. Code and the Treasury Regulations
promulgated thereunder) of the transactions contemplated by this Agreement and
all materials of any kind (including opinions or other tax analyses) that are
provided relating to such tax treatment and tax structure.
SECTION 12. 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 Representatives at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq., Vice
President, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.; and
notices to the Company shall be directed to it at Altus Pharmaceuticals Inc.,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
Vice President, Finance, with a copy to Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
SECTION 13. No Advisory or Fiduciary Relationship. The Company
acknowledges and agrees that (a) the purchase and sale of the Securities
pursuant to this Agreement, including the determination of the public offering
price of the Securities and any related discounts and commissions, is an
arm's-length commercial transaction between the Company, on the one hand, and
the several Underwriters, on the other hand, (b) in connection with the offering
contemplated hereby and the process leading to such transaction each Underwriter
is and has been acting solely as a principal and is not the agent or fiduciary
of the Company or its respective stockholders, creditors, employees or any other
party, (c) no Underwriter has assumed or will assume an advisory or fiduciary
responsibility in favor of the Company with respect to the offering contemplated
hereby or the process leading thereto (irrespective of whether such Underwriter
has advised or is currently advising the Company on other matters) and no
Underwriter has any obligation to the Company with respect to the offering
contemplated hereby except the obligations expressly set forth in this
Agreement, (d) the Underwriters and their respective affiliates may be engaged
in a broad range of transactions that involve interests that differ from those
of each of the Company, and (e) the Underwriters have not provided any legal,
accounting, regulatory or tax advice with respect to the
-23-
offering contemplated hereby and the Company has consulted its own respective
legal, accounting, regulatory and tax advisors to the extent it deemed
appropriate.
SECTION 14. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Underwriters and the Company 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 and the Company 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 and the Company 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 15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 16. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT
AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY
TIME.
SECTION 17. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION 18. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
-24-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
ALTUS PHARMACEUTICALS INC.
By __________________________
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED, AND
▇▇ ▇▇▇▇▇ & CO., LLC
BY: ▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By _______________________________________
Authorized Signatory
For themselves and as Representatives of the other Underwriters named in
Schedule A hereto.
-25-
SCHEDULE A
Number of
Name of Underwriter Initial Securities
------------------- ------------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated...............
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated................................
▇▇ ▇▇▇▇▇ & Co., LLC..............................................
---------
Total............................................................ 6,000,000
=========
Schedule A -1
SCHEDULE B
ALTUS PHARMACEUTICALS INC.
- Shares of Common Stock
(Par Value $.01 Per Share)
1. The initial public offering price per share for the Securities,
determined as provided in said Section 2, shall be $-.
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $-, being an amount equal to the initial public
offering price set forth above less $- per share; provided that the purchase
price per share for any Option Securities purchased upon the exercise of the
overallotment 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.
Schedule B-1
SCHEDULE C
DIRECTORS
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇ Hen
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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OFFICERS
Don Byrston
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, M.D., PH.D.
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
5% OR GREATER SECURITYHOLDERS
CMEA Ventures Life Sciences 2000, Civil Law
Partnership
CMEA Ventures Life Sciences 2000, ▇.▇.
▇▇▇▇▇▇ Int'l plc
Nomura Phase4 Ventures LP
P/S BI Biomedicinsk Venture III
U.S. Venture Partners VIII, L.P.
USVP Entrepreneur Partners VIII-A, L.P.
USVP Entrepreneur Partners VIII-B, L.P.
USVP VIII Affiliates Fund, L.P.
Vertex Pharmaceuticals Incorporated
Warburg Pincus & Co.
Warburg Pincus Partners LLC
Warburg Pincus Private Equity VII, L.P.
OTHER SECURITY HOLDERS
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Schedule C -1
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Bilal ▇▇▇▇
▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ (▇▇▇▇▇▇▇) ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇
CDIB Biotech
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇
China Development Industrial Bank Inc.
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇
Clariden Bank
Crystal Park
Cystic Fibrosis Foundation
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇'▇▇▇▇▇▇
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▇▇ ▇▇▇▇▇
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Eastcastle Limited
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Irrevocable Trust
GE Healthcare Financial Services, SVP - Credit
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
Hiroyuki ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ (▇▇▇▇) ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ Mazsaroff
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Schedule C -2
▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Kirill Yakovlevsky
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ Irrevocable Trust
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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ML Investments LLC
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Oxford Venture Finance
Palladin Opportunity Fund LLC
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Schedule C -3
▇▇▇▇▇ ▇▇▇▇▇▇
Sajeda Khalifa
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Irrevocable Trust
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Sengal Selassie
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ and Company LLC
▇▇ ▇▇▇▇▇ Ventures I, L.P.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Wen-▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Yichun ▇▇▇▇▇
▇▇-▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
Schedule C -4
SCHEDULE D
[Specify each Issuer General Use Free Writing Prospectus.]
Schedule D -1
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(ii) The Company 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 the Purchase
Agreement.
(iii) The Company is duly qualified as a foreign corporation to transact
business, and is in good standing, in the Commonwealth of Massachusetts.
(iv) The authorized, issued and outstanding capital stock of the Company
as of September 30, 2005 is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except for subsequent
issuances, if any, pursuant to the Purchase Agreement or pursuant to
reservations, agreements or employee benefit plans referred to in the Prospectus
or pursuant to the conversion of convertible securities or exercise of options
referred to in the Prospectus); the shares of capital stock of the Company
outstanding immediately prior to the issuance of the Securities have been duly
authorized and validly issued and are fully paid and non-assessable; and none of
the outstanding shares of capital stock of the Company was issued in violation
of the preemptive rights of any securityholder of the Company arising under the
Delaware General Corporation Law or the Company's certificate of incorporation.
(v) The Securities have been duly authorized for issuance and sale to the
Underwriters pursuant to the Purchase Agreement and, when issued and delivered
by the Company pursuant to the Purchase Agreement against payment of the
consideration set forth in the Purchase Agreement, will be validly issued, fully
paid and non-assessable.
(vi) The issuance of the Securities is not subject to preemptive rights of
any securityholder of the Company arising under the Delaware General Corporation
Law, the Certificate of Incorporation, the By-laws or the agreements filed as
exhibits to the Registration Statement.
(vii) The Subsidiary has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the Commonwealth of
Massachusetts, and has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus;
except as otherwise disclosed in the Registration Statement, all of the issued
and outstanding capital stock of the Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, to our knowledge, is owned
by the Company, free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim; and none of the outstanding shares of capital stock of the
Subsidiary was issued in violation of the preemptive or similar rights of any
securityholder of the Subsidiary.
(viii) The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
A-1
(ix) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectus pursuant to Rule 424(b) has been made in the manner and within
the time period required by Rule 424(b) (without reliance on Rule 424(b)(8));
any required filing of each Issuer Free Writing Prospectus pursuant to Rule 433
has been made in the manner and within the time period required by Rule 433(d);
and, to our knowledge, 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 threatened by the Commission.
(x) The form of certificate used to evidence the Common Stock complies in
all material respects with all applicable requirements of Sections 151 and 158
of the Delaware General Corporation Law, with any applicable requirements of the
Certificate of Incorporation and By-laws of the Company, and with the
requirements of the Nasdaq National Market.
(xi) To our knowledge, there is not pending or threatened any action,
suit, proceeding, inquiry or investigation, including without limitation,
relating to the FDCA, the Public Health Services Act or any regulations of the
FDA, to which the Company or the Subsidiary is a party, or to which the property
of the Company or the Subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, that is required by the 1933
Act or the 1933 Act Regulations to be described in the Registration Statement or
Prospectus that is not so described.
(xii) The information in the Prospectus under "Business -- Facilities",
"Business -- Government Regulation and Product Approval", "Business -- Legal
Proceedings" and "Description of Capital Stock" and in the Registration
Statement under Item 14, to the extent that it constitutes matters of law,
summaries of legal matters, the Certificate of Incorporation, the By-laws or
legal proceedings, or legal conclusions, has been reviewed by us and is correct
in all material respects and fairly presents the information purported to be
described therein.
(xiii) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency (other than under the 1933 Act and the 1933 Act Regulations,
and the approval of the Common Stock for quotation on the Nasdaq National
Market, which have been obtained, or as may be required under the securities or
blue sky laws of the various states or foreign jurisdictions or under the rules
and regulations of the National Association of Securities Dealers applicable to
the Underwriters, as to which we express no opinion) is necessary or required in
connection with the due authorization, execution and delivery of the Purchase
Agreement or for the offering, issuance, sale or delivery of the Securities.
(xiv) The execution, delivery and performance of the Purchase Agreement
and the consummation of the transactions contemplated in the Purchase Agreement
and in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption "Use of Proceeds") and compliance
by the Company with its obligations under the Purchase Agreement do not and will
not, whether with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined in Section 1(a)(xii) of the Purchase Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or the Subsidiary pursuant to any contract, indenture,
mortgage, deed of trust, loan or credit agreement, note, lease or any other
agreement or instrument filed as an exhibit to the Registration Statement, nor
will such action
A-2
result in any violation of the provisions of the Certificate of Incorporation or
By-laws, or the charter or by-laws of the Subsidiary, or any applicable law,
statute, rule, or regulation, or any judgment, order, writ or decree naming the
Company, known to us, of any government, government instrumentality or court,
domestic or foreign, having jurisdiction over the Company or the Subsidiary or
any of their respective properties, assets or operations.
(xv) To our knowledge, there are no persons with registration rights or
other similar rights to have any securities registered pursuant to the
Registration Statement or, except pursuant to agreements filed as an exhibit to
the Registration Statement, otherwise registered by the Company under the ▇▇▇▇
▇▇▇.
(xvi) The Company is not required, 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 required, to register as an
"investment company" under the 1940 Act.
The Registration Statement, including any Rule 462(b) Registration
Statement and the Rule 430A Information, the Prospectus and each amendment or
supplement to the Registration Statement and Prospectus as of their respective
effective or issue dates (other than the financial statements, the notes thereto
and schedules and other financial data included therein or omitted therefrom, as
to which we make no statement) appear on their face to be appropriately
responsive in all material respects to the requirements of the 1933 Act and the
1933 Act Regulations.
Nothing has come to our attention that has caused us to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information, (except for financial statements, the notes thereto and schedules
and other financial data included therein or omitted therefrom, as to which we
make no statement), at the time such Registration Statement or any such
amendment became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading or that the Prospectus or any
amendment or supplement thereto (except for financial statements, the notes
thereto, and schedules and other financial data included therein or omitted
therefrom, as to which we make no statement), at the time the Prospectus was
issued, at the time any such amended or supplemented prospectus was issued or at
the Closing Time, included or includes an untrue statement of a material fact or
omitted or omits 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. In addition, nothing has come to our attention that has
caused us to believe that the General Disclosure Package other than the
financial statements and schedules and other financial data included therein or
omitted therefrom, as to which we need make no statement, as of the Applicable
Time, contained any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in the light
of circumstances under which they were made, not misleading. With respect to
statements contained in the General Disclosure Package, any statement contained
in any of the constituent documents shall be deemed to be modified or
superseded to the extent that any information contained in subsequent
constituent documents modifies or replaces such statement. We are not aware of
any contract or other document of a character required by the 1933 Act and the
1933 Act Regulations to be filed as an exhibit to the Registration Statement
that is not so filed.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
A-3
Exhibit B
FORM OF OPINION OF COMPANY'S SPECIAL PATENT COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
- , 2006
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, and
▇▇ ▇▇▇▇▇ & Co., LLC
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Opinion of Patent Counsel to Altus Pharmaceuticals, Inc.
Ladies and Gentlemen:
We are one of several patent counsel to Altus Pharmaceuticals Inc., a
Delaware corporation (the "Company"). As one of the Company's patent counsel, we
are familiar only with those patent and other intellectual property matters that
the Company refers to us ("our Representation"). These matters include the
drafting and prosecution of various of the Company's patent applications listed
in Exhibit A hereto ("Patent Applications" and after grant "Patents") and
advising the Company in connection with various other intellectual property
matters, including without limitation certain freedom to operate analyses with
respect to United States patent rights and prior art searching with respect to
European patent rights. The Company has advised us that we are its primary
United States patent counsel.
This opinion is being furnished to you in connection with the Purchase
Agreement dated -, 2006 (the "Purchase Agreement") between ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇
▇▇▇▇▇ & Co., LLC (collectively the "Underwriters") and the Company. This opinion
is provided to you pursuant to Section 5(c) of the Purchase Agreement and is
being rendered to you at the request of the Company. Capitalized terms used
without definition herein shall have the meaning given to such terms in the
Purchase Agreement.
In our capacity as patent counsel to the Company and in the course of our
Representation, we have reviewed the following sections (the "Sections") under
the captions "RISK FACTORS - Risks Related to Our Intellectual Property" and
"BUSINESS - Intellectual Property" in the Registration Statement and the
included Prospectus:
B-1
RISK FACTORS
RISKS RELATED TO OUR INTELLECTUAL PROPERTY
IF THE COMBINATION OF PATENTS, TRADE SECRETS AND CONTRACTUAL PROVISIONS
THAT WE RELY ON TO PROTECT OUR INTELLECTUAL PROPERTY IS INADEQUATE, OUR
ABILITY TO SUCCESSFULLY COMMERCIALIZE OUR PRODUCT CANDIDATES WILL BE
HARMED AND WE MAY NOT BE ABLE TO OPERATE OUR BUSINESS PROFITABLY.
Paragraph 1.
Paragraph 2.
Paragraph 3.
Paragraph 4.
IF THIRD PARTIES SUCCESSFULLY ASSERT THAT WE HAVE INFRINGED THEIR PATENTS
AND PROPRIETARY RIGHTS OR CHALLENGE THE VALIDITY OF OUR PATENTS AND
PROPRIETARY RIGHTS, WE MAY BECOME INVOLVED IN INTELLECTUAL PROPERTY
DISPUTES AND LITIGATION THAT WOULD BE COSTLY, TIME CONSUMING, AND DELAY OR
PREVENT THE DEVELOPMENT OR COMMERCIALIZATION OF OUR PRODUCT CANDIDATES.
Paragraph 1.
Paragraph 2, except sentences 2, 4, 5 and 6.
Paragraph 3.
Paragraph 4, except sentences 5, 6, 7 and 8.
Paragraph 5.
Paragraph 6, except sentences 5 and 7.
BUSINESS
INTELLECTUAL PROPERTY
Paragraph 1, except sentences 3 and 4.
Paragraph 2.
Paragraph 3.
Paragraph 4.
Paragraph 5.
Paragraph 6.
Paragraph 9.
Paragraph 10.
Paragraph 11.
Specifically, we are of the opinion as to the Patents and Patent Applications
that:
(i) Except as disclosed in the Registration Statement and Prospectus, to
our actual knowledge, no other person or entity has asserted any
ownership rights in any of the Patents or Patent Applications. In
addition, we have filed and recorded, or are preparing to file and
to record, in the United States Patent and Trademark Office, in each
of the Patent Applications and Patents, Assignments, provided to us
by the Company, in which the named inventors of the
B-2
Patent Applications and Patents assigned their rights in those
Patent Applications and Patents to the Company.
(ii) We have properly filed and prosecuted, or are so prosecuting, each
Patent Application and Patent.
(iii) We have complied and are continuing to comply on an ongoing basis
with the required duty of candor and good faith in dealing with the
United States Patent and Trademark Office ("Patent Office"),
including the duty to disclose to the Patent Office all information
actually known by us to be material to the patentability of each
Patent Application and Patent.
We call your attention to the fact that our Representation is limited to
those patent and other intellectual property matters specifically referred to us
by the Company. We have reviewed the Sections and have participated in
discussions regarding the Sections and the Company's patent position with
representatives of the Company and its disclosure counsel, your representatives
and representatives of your counsel. Because our Representation does not extend
to the requirements of the federal securities laws applicable to the Sections,
we have relied upon input from the Company and its disclosure counsel in
assessing materiality. On the basis of the information that we have gained in
the course of our Representation and our participation in the discussions
referred to above, we do not know of any action, proceeding or litigation
relating to the Patents and Patent Applications or patent rights of others that
is pending or threatened against the Company or any of its Subsidiaries before
any court, governmental or administrative agency or body or a claim relating to
those Patents and Patent Applications or patent rights of others that is
required by the Securities Act or the rules and regulations of the Commission
thereunder to be described in the Registration Statement or the Prospectus that
is not so described. Further, based on and subject to the foregoing, nothing
that has come to our attention has caused us to believe that (a) as of the
effective date of the Registration Statement, the Sections contained any untrue
statement of a material fact or omitted to state any material fact necessary to
make the statements in the Sections not misleading or (b) as of the date of the
Prospectus or as of the date hereof, the Sections contained or contain any
untrue statement of a material fact or omitted or omit to state any material
fact necessary in order to make the statements in the Sections, in the light of
the circumstances under which they were made, not misleading. We express no
belief with respect to any other portion of the Registration Statement or the
Prospectus.
The limitations inherent in the independent verification of factual
matters and the nature of the determination involved in our review are such that
we do not assume any responsibility for the accuracy, completeness or fairness
of the statements made or the information contained in or omitted from the
Sections (or any other portion of the Registration Statement or Prospectus)
except for the statements made in the Sections that constitute summaries of law,
documents or legal proceedings, which, in our opinion, accurately summarize in
all material respects the provisions of the laws, documents and proceedings
referred to therein, provided that for this purpose, our opinion with respect to
the third paragraph under the caption "RISK FACTORS - Risks Related to Our
Intellectual Property - If third parties successfully assert that we have
infringed their patents and proprietary rights or challenge the validity of our
patents and proprietary rights, we may become involved in intellectual property
disputes and litigation that would be costly, time consuming, and delay or
prevent the development or commercialization of our product candidates," relates
only to United States Patent No. 6,894,023.
B-3
This opinion is furnished by us to you as Representatives of the several
Underwriters and, except as otherwise expressly consented to by us in writing,
is solely for the benefit of the several Underwriters.
Very truly yours,
FISH & NEAVE IP GROUP
ROPES & ▇▇▇▇ LLP
B-4
Exhibit C-1
FORM OF OPINION OF COMPANY'S EUROPEAN SPECIAL PATENT COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(d)
- , 2006
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, and
▇▇ ▇▇▇▇▇ & Co., LLC
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Opinion of European Special Patent Counsel to Altus Pharmaceuticals
Inc.
Ladies and Gentlemen:
We act as special European and German patent counsel to Altus
Pharmaceuticals Inc., a Delaware corporation (the "Company"). As special
European and German patent counsel to the Company, we are familiar only with
those patent and other intellectual property matters that the Company or Ropes &
▇▇▇▇ LLP ("Ropes & ▇▇▇▇"), the Company's patent counsel, on behalf of the
Company, refers to us (our "Representation"). The Company has advised us that we
are its primary counsel in the European Patent Office and in Germany.
Our Representation of the Company includes acting as the Company's
representative in the European Patent Office ("EPO") in connection with the
European patents and patent applications, owned by the Company and described in
the Prospectus or listed on Schedule A hereto (collectively, the "Company Owned
European Patents"), co-owned by the Company and described in the Prospectus or
listed on Schedule B hereto (collectively, the "Company Co-Owned European
Patents" and, together with the Company Owned Patents, the "Company European
Patents"), and licensed by the Company and described in the Prospectus or listed
on Schedule C hereto (together with the Company Patents, the "European Patent
Rights"). We also act as the Company's representative in the German Patent
Office in connection with the Germany national phases of the granted European
Patent Rights ("the German Patent Rights"). Finally, at the request of the
Company and Ropes & ▇▇▇▇, on behalf of the Company, we have considered German
patent D 691 03 755, the German national phase of European patent EP-B 0 540 582
(the "582 Patent"). In this connection, we have considered the prosecution of
the 582 Patent before the European Patent Office, scientific publications called
to our attention by Ropes & ▇▇▇▇ or the Company or selected by us from various
searches of the art, and a description of the Company's product ALTU-238 and its
manufacturing process as provided to us by the Company.
C-1
This opinion is being furnished in connection with the Purchase Agreement
dated -, 2006 (the "Purchase Agreement") between ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇ ▇▇▇▇▇ & Co., LLC
(collectively the "Underwriters") and the Company. This opinion is provided to
you pursuant to Section 5(d) of the Purchase Agreement and is being rendered to
you at the request of the Company. Capitalized terms used without definition
herein shall have the meaning given to such terms in the Purchase Agreement.
In our capacity as European and German patent counsel to the Company, as
described above, and in the course of our Representation, we have reviewed the
following Sections under the captions "RISK FACTORS - Risks Related to Our
Intellectual Property", "BUSINESS - Intellectual Property" and "BUSINESS -
Collaborations - ▇▇. ▇▇▇▇ Pharma GmBH" in the Registration Statement and the
Prospectus ("the Sections"):
RISK FACTORS
RISKS RELATED TO OUR INTELLECTUAL PROPERTY
IF THE COMBINATION OF PATENTS, TRADE SECRETS AND CONTRACTUAL PROVISIONS
THAT WE RELY ON TO PROTECT OUR INTELLECTUAL PROPERTY IS INADEQUATE, OUR
ABILITY TO SUCCESSFULLY COMMERCIALIZE OUR PRODUCT CANDIDATES WILL BE
HARMED AND WE MAY NOT BE ABLE TO OPERATE OUR BUSINESS PROFITABLY.
Paragraph 1, except sentence 1.
Paragraph 2.
Paragraph 3.
Paragraph 4.
IF THIRD PARTIES SUCCESSFULLY ASSERT THAT WE HAVE INFRINGED THEIR PATENTS
AND PROPRIETARY RIGHTS OR CHALLENGE THE VALIDITY OF OUR PATENTS AND
PROPRIETARY RIGHTS, WE MAY BECOME INVOLVED IN INTELLECTUAL PROPERTY
DISPUTES AND LITIGATION THAT WOULD BE COSTLY, TIME CONSUMING, AND DELAY OR
PREVENT THE DEVELOPMENT OR COMMERCIALIZATION OF OUR PRODUCT CANDIDATES.
Paragraph 1.
Paragraph 3.
Paragraph 4, except sentences 2, 3, 5, 6, 7 and 8.
Paragraph 5.
Paragraph 6, except sentences 5 and 7.
BUSINESS
INTELLECTUAL PROPERTY
Paragraph 1, except sentences 3 and 4.
Paragraph 2.
Paragraph 3.
Paragraph 4, as it applies to the European Patent Rights.
Paragraph 5, as it applies to the European Patent Rights.
Paragraph 6, as it applies to the European Patent Rights.
Paragraph 9, except sentence 2.
C-2
Paragraph 10.
Paragraph 11.
COLLABORATIONS - ▇▇. ▇▇▇▇ Pharma GmBH
Paragraph 6, sentence 2.
For purposes of our opinion with respect to the second sentence of the
sixth paragraph under the caption "BUSINESS - Collaborations - ▇▇. ▇▇▇▇ Pharma
GmBH", we have been advised by the Company that the European current patents and
the pending patent applications relating to ALTU-135 that are relevant to the
Company's development, commercialization and marketing agreement with ▇▇. ▇▇▇▇
are the European Patent Rights referred to in the last sentence of the fourth
paragraph under the caption "BUSINESS - Intellectual Property".
We are of the opinion that each of the European Patent Rights and German
Patent Rights have been properly filed and prosecuted, or are being properly
prosecuted.
We call your attention to the fact that our Representation is limited to
those patent and other intellectual property matters specifically referred to us
by the Company or by Ropes & ▇▇▇▇ on behalf of the Company. We have reviewed the
Sections and have participated in discussions regarding the Sections and the
Company's patent position in the European Patent Office and in Germany with
representatives of the Company and its disclosure counsel (Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C.), and your representatives and a representative
of your counsel (▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP). Because our
Representation does not extend to the requirements of the United States federal
securities laws applicable to the Sections, we have relied upon input from the
Company and its disclosure counsel in assessing materiality. On the basis of the
information that we have gained in the course of our Representation and our
participation in the discussions referred to above, we do not know of any
action, proceeding or litigation relating to the European Patent Rights or
patent rights of others that is pending or threatened against the Company or any
of its Subsidiaries before any court, governmental or administrative agency or
body or a claim that is required by the Securities Act or the rules and
regulations of the Commission thereunder to be described in the Registration
Statement or the Prospectus that is not so described. Further, based on and
subject to the foregoing, nothing has come to our attention that has caused us
to believe that (a) as of the effective date of the Registration Statement, the
Sections contained any untrue statement of a material fact or omitted to state
any material fact necessary to make the statements in the Sections not
misleading or (b) as of the date of the Prospectus or as of the date hereof, the
Sections contained or contain any untrue statement of a material fact or omitted
or omit to state any material fact necessary in order to make the statements in
the Sections, in the light of the circumstances under which they were made, not
misleading. We express no belief with respect to any other portion of the
Registration Statement or the Prospectus.
The limitations inherent in the independent verification of factual
matters and the nature of the determination involved in our review are such that
we do not assume any responsibility for the accuracy, completeness or fairness
of the statements made or the information contained in or omitted from the
Sections (or any other portion of the Registration Statement or Prospectus),
except for the statements made in the Sections that constitute summaries of law,
documents or legal proceedings, which, in our opinion, accurately summarize in
all material respects the provisions of the laws, documents and proceedings
referred to therein, provided that for this purpose, our opinion with respect to
the third paragraph under the caption "RISK FACTORS - Risks Related to Our
Intellectual Property - If third parties successfully assert that we have
infringed their patents and proprietary rights or challenge the
C-3
validity of our patents and proprietary rights, we may become involved in
intellectual property disputes and litigation that would be costly, time
consuming, and delay or prevent the development or commercialization of our
product candidates." relates only to German patent D 691 03 755 and the 582
Patent.
This opinion is furnished by us to you as Representatives of the several
Underwriters and, except as otherwise expressly consented to by us in writing,
is solely for the benefit of the several Underwriters.
Very truly yours,
VOSSIUS & PARTNER
C-4
Exhibit C-2
FORM OF OPINION OF COMPANY'S EUROPEAN SPECIAL PATENT COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(d)
- , 2006
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, and
▇▇ ▇▇▇▇▇ & Co., LLC
as Representatives of the several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Opinion of European Special Patent Counsel to Altus Pharmaceuticals Inc.
Ladies and Gentlemen:
We act as special European and German patent counsel to Altus
Pharmaceuticals Inc., a Delaware corporation (the "Company"), solely in regard
to consideration of European patents EP 506,791 B1, EP 592,478 B1 and EP 600,868
B1 and particularly their Germany national phase counterparts (collectively, the
"Patents") ("our Representation").
This opinion is being furnished to you in connection with the Purchase
Agreement dated -, 2006 (the "Purchase Agreement") between ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇
▇▇▇▇▇ & Co., LLC (collectively the "Underwriters") and the Company. This opinion
is provided to you pursuant to Section 5(d) of the Purchase Agreement and is
being rendered to you at the request of the Company. Capitalized terms used
without definition herein shall have the meaning given to such terms in the
Purchase Agreement.
As special European and German patent counsel and as requested by Ropes &
▇▇▇▇ LLP ("Ropes & ▇▇▇▇"), the Company's patent counsel, on behalf of the
Company, and by the Company, we have reviewed the Patents and their prosecution
files in the European Patent Office. We have also considered in connection with
the Patents certain scientific articles and patent publications provided to us
by Ropes & ▇▇▇▇ and the Company. We have not conducted our own art searches and
we have not relied on or sought opinions of technical experts. We have been
advised by the Company that the Patents are the only European patents that may
be relevant to the Company's development and commercialization of ALTU-135.
C -11
Based on our Representation and solely with respect to matters of German
patent law and European Patent Office practice, we have reviewed the first,
second and third sentences in the second paragraph under the caption "RISK
FACTORS - RISKS RELATED TO OUR INTELLECTUAL PROPERTY -- IF THIRD PARTIES
SUCCESSFULLY ASSERT THAT WE HAVE INFRINGED THEIR PATENTS AND PROPRIETARY RIGHTS
OR CHALLENGE THE VALIDITY OF OUR PATENTS AND PROPRIETARY RIGHTS, WE MAY BECOME
INVOLVED IN INTELLECTUAL PROPERTY DISPUTES AND LITIGATION THAT WOULD BE COSTLY,
TIME CONSUMING, AND DELAY OR PREVENT THE DEVELOPMENT OR COMMERCIALIZATION OF OUR
PRODUCT CANDIDATES." in the Registration Statement and the Prospectus (the
"Sentences").
We call your attention to the fact that our Representation is limited to
those matters referred to above. We have reviewed the Sentences and have
participated in discussions regarding the Sentences with representatives of the
Company and its disclosure counsel (Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C. ("Mintz, ▇▇▇▇▇")) and its patent counsel (Ropes & ▇▇▇▇). We have
also had discussions with the Company, Ropes & ▇▇▇▇ and Mintz, ▇▇▇▇▇ directed to
our specific work in the context of the Patents.
Because our Representation does not extend to the requirements of the
United States federal securities laws applicable to the Sentences, we have
relied upon input from the Company and its disclosure counsel in assessing
materiality.
Based on and subject to the foregoing, nothing has come to our attention
that has caused us to believe that (a) as of the effective date of the
Registration Statement, the Sentences contained any untrue statement of a
material fact or omitted to state any material fact necessary to make the
statements in the Sentences not misleading, or (b) as of the date of the
Prospectus or as of the date hereof, the Sentences contained or contain any
untrue statement of a material fact or omitted or omit to state any material
fact necessary in order to make the statements in the Sentences, in the light of
the circumstances under which they were made, not misleading. We express no
belief with respect to any other portion of the Registration Statement or the
Prospectus.
The limitations inherent in the independent verification of factual
matters and the nature of the determination involved in our review are such that
we do not assume any responsibility for the accuracy, completeness or fairness
of the statements made or the information contained in or omitted from the
Sentences (or any other portion of the Registration Statement or Prospectus)
except for the statements made in the Sentences that constitute summaries of
law, documents or legal proceedings, which, in our opinion, accurately summarize
in all material respects the provisions of the laws, documents and proceedings
referred to therein.
This opinion is furnished by us to you as Representatives of the several
Underwriters and, except as otherwise expressly consented to by us in writing,
is solely for the benefit of the several Underwriters.
Very truly yours,
UEXKULL & ▇▇▇▇▇▇▇▇
C -12
Exhibit D
September -, 2005
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, and
▇▇ ▇▇▇▇▇ & Co., LLC,
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Proposed Public Offering by Altus Pharmaceuticals Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of Altus
Pharmaceuticals Inc., a Delaware corporation (the "Company"), understands that
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇"), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇ ▇▇▇▇▇ & Co., LLC
propose to enter into a Purchase Agreement (the "Purchase Agreement") with the
Company providing for the public offering (the "Public Offering") of shares (the
"Securities") of the Company's common stock, par value $.01 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 180
days from the date of the Purchase Agreement, the undersigned will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, 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, or cause to be filed, any registration statement under the
Securities Act of 1933, as amended, with respect to any of the foregoing
(collectively, the "Lock-Up Securities") 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 Lock-Up Securities,
whether any such swap or transaction is to be settled by delivery of Common
Stock or other securities, in cash or otherwise.
Notwithstanding the foregoing, and subject to the conditions below, the
undersigned may transfer the Lock-Up Securities in the transactions described in
clauses (i) through (vi) below without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇, provided that (1) ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇
▇▇▇▇▇ & Co., LLC receive a signed lock-up agreement for the balance of the
lock-up period from each donee, trustee, distributee, or transferee, as the case
may be, (2) any such transfer shall not involve a disposition for value, (3)
such transfers are not required to be reported in any public report or
D -1
filing with the Securities and Exchange Commission, or otherwise during the
lock-up period and (4) the undersigned does not otherwise voluntarily effect any
public filing or report regarding such transfers during the lock-up period:
(i) as a bona fide gift or gifts; or
(ii) to any trust for the direct or indirect benefit of the undersigned
or the immediate family of the undersigned; or
(iii) as a distribution to members, partners or stockholders of the
undersigned;
(iv) to the undersigned's affiliates or to any investment fund or other
entity controlled or managed by the undersigned;
(v) to any beneficiary of the undersigned pursuant to a will or other
testamentary document or applicable laws of descent; or
(vi) to any corporation, partnership, limited liability company or other
entity all of the beneficial ownership interests of which are held
by the undersigned or immediate family of the undersigned.
For purposes of this lock-up agreement, "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
Furthermore, notwithstanding the foregoing, during the lock-up period, the
undersigned may sell shares of Common Stock of the Company purchased by the
undersigned on the open market following the Public Offering if and only if (i)
such sales are not required to be reported in any public report or filing with
the Securities Exchange Commission, or otherwise and (ii) the undersigned does
not otherwise voluntarily effect any public filing or report regarding such
sales.
The undersigned further agrees that, prior to engaging in any transaction
or taking any other action that is subject to the terms of this lock-up
agreement during the lock-up period, it will give notice thereof to the Company
and will not consummate such transaction or take any such action unless it has
received written confirmation from the Company that the 180 day lock-up period
has expired.
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 Lock-Up Securities except in compliance with the foregoing
restrictions.
In addition, the undersigned hereby waives any and all notice requirements
and rights with respect to registration of securities pursuant to any agreement,
understanding or otherwise setting forth the terms of any security of the
Company held by the undersigned, including any registration rights agreement to
which the undersigned and the Company may be party, provided that such waiver
shall apply only to the proposed Public Offering, and any other action taken by
the Company in connection with the proposed Public Offering. The undersigned
further agrees that, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, the
undersigned will not, prior to the expiration of the lock-up period, make any
demand for or exercise any right with respect to, the registration of any
security of the Company, and hereby waives any and all rights the undersigned
may have to require the Company to include securities in the registration
statement filed by the Company with respect to the Public Offering and to
receive notice of the filing of such registration statement or the Public
Offering. The undersigned hereby agrees that, to the extent that the terms of
this lock-up agreement conflict with or are in any way inconsistent
D -2
with any registration rights agreement to which the undersigned and the Company
may be a party, this lock-up agreement supersedes such registration rights
agreement.
This lock-up agreement shall automatically terminate upon the earliest of
(i) June 30, 2006, if the Public Offering is not consummated by such date and
(ii) the termination of the Purchase Agreement, if the Purchase Agreement is
terminated prior to the Closing Date (as such term is defined in the Purchase
Agreement) in accordance with its terms, and (iii) either ▇▇▇▇▇▇▇ ▇▇▇▇▇, on the
one hand, or the Company, on the other hand, advising the other, prior to the
execution of the Purchase Agreement, that it has determined not to proceed with
the Public Offering.
Very truly yours,
Signature: ______________________________
Print Name: _____________________________
D -3