IDENIX PHARMACEUTICALS, INC. 18,310,000 Shares of Common Stock Underwriting Agreement
Exhibit 1.1
Execution Version
IDENIX PHARMACEUTICALS, INC.
18,310,000 Shares of Common Stock
April 8, 2011
▇.▇. ▇▇▇▇▇▇ Securities LLC
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Ladies and Gentlemen:
Idenix Pharmaceuticals, Inc., a Delaware corporation (the “Company”), proposes to issue and
sell to you (the “Underwriter”), an aggregate of 18,310,000 shares of Common Stock, par value
$0.001 per share, of the Company (the “Underwritten Shares”) and, at the option of the Underwriter,
up to an additional 2,746,500 shares of Common Stock of the Company (the “Option Shares”). The
Underwritten Shares and the Option Shares are herein referred to as the “Shares”. The shares of
Common Stock of the Company to be outstanding after giving effect to the sale of the Shares are
referred to herein as the “Stock”.
Concurrently with the purchase and sale of the Shares, the Company has agreed to sell to
Novartis Pharma AG (“Novartis”) and Novartis has agreed to purchase from the Company at the Closing
Date (as defined in Section 2 hereof) 1,785,714 shares of Common Stock (the “Novartis Shares”)
pursuant to the Concurrent Private Placement Stock Purchase Agreement, dated the date hereof,
between Novartis and the Company (the “Novartis Purchase Agreement”, and collectively with this
Agreement, the “Transaction Agreements”).
The Company hereby confirms its agreement with the Underwriter concerning the purchase and
sale of the Shares, as follows:
1. Registration Statement. The Company has prepared and filed with the Securities and
Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules
and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration
statement (File No. 333-153471), including a prospectus, relating to the Shares. Such registration
statement, as amended at the time it became effective, including the information, if any, deemed
pursuant to Rule 430A, 430B or 430C under the Securities Act to be part of the registration
statement at the time of its effectiveness (“Rule 430 Information”), is referred to herein as the
“Registration Statement”; and as used herein, the term “Preliminary Prospectus” means each
prospectus included in such registration statement (and any amendments thereto) before
effectiveness, any prospectus filed with the Commission pursuant to Rule 424(a) under the
Securities Act and the prospectus included in the Registration Statement at the time of its
effectiveness that omits Rule 430 Information, and the term “Prospectus” means the prospectus in
the form first used (or made available upon request of purchasers pursuant to Rule 173 under the
Securities Act) in connection with confirmation of sales of the Shares. If the Company has filed
an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule
462 Registration Statement”), then any reference herein to the term “Registration Statement” shall
be deemed
to include such Rule 462 Registration Statement. Any reference in this Agreement to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Securities Act, as of the effective date of the Registration Statement or the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and any reference to “amend”,
“amendment” or “supplement” with respect to the Registration Statement, any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any documents filed after such date under
the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission
thereunder (collectively, the “Exchange Act”) that are deemed to be incorporated by reference
therein. Capitalized terms used but not defined herein shall have the meanings given to such terms
in the Registration Statement and the Prospectus.
At or prior to the Applicable Time (as defined below), the Company had prepared the following
information (collectively with the pricing information set forth on Annex B, the “Pricing
Disclosure Package”): a Preliminary Prospectus dated April, 7, 2011 and each “free-writing
prospectus” (as defined pursuant to Rule 405 under the Securities Act) listed on Annex B hereto.
“Applicable Time” means 8:30 A.M., New York City time, on April 8, 2011.
2. Purchase of the Shares by the Underwriter.
(a) The Company agrees to issue and sell the Underwritten Shares to the Underwriter as
provided in this Agreement, and the Underwriter, on the basis of the representations, warranties
and agreements set forth herein and subject to the conditions set forth herein, agrees to purchase
from the Company the Underwritten Shares at a price per share (the “Purchase Price”) of $2.632.
In addition, the Company agrees to issue and sell the Option Shares to the Underwriter as
provided in this Agreement, and the Underwriter, on the basis of the representations, warranties
and agreements set forth herein and subject to the conditions set forth herein, shall have the
option to purchase from the Company the Option Shares at the Purchase Price less an amount per
share equal to any dividends or distributions declared by the Company and payable on the
Underwritten Shares but not payable on the Option Shares.
The Underwriter may exercise the option to purchase Option Shares at any time in whole, or
from time to time in part, on or before the thirtieth day following the date of the Prospectus, by
written notice from the Underwriter to the Company. Such notice shall set forth the aggregate
number of Option Shares as to which the option is being exercised and the date and time when the
Option Shares are to be delivered and paid for, which may be the same date and time as the Closing
Date (as hereinafter defined) but shall not be earlier than the Closing Date or later than the
tenth full business day (as hereinafter defined) after the date of such notice (unless such time
and date are postponed in accordance with the provisions of Section 10 hereof). Any such notice
shall be given at least two business days prior to the date and time of delivery specified therein.
(b) The Company understands that the Underwriter intends to make a public offering of the
Shares as soon after the effectiveness of this Agreement as in the judgment of the Underwriter is
advisable, and initially to offer the Shares on the terms set forth in the Prospectus. The Company
acknowledges and agrees that the Underwriter may offer and sell Shares to or through any affiliate
of an Underwriter.
(c) Payment for the Shares shall be made by wire transfer in immediately available funds to
the account specified by the Company to the Underwriter in the case of the Underwritten Shares, at
the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, at
10:00
A.M., New York City time, on April 13, 2011, or at such other time or place on the same or
such other date, not later than the fifth business day thereafter, as the Underwriter and the
Company may agree upon in writing or, in the case of the Option Shares, on the date and at the time
and place specified by the Underwriter in the written notice of the Underwriter’s election to
purchase such Option Shares. The time and date of such payment for the Underwritten Shares is
referred to herein as the “Closing Date”, and the time and date for such payment for the Option
Shares, if other than the Closing Date, is herein referred to as the “Additional Closing Date”.
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Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as
the case may be, shall be made against delivery to the Underwriter of the Shares to be purchased on
such date or the Additional Closing Date, as the case may be, with any transfer taxes payable in
connection with the sale of such Shares duly paid by the Company. Delivery of the Shares shall be
made through the facilities of The Depository Trust Company (“DTC”) unless the Underwriter shall
otherwise instruct.
(d) The Company acknowledges and agrees that the Underwriter is acting solely in the capacity
of an arm’s-length contractual counterparty to the Company with respect to the offering of Shares
contemplated hereby (including in connection with determining the terms of the offering) and not as
a financial advisor or a fiduciary to, or an agent of, the Company or any other person.
Additionally, the Underwriter is not advising the Company or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction. The Company shall consult with
its own advisors concerning such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby, and the Underwriter shall have
no responsibility or liability to the Company with respect thereto. Any review by the Underwriter
of the Company, the transactions contemplated hereby or other matters relating to such transactions
will be performed solely for the benefit of the Underwriter and shall not be on behalf of the
Company.
3. Representations and Warranties of the Company.
(a) The Company represents and warrants to the Underwriter that:
(i) Preliminary Prospectus. No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus included in the
Pricing Disclosure Package, at the time of filing thereof, complied in all material respects with
the Securities Act, and no Preliminary Prospectus, at the time of filing thereof, contained any
untrue statement of a material fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation and warranty with respect to
any statements or omissions made in reliance upon and in conformity with information relating to
the Underwriter furnished to the Company in writing by the Underwriter expressly for use in any
Preliminary Prospectus, it being understood and agreed that the only such information furnished by
the Underwriter consists of the information described as such in Section 7(b) hereof.
(ii) Pricing Disclosure Package. The Pricing Disclosure Package as of the Applicable Time did
not, and as of the Closing Date and as of the Additional Closing Date, as the case may be, will
not, contain any untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided that the Company makes no representation and warranty with respect
to any statements or omissions made in reliance upon and in conformity with information relating to
the Underwriter furnished to the Company in writing by the Underwriter expressly for use in such
Pricing Disclosure Package, it being understood and agreed that the only such information furnished
by the Underwriter consists of the information described as such in Section 7(b) hereof.
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(iii) Issuer Free Writing Prospectus. Other than the Registration Statement, the Preliminary
Prospectus and the Prospectus, the Company (including its agents and representatives, other than
the Underwriter in their capacity as such) has not prepared, used, authorized, approved or referred
to and will not prepare, use, authorize, approve or refer to any “written communication” (as
defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of
an offer to buy the Shares (each such communication by the Company or its agents and
representatives (other than a communication referred to in clause (i) below) an “Issuer Free
Writing Prospectus”) other than (i) any document not constituting a prospectus pursuant to Section
2(a)(10)(a) of the Securities Act or Rule 134 under the Securities Act or (ii) the documents listed
on Annex B hereto, each electronic road show and any other written communications approved in
writing in advance by the Representative. Each such Issuer Free Writing Prospectus complied in all
material respects with the Securities Act, has been or will be (within the time period specified in
Rule 433) filed in accordance with the Securities Act (to the extent required thereby) and, when
taken together with the Preliminary Prospectus filed prior to the first use of such Issuer Free
Writing Prospectus, did not, and as of the Closing Date and as of the Additional Closing Date, as
the case may be, will not, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in each such Issuer
Free Writing Prospectus or Preliminary Prospectus in reliance upon and in conformity with
information relating to the Underwriter furnished to the Company in writing by the Underwriter
expressly for use in such Issuer Free Writing Prospectus or Preliminary Prospectus, it being
understood and agreed that the only such information furnished by the Underwriter consists of the
information described as such in Section 7(b) hereof.
(iv) Registration Statement and Prospectus. The Registration Statement has been declared
effective by the Commission and was filed with the Commission not earlier than three years prior to
the date hereof; and no notice of objection of the Commission to the use of such registration
statement or any post-effective amendment thereto pursuant to Rule 401(g)(2) under the Securities
Act has been received by the Company. No order suspending the effectiveness of the Registration
Statement has been issued by the Commission, and no proceeding for that purpose or pursuant to
Section 8A of the Securities Act against the Company or related to the offering of the Shares has
been initiated or threatened by the Commission; as of the applicable effective date of the
Registration Statement and any post-effective amendment thereto, the Registration Statement and any
such post-effective amendment complied and will comply in all material respects with the Securities
Act, and did not and will not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the statements therein
not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as
of the Closing Date and as of the Additional Closing Date, as the case may be, the Prospectus will
not contain any untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading; provided that the Company makes no representation and warranty with respect
to any statements or omissions made in reliance upon and in conformity with information relating to
the Underwriter furnished to the Company in writing by the Underwriter expressly for use in the
Registration Statement and the Prospectus and any amendment or supplement thereto, it being
understood and agreed that the only such information furnished by the Underwriter consists of the
information described as such in Section 7(b) hereof.
(v) Incorporated Documents. The documents incorporated by reference in the Registration
Statement, the Prospectus and the Pricing Disclosure Package, when they were filed with the
Commission, conformed in all material respects to the requirements of the Exchange Act, and none of
such documents contained any untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading; and any further documents so filed and incorporated by reference in the
Registration Statement, the Prospectus or the Pricing Disclosure Package, when such documents are filed with the
Commission, will conform in all material respects to the requirements of the Exchange Act and will
not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they were made, not
misleading.
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(vi) Stock Options. With respect to the stock options (the “Stock Options”) granted pursuant
to the stock-based compensation plans of the Company and its subsidiaries (the “Company Stock
Plans”), except as would not reasonably be expected to result in a Material Adverse Effect, (i)
each grant of a Stock Option was duly authorized no later than the date on which the grant of such
Stock Option was by its terms to be effective (the “Grant Date”) by all necessary corporate action,
including, as applicable, approval by the board of directors of the Company (or a duly constituted
and authorized committee thereof) and any required stockholder approval by the necessary number of
votes or written consents, and the award agreement governing such grant (if any) was duly executed
and delivered by the Company, (ii) each such grant was made in accordance with the terms of the
Company Stock Plans, the Exchange Act and all other applicable laws and regulatory rules or
requirements, including the rules of the Nasdaq Global Market and any other exchange on which
Company securities are traded, and (iii) each such grant was properly accounted for in accordance
with GAAP in the financial statements (including the related notes) of the Company and disclosed in
the Company’s filings with the Commission in accordance with the Exchange Act and all other
applicable laws. The Company has not knowingly granted, and there is no and has been no policy or
practice of the Company of granting, Stock Options prior to, or otherwise coordinating the grant of
Stock Options with, the release or other public announcement of material information regarding the
Company or its subsidiaries or their results of operations or prospects.
(vii) No Consents Required. No consent, approval, authorization, order, license, registration
or qualification of or with any court or arbitrator or governmental or regulatory authority is
required for the execution, delivery and performance by the Company of the Transaction Agreements,
the issuance and sale of the Shares and the consummation of the transactions contemplated by each
of the Transaction Agreements, except for the registration of the Shares under the Securities Act
and such consents, approvals, authorizations, orders and registrations or qualifications as may be
required by the Financial Industry Regulatory Authority, Inc. (“FINRA”) and under applicable state
securities laws in connection with the purchase and distribution of the Shares by the Underwriter.
(viii) Independent Accountants. PricewaterhouseCoopers LLP, who have audited certain
financial statements of the Company and its subsidiaries is an independent registered public
accounting firm with respect to the Company and its subsidiaries within the applicable rules and
regulations adopted by the Commission and the Public Company Accounting Oversight Board (United
States) and as required by the Securities Act.
(ix) No Undisclosed Relationships. No relationship, direct or indirect, exists between or
among the Company or any of its subsidiaries, on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of its subsidiaries, on the other, that
is required by the Securities Act to be described in the Registration Statement and the Prospectus
and that is not so described in such documents and in the Pricing Disclosure Package.
(x) Compliance with ERISA. Compliance with ERISA. Except as would not reasonably be
expected to result in a Material Adverse Effect, (i) each employee benefit plan, within the meaning
of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), for
which the Company or any of its subsidiaries would have any liability (each, a “Plan”) has been
maintained in compliance with its terms and the requirements of any applicable statutes, orders,
rules and regulations, including but not limited to ERISA and the Code; (ii) no Plan is subject to
Section 302 or Title IV of ERISA or Section 412 of the Code, and no Plan is a “multiemployer plan,”
within the
meaning of Section 4001(a)(3) of ERISA (a “Multiemployer Plan”); (iii) none of the Company,
any of its subsidiaries, or any of their respective predecessors has in the past six years
sponsored, maintained or contributed to, any Plan subject to Title IV of ERISA or contributed to
any Multiemployer Plan; and (iv) the fair market value of the assets of each Plan exceeds the
present value of all benefits accrued under such Plan (determined based on the actuarial
assumptions used to fund such Plan), and the obligations of each Plan that is not required to be
funded have been properly accrued.
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(xi) Margin Rules. The application of the proceeds received by the Company from the issuance,
sale and delivery of the Shares as described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus will not violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors.
(xii) Forward-Looking Statements. No forward-looking statement (within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration
Statement, the Pricing Disclosure Package or the Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
(xiii) Status under the Securities Act. At the time of filing the Registration Statement and
any post-effective amendment thereto, at the earliest time thereafter that the Company or any
offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) under the
Securities Act) of the Shares and at the date hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405 under the Securities Act.
(xiv) Financial Statements. The financial statements included in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, together with the related schedules and notes,
present fairly the financial position of the Company at the dates indicated and the statement of
operations, stockholders’ equity and cash flows of the Company for the periods specified; said
financial statements, together with the related schedules and notes, have been prepared in
conformity with generally accepted accounting principles (“GAAP”) applied on a consistent basis
throughout the periods involved, except as stated therein. The supporting schedules to such
financial statements included or incorporated by reference in the Registration Statement, if any,
present fairly in accordance with GAAP the information required to be stated therein. The selected
financial data included in Pricing Disclosure Package and 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.
(xv) No Material Adverse Change in Business. Since the respective dates as of which
information is given in the Registration Statement, the Pricing 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, taken as a whole, whether or not arising in the ordinary
course of business (a “Material Adverse Effect”), (B) there have been no transactions entered into
by the Company or its subsidiaries other than those in the ordinary course of business, which are
material with respect to the Company and its subsidiaries, taken as a whole, 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.
(xvi) Good Standing of the Company. Each of the Company and its significant subsidiaries (as
defined in Rule 1-02 of Regulation S-X) has been duly organized and is validly existing as a
corporation or other valid legal entity in good standing under the laws of the jurisdiction in
which it is chartered and organized and has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus and to enter into and perform its obligations under this
Agreement and the Novartis Purchase Agreement; and the Company and each of its significant subsidiaries 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
reasonably be expected to result in a Material Adverse Effect.
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(xvii) Subsidiaries. The subsidiaries set forth in Exhibit 21.1 of the Company’s Annual
Report on Form 10-K for the year ended December 31, 2010, as filed with the Commission on March 7,
2011 (the “10-K”), which is incorporated by reference in the Pricing Disclosure Package and the
Prospectus, are the only subsidiaries of the Company, and all of the issued shares of capital stock
of such subsidiaries have been duly authorized and validly issued and are fully paid and
non-assessable and (except for directors’ qualifying shares) are owned by the Company, either
directly or indirectly, free and clear of any liens, encumbrances, equities or claims.
(xviii) Capitalization. The authorized, issued and outstanding capital stock of the Company
is as set forth in the Registration Statement, the Pricing Disclosure Package and the Prospectus,
except for subsequent issuances, if any, pursuant to this Agreement or the Novartis Purchase
Agreement, or the employee, director and/or consultant compensation, benefit or stock plans
described in the Registration Statement, the Pricing Disclosure Package and the Prospectus or
pursuant to the exercise, conversion or exchange of convertible or exchangeable securities or
options or rights referred to in the Registration Statement, the Pricing Disclosure Package and the
Prospectus. All of 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 was issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(xix) Authorization of Agreement. This Agreement and the Novartis Purchase Agreement have
been duly authorized, executed and delivered by the Company.
(xx) Authorization and Description of Shares. The Shares to be purchased by the Underwriter
from the Company and the Novartis Shares to be purchased by Novartis from the Company have been
duly authorized for issuance and sale to the Underwriter pursuant to this Agreement and to Novartis
pursuant to the Novartis Purchase Agreement, respectively, and, when issued and delivered by the
Company pursuant to this Agreement and the Novartis Purchase Agreement against payment of the
consideration set forth herein and therein, will be validly issued and fully paid and
non-assessable; the Common Stock conforms as to legal matters in all material respects to the
description thereof contained in the Registration Statement, the Pricing Disclosure Package and the
Prospectus and such description conforms to the rights set forth in the instruments defining the
same; no holder of the Shares will be subject to personal liability by reason of being such a
holder; and the issuance of the Shares and Novartis Shares is not subject to the preemptive or
other similar rights of any securityholder of the Company that have not been validly waived.
(xxi) Absence of Defaults and Conflicts. Neither the Company nor any of its significant
subsidiaries is (i) in violation of its charter or by-laws or (ii) 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 may be bound,
or to which any of the property or assets of the Company or any of its subsidiaries is subject
(collectively, “Agreements and Instruments”), except for such defaults that would not reasonably be
expected to result in a Material Adverse Effect; and the execution, delivery and performance of
this Agreement and the Novartis Purchase Agreement and the consummation of the transactions
contemplated herein and therein (including the issuance and sale of the
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Shares and Novartis Shares)
and compliance by the Company with its obligations hereunder and under the Novartis Purchase Agreement have been duly authorized by all necessary corporate action of
the Company 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 pursuant to, the Agreements and Instruments (except for such
conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that would not
reasonably be expected to 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, except as would not
reasonably be expected to result in a Material Adverse Effect, 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 of its 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.
(xxii) [INTENTIONALLY OMITTED].
(xxiii) Fair Summaries. The statements set forth (i) in the Pricing Disclosure Package and
the Prospectus under the captions “Description of Common Stock” and “Underwriting,” (ii) in the
10-K, which is incorporated by reference in the Pricing Disclosure Package and the Prospectus,
under the captions “Business — Collaborations” through and including “Business — Cooperative
Laboratory Agreements — University of Cagliari”, “Business — Patents and Licenses,” “Risk
Factors — Factors Related to Our Relationship with Novartis”, “Risk Factors — Factors Related to
Patents and Licenses” and “Risk Factors — Factors Related to Our Dependence on Third Parties Other
Than Novartis — Our license agreement with GSK is important to our business. The milestone
payments and royalties we could receive under our license agreement with GSK could be delayed,
reduced or terminated if GSK terminates or fails to perform its obligations under its agreement
with us or if GSK is unsuccessful in its sales efforts”, and (iii) in the Company’s Proxy
Statement, as filed with the Commission on April 30, 2010, portions of which are incorporated by
reference in the Pricing Disclosure Package and the Prospectus, under the captions “Compensation
Discussion and Analysis”, “Certain Relationships and Related Person Transactions” and “Corporate
Governance — Director Independence”, insofar as they purport to describe the documents referred to
therein, are accurate, complete and fair in all material respects.
(xxiv) Absence of Labor Dispute. No labor dispute with the employees of the Company or any of
its subsidiaries 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 its
subsidiaries’ principal suppliers, manufacturers, customers or contractors, which, in either case,
would reasonably be expected to result in a Material Adverse Effect.
(xxv) 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 of its
subsidiaries, which is required to be disclosed in the Registration Statement, the Pricing
Disclosure Package or the Prospectus and is not disclosed therein, or, other than as disclosed
therein, which would reasonably be expected to result in a Material Adverse Effect, or which would
materially and adversely affect the properties or assets of the Company and its subsidiaries, taken
as a whole, or the consummation of the transactions contemplated in this Agreement or the Novartis
Purchase Agreement or the performance by the Company of its obligations hereunder and thereunder;
the aggregate of all pending legal or governmental proceedings to which the Company and its
subsidiaries is a party or of which any of its property or assets is the subject which are not
described in the Registration Statement, the Pricing Disclosure Package or the
Prospectus, including ordinary routine litigation incidental to the business, could not
reasonably be expected to result in a Material Adverse Effect.
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(xxvi) Accuracy of Exhibits. There are no contracts or documents which are required to be
described in the Registration Statement, the Pricing Disclosure Package or the Prospectus or to be
filed as exhibits thereto which have not been so described and filed as required.
(xxvii) Intellectual Property.
(a) The Company and its subsidiaries own, possess, license or have other rights under
the patents and patent applications, copyrights, trademarks, service marks, trade names,
technology and know-how (including trade secrets and other unpatented and/or unpatentable
proprietary rights) necessary, or used, in any material respect, for the conduct of their
business in the manner in which it is being conducted and in the manner in which it is
intended to be conducted as set forth in the Registration Statement, the Pricing Disclosure
Package and the Prospectus and reasonably necessary in connection with the commercialization
of product candidates (the “Product Candidates”) described in the Registration Statement,
the Pricing Disclosure Package or the Prospectus as being under development (collectively,
the “Company Intellectual Property”).
(b) To the Company’s and its subsidiaries’ knowledge, (I) none of the claims of patents
owned or licensed by the Company or any of its subsidiaries and constituting Company
Intellectual Property are unenforceable or invalid, and (II) none of the claims of patent
applications owned or licensed by the Company or any of its subsidiaries and constituting
Company Intellectual Property specifically covering Product Candidates or their use would be
unenforceable or invalid if issued as patents, in each case except as enforceability may be
limited by bankruptcy and other similar laws affecting the rights of creditors generally and
general principles of equity.
(c) The Company and its subsidiaries own or possess valid licenses or other rights
under the patents and patent applications set forth in the patent schedule provided by the
Company to you on the date hereof (the “Patent Schedule”), which Patent Schedule lists all
such patents and patent applications necessary for, or used in, any material respect to
conduct the business of the Company and its subsidiaries in the manner in which it is being
conducted and in the manner intended to be conducted as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus and necessary in connection
with the development and commercialization of Product Candidates described in the
Registration Statement, the Pricing Disclosure Package or the Prospectus as being under
development by the Company.
(d) Neither the Company nor any of its subsidiaries is obligated to pay a material
royalty, grant a license, or provide other material consideration to any third party in
connection with the Company Intellectual Property other than as disclosed in the
Registration Statement, the Pricing Disclosure Package and the Prospectus.
(e) Neither the Company nor any of its subsidiaries has received any written notice of
infringement with respect to the Company Intellectual Property other than as disclosed in
the Registration Statement, the Pricing Disclosure Package and the Prospectus or as would
not reasonably be expected to have a Material Adverse Effect; except as disclosed in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, there are no
pending or, to the knowledge of the Company, threatened actions, suits, proceedings or
claims by others against the Company or any of its subsidiaries claiming that the Company or
any of its subsidiaries is infringing any patent, trade secret, trade ▇▇▇▇, service ▇▇▇▇,
copyright or other proprietary right, information or materials.
9
(f) The discoveries, inventions, products or processes of the Company and its
subsidiaries referred to in the Registration Statement, the Pricing Disclosure Package or
the Prospectus do not, to the knowledge of the Company and any of its subsidiaries, infringe
or interfere with any right or patent of any third party, or any discovery, invention,
product or process that is the subject of a patent application filed by any third party,
which could reasonably be expected to have a Material Adverse Effect.
(g) Except as described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, neither the Company nor any of its subsidiaries has received any notice
of any inventorship challenges with respect to the patents and patent applications within
Company Intellectual Property nor, to the Company’s knowledge following reasonable inquiry,
has any interference, conflict, opposition, declaratory action or nullity proceeding been
declared or provoked with respect to such patents and patent applications.
(h) Except as disclosed in the Registration Statement, the Pricing Disclosure Package
and the Prospectus with respect to Novartis and GSK with respect to the IDX899 Product
Candidate, no third party, including any academic or governmental organization, possesses
rights to the Company Intellectual Property which, if exercised, could enable such party to
develop products competitive to the Product Candidates or could reasonably be expected to
have a Material Adverse Effect.
(i) The Company and its subsidiaries and, to the Company’s and its subsidiaries’
knowledge, their respective licensors are not in breach of, and have complied with all terms
of, any license or other agreement relating to Company Intellectual Property, except for
such breaches or non-compliance that could not reasonably be expected to have a Material
Adverse Effect.
(j) There are no contracts or other documents material to the Company Intellectual
Property other than those described in the Registration Statement, the Pricing Disclosure
Package and the Prospectus. Neither the Company nor any of its subsidiaries is aware that
any of its employees is obligated under any contract (including licenses, covenants or
commitments of any nature) or other agreement, or subject to any judgment, decree or order
of any court or administrative agency, that would conflict with the Company’s or its
subsidiaries’ business.
(k) None of the execution or delivery of this Agreement or the Novartis Purchase
Agreement, or the carrying on of the Company’s and its subsidiaries’ business by the
employees of the Company and its subsidiaries, will, to the Company’s and its subsidiaries’
knowledge, conflict with or result in a breach of terms, conditions, or provisions of, or
constitute a default under, any contract, covenant or instrument under which any such
employee is now obligated.
(l) To the Company’s and its subsidiaries’ knowledge, the U.S. government does not have
any right in any Company Intellectual Property.
(m) To the Company’s and its subsidiaries’ knowledge, it is not and will not be
necessary to use any inventions, trade secrets or proprietary information or materials of
any of its consultants, or its employees (or persons it currently intends to hire) made
prior to their employment or engagement by the Company or its subsidiaries except for those
inventions and proprietary information licensed to the Company or its subsidiaries.
(n) The Company and its subsidiaries have complied with the required duty of candor and
good faith in dealing with the United States Patent and Trademark Office (the “PTO”),
including the duty to disclose to the PTO all information believed to be material to the
patentability of the Company’s patents and pending U.S. patent applications within the Company
Intellectual Property.
10
(o) The Company, CNRS, L’Universite Montpellier II (“UMII”) and Universita Degli Studi
di Cagliari (“UDSC”) are identified or will be identified, as applicable, in the records of
the PTO as the holders of record to the U.S. patents and patent applications as set forth in
the Patent Schedule.
(p) To the knowledge of the Company, except as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus, no other entity or individual (i.e.,
other than the Company, CNRS, UMII and UDSC) has any rights, title or interest in the
patents or patent applications set forth in the Patent Schedule or any trademarks,
copyrights or other intellectual property rights of the Company.
(q) The Company, CNRS, UMII and UDSC are similarly listed or will be listed in the
records of corresponding foreign agencies with respect to the foreign counterparts of the
foregoing set forth in the Patent Schedule.
(r) There are no legal or governmental proceedings pending relating to patents, trade
secrets, trade marks, service marks, copyrights or other proprietary information or
materials constituting Company Intellectual Property, other than PTO or foreign patent
office review of pending applications for patents and trademarks, and no such proceedings
are contemplated or, to the knowledge of the Company, threatened by governmental authorities
or others.
(s) The Company and its subsidiaries have diligently prosecuted, and are diligently
prosecuting, claims in the patent applications within the Company Intellectual Property,
which contain claims covering products of the Company and Product Candidates or their method
of use.
(xxviii) Contracts. Each of (i) the Cooperative Antiviral Research Activity Agreement, dated
January 4, 1999, between Idenix SARL, a Société à Responsabilité Limitée organized under the laws
of France (“Idenix France”), and UDSC, as amended by the Letter Agreement, dated April 10, 2002, by
and between Idenix France and UDSC, by the Letter Agreement, dated May 8, 2003, by and among the
Company, Idenix France, Novartis and UDSC, by the Agreement, dated June 30, 2004, by and between
the Company and UDSC, by the Agreement, dated October 24, 2005, by and among the Company, Idenix
France and the UDSC, and by the Amendment Agreement, dated February 4, 2009, by and among the
Company, Idenix France, GSK, UDSC and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the “UDSC Cooperative Agreement”), (ii) the
License Agreement, dated December 14, 2000, between the Company and UDSC, as amended by the Letter
Agreement, dated April 10, 2002, by and between Idenix France and UDSC, by the Letter Agreement,
dated May 8, 2003, by and among the Company, Idenix France, Novartis and UDSC, by the Agreement,
dated June 30, 2004, by and between the Company and UDSC, by the Agreement, dated October 24, 2005,
by and among the Company, Idenix France and the UDSC, and by the Amendment Agreement, dated
February 4, 2009, by and among the Company, Idenix France, GSK, UDSC and ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the “UDSC
License Agreement”), (iii) the Development, License and Commercialization Agreement, dated as of
May 8, 2003, by and among the Company, Idenix Cayman and Novartis as amended on April 30, 2004,
December 21, 2004, February 27, 2006, September 28, 2007, January 28, 2009 and April 6, 2011 and
(iv) the License Agreement, dated as of February 4, 2009, by and among the Company and SmithKline
▇▇▇▇▇▇▇ Corporation, doing business as GlaxoSmithKline (“GSK”), as amended on May 20, 2010, whereby
the Company granted GSK an exclusive license to develop, manufacture and commercialize certain
non-nucleoside reverse transcriptase inhibitor compounds claimed in certain patents and patent
applications owned or controlled by the Company, including the compound developed by the Company
known as IDX899, for the treatment and prophylaxis of human diseases and
conditions on a worldwide basis, is a valid and binding obligation of the parties thereto and
enforceable against such parties in accordance with its terms, except as enforceability may be
limited by bankruptcy and other similar laws affecting the rights of creditors generally and
general principles of equity.
11
(xxix) University of Cagliari. Under the UDSC Cooperative Agreement and the UDSC License
Agreement, the Company has the right to take any and all actions which are necessary to enforce or
defend Company Intellectual Property rights that are co-owned with and/or licensed from UDSC under
such agreements, and the Company has the right to join UDSC as a party plaintiff in any such
action. UDSC has agreed to cooperate, assist and participate, including without limitation as a
party plaintiff, in enforcing or defending the Company Intellectual Property rights that are
co-owned with and/or licensed from UDSC under such agreements.
(xxx) [INTENTIONALLY OMITTED.]
(xxxi) Absence of Manipulation. Neither the Company nor, to the knowledge of the Company, 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 of the price of any security of the Company to
facilitate the sale or resale of the Shares.
(xxxii) Possession of Licenses and Permits. The Company and its subsidiaries possesses 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 and its subsidiaries as described in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, including without
limitation, all such registrations, approvals, certificates, authorizations and permits required by
the United States Food and Drug Administration (the “FDA”), the United States Drug Enforcement
Administration, and/or 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, reasonably be
expected to result in a Material Adverse Effect; the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, reasonably be expected to 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, reasonably be expected to result
in a Material Adverse Effect; and neither the Company nor any of its subsidiaries has received any
notice of proceedings (nor, to the Company’s and its subsidiaries’ knowledge, are any proceedings
threatened against the Company or any of its subsidiaries) 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 reasonably be expected to result in a Material
Adverse Effect. Where required by applicable laws and regulations of the FDA, the Company and its
subsidiaries have submitted to the FDA an Investigational New Drug Application or amendment or
supplement thereto for each clinical trial it has conducted or sponsored or is conducting or
sponsoring, except where such failure would not, singly or in the aggregate, reasonably be expected
to have a Material Adverse Effect; all such submissions were in material compliance with applicable
laws and rules and regulations 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, reasonably be expected to have a Material Adverse Effect.
12
(xxxiii) Tests and Preclinical and Clinical Studies. The Company and its subsidiaries have
operated and currently are in compliance with the United States Federal Food, Drug, and Cosmetic
Act, all applicable rules and regulations of the FDA and other federal, state, local and foreign
governmental bodies exercising comparable authority, except where the failure to so operate or be in
compliance would not reasonably be expected to have a Material Adverse Effect. The clinical studies
conducted by or, to the Company’s knowledge, on behalf of the Company or its subsidiaries that are
described in the Registration Statement, the Pricing Disclosure Package and the Prospectus were,
and, if still pending, are being, conducted in all material respects in accordance with the
protocols submitted to the FDA and all applicable laws and regulations; the preclinical studies
conducted by or, to the Company’s knowledge, on behalf of the Company or its subsidiaries that are
described in the Registration Statement, the Pricing Disclosure Package and the Prospectus were,
and, if still pending, are being, conducted in all material respects in accordance with
experimental protocols, procedures and controls pursuant to, where applicable, accepted
professional and scientific standards for products or product candidates comparable to those being
developed by the Company and its subsidiaries; 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 or its subsidiaries contained in the Registration Statement, the Pricing Disclosure
Package and the Prospectus are accurate and complete in all material respects; the Company is not
aware of any other trials or studies, the results of which reasonably call into question the
results described or referred to in the Registration Statement, the Pricing Disclosure Package and
the Prospectus; except as described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, neither the Company nor any of its subsidiaries are in receipt of any notices
or correspondence from the FDA or any foreign, state or local governmental body exercising
comparable authority that reasonably call into question the results of the trials or studies
described or referred to in the Registration Statement, the Pricing Disclosure Package and the
Prospectus; and, except as described in the Registration Statement, the Pricing Disclosure Package
and the Prospectus, neither the Company nor any of its subsidiaries have received any 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 with respect to product candidates currently under development, or such 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.
(xxxiv) Title to Property. Each of the Company and its subsidiaries has good and marketable
title to all real property owned by it and good title to all other properties owned by it that are
material to the Company and its subsidiaries, taken as a whole, 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 Registration Statement, the Pricing Disclosure Package and
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 its subsidiaries; and all of the leases and subleases material to the business of
the Company and its subsidiaries, taken as a whole, and under which the Company or its subsidiaries
holds properties described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus, are in full force and effect, and, except as described in the Registration Statement,
the Pricing Disclosure Package and the Prospectus or as would not, singly or in the aggregate,
reasonably be expected to result in a Material Adverse Effect, neither the Company nor its
subsidiaries has notice of any material claim of any sort that has been asserted by anyone adverse
to the rights of the Company or its subsidiaries under any of the leases or subleases mentioned
above, or affecting or questioning the rights of the Company or its subsidiaries to the continued
possession of the leased or subleased premises under any such lease or sublease.
(xxxv) Investment Company Act. The Company is not required, and upon the issuance and sale of
the Shares as herein contemplated and the Novartis Shares as contemplated in the Novartis Purchase
Agreement and the application of the net proceeds therefrom as described in the Registration
Statement, the Pricing Disclosure Package and the Prospectus, will not be required, to register as
an “investment company” under the Investment Company Act of 1940, as amended (the “1940 Act”).
13
(xxxvi) Environmental Laws. Except as described in the Registration Statement, the Pricing
Disclosure Package and the Prospectus and except as would not, singly or in the aggregate,
reasonably be expected to result in a Material Adverse Effect, (A) neither the Company not 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, 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 to conduct their business as described in the Registration Statement, the
Pricing Disclosure Package and the Prospectus and are 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 knowledge of the Company, 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.
(xxxvii) Registration Rights. There are no persons with rights to have any securities
registered pursuant to the Registration Statement, which rights have not been waived or complied
with, nor, except as specifically set forth in the Registration Statement, the Pricing Disclosure
Package and the Prospectus, are there any persons with rights to have any securities otherwise
registered by the Company under the Securities Act.
(xxxviii) Accounting Controls and Disclosure Controls.
(a) The Company maintains 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. Except as described in the Pricing Disclosure
Package and the Prospectus, since the end of the Company’s most recent audited fiscal year,
there has been (1) no material weakness in the Company’s internal control over financial
reporting (whether or not remediated) and (2) 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.
(b) The Company employs disclosure controls and procedures that are designed to ensure
that information required to be disclosed by the Company in the reports that it files or
submits under the 1934 Act is recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms, and is accumulated and communicated
to the Company’s management, including its principal executive officer or officers and the
principal financial officer or officers, as appropriate, to allow timely decisions regarding
disclosure.
14
(xxxix) Compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company is in compliance in all material
respects with all provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and all rules and regulations
promulgated thereunder or implementing the provisions thereof (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”), including
Section 402 related to loans and Sections 302 and 906 related to certifications.
(xl) FINRA Matters. Neither the Company nor, to the Company’s knowledge, the Company’s
officers, directors or any of its affiliates (within the meaning of FINRA Conduct Rule 5121(f)(1)),
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(rr) of the By-laws of FINRA) of, any
member firm of FINRA.
(xli) 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, 2005 have been settled and no assessment in connection therewith has been made against the
Company. The Company has filed all other tax returns that are required to have been filed by it
pursuant to applicable foreign, state, local or other law except insofar as the failure to file
such returns would not reasonably be expected to 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,
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 reasonably be expected to
result in a Material Adverse Effect.
(xlii) Insurance. The Company and each of its significant subsidiaries carries or is entitled
to the benefits of insurance, with financially sound and reputable insurers, in such amounts and
covering such risks as is 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 and its significant
subsidiaries 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 now conducted and at a cost that would not result in a
Material Adverse Effect. Neither the Company nor any of its significant subsidiaries has been
denied any insurance coverage which it has sought or for which it has applied.
(xliii) Statistical and Market-Related Data. Any statistical and market-related data included
in the Registration Statement, the Pricing Disclosure Package and the Prospectus are based on or
derived from sources that the Company believes to be reliable and accurate, and, to the extent
required by such sources, the Company has obtained the written consent to the use of such data from
such sources.
(xliv) 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 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, except in each case as would not, singly or in the aggregate,
reasonably be expected to result in a Material Adverse Effect, and, to the knowledge of the
Company, its affiliates have conducted their businesses in compliance with the FCPA, except as
would not reasonably be expected to have a Material Adverse Effect, and have instituted and
maintain policies and procedures designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith.
15
(xlv) No Brokerage Fees. Except as contemplated by this Agreement and as disclosed in the
Registration Statement, the Pricing Disclosure Package and the Prospectus, no person is entitled to
receive from the Company a brokerage commission, finder’s fee or other like payment in connection
with the transactions contemplated herein.
(xlvi) 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”), except in each case as would not,
singly or in the aggregate, reasonably be expected to have a Material Adverse Effect, and no
action, suit or proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company or its subsidiaries with respect to the Money Laundering Laws is
pending or, to the knowledge of the Company, threatened.
(xlvii) 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.
(xlviii) Novartis Shares Exempt From Registration. The offer, issuance and sale of the
Novartis Shares to Novartis pursuant to the Novartis Purchase Agreement are exempt from
registration under the Securities Act.
(b) Officer’s Certificates. Any certificate signed by any officer of the Company delivered to
the Underwriter or to counsel for the Underwriter shall be deemed a representation and warranty by
the Company to the Underwriter as to the matters covered thereby.
4. Further Agreements of the Company. The Company covenants and agrees with the
Underwriter that:
(a) Required Filings. The Company will file the final Prospectus with the Commission
within the time periods specified by Rule 424(b) and Rule 430A, 430B or 430C under the
Securities Act, will file any Issuer Free Writing Prospectus to the extent required by Rule
433 under the Securities Act; will file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the
Prospectus and for so long as the delivery of a prospectus is required in connection with
the offering or sale of the Shares; and will furnish copies of the Prospectus and each
Issuer Free Writing Prospectus (to the extent not previously delivered) to the Underwriter
in New York City prior to 10:00 A.M.,
New York City time, on the business day next succeeding the date of this Agreement in
such quantities as the Underwriter may reasonably request.
16
(b) Delivery of Copies. The Company will deliver, without charge, to the Underwriter,
(A) a conformed copy of the Registration Statement as originally filed and each amendment
thereto (without exhibits) and (B) during the Prospectus Delivery Period (as defined below),
as many copies of the Prospectus (including all amendments and supplements thereto and
documents incorporated by reference therein and each Issuer Free Writing Prospectus) as the
Underwriter may reasonably request. As used herein, the term “Prospectus Delivery Period”
means such period of time after the first date of the public offering of the Shares as in
the reasonable opinion of counsel for the Underwriter a prospectus relating to the Shares is
required by law to be delivered (or required to be delivered but for Rule 172 under the
Securities Act) in connection with sales of the Shares by the Underwriter or dealer.
(c) Amendments or Supplements, Issuer Free Writing Prospectuses. Before preparing,
using, authorizing, approving, referring to or filing any Issuer Free Writing Prospectus,
and before filing any amendment or supplement to the Registration Statement or the
Prospectus, the Company will furnish to the Underwriter and counsel for the Underwriter a
copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for review and
will not prepare, use, authorize, approve, refer to or file any such Issuer Free Writing
Prospectus or file any such proposed amendment or supplement to which the Underwriter
reasonably objects.
(d) Notice to the Underwriter. The Company will advise the Underwriter promptly, and
confirm such advice in writing, (i) when any amendment to the Registration Statement has
been filed or becomes effective; (ii) when any supplement to the Prospectus or any Issuer
Free Writing Prospectus or any amendment to the Prospectus has been filed; (iii) of any
request by the Commission for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or the receipt of any comments from the Commission relating
to the Registration Statement or any other request by the Commission for any additional
information; (iv) of the issuance by the Commission of any order suspending the
effectiveness of the Registration Statement or preventing or suspending the use of any
Preliminary Prospectus, any of the Pricing Disclosure Package or the Prospectus or the
initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of
the Securities Act; (v) of the occurrence of any event within the Prospectus Delivery Period
as a result of which the Prospectus, the Pricing Disclosure Package or any Issuer Free
Writing Prospectus as then amended or supplemented would include any untrue statement of a
material fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances existing when the Prospectus, the Pricing
Disclosure Package or any such Issuer Free Writing Prospectus is delivered to a purchaser,
not misleading; (vi) of the receipt by the Company of any notice of objection of the
Commission to the use of the Registration Statement or any post-effective amendment thereto
pursuant to Rule 401(g)(2) under the Securities Act; and (vii) of the receipt by the Company
of any notice with respect to any suspension of the qualification of the Shares for offer
and sale in any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Company will use its reasonable best efforts to prevent the issuance of any
such order suspending the effectiveness of the Registration Statement, preventing or
suspending the use of any Preliminary Prospectus, any of the Pricing Disclosure Package or
the Prospectus or suspending any such qualification of the Shares and, if any such order is
issued, will obtain as soon as possible the withdrawal thereof.
17
(e) Ongoing Compliance. (1) If during the Prospectus Delivery Period (i) any event
shall occur or condition shall exist as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not misleading or
(ii) it is necessary to amend or supplement the Prospectus to comply with law, the Company
will immediately notify the Underwriter thereof and forthwith prepare and, subject to
paragraph (c) above, file with the Commission and furnish to the Underwriter and to such
dealers as the Underwriter may designate such amendments or supplements to the Prospectus as
may be necessary so that the statements in the Prospectus as so amended or supplemented will
not, in the light of the circumstances existing when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus will comply with law and (2) if at any
time prior to the Closing Date (i) any event shall occur or condition shall exist as a
result of which the Pricing Disclosure Package as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances existing when the
Pricing Disclosure Package is delivered to a purchaser, not misleading or (ii) it is
necessary to amend or supplement the Pricing Disclosure Package to comply with law, the
Company will immediately notify the Underwriter thereof and forthwith prepare and, subject
to paragraph (c) above, file with the Commission (to the extent required) and furnish to the
Underwriter and to such dealers as the Underwriter may designate such amendments or
supplements to the Pricing Disclosure Package as may be necessary so that the statements in
the Pricing Disclosure Package as so amended or supplemented will not, in the light of the
circumstances existing when the Pricing Disclosure Package is delivered to a purchaser, be
misleading or so that the Pricing Disclosure Package will comply with law.
(f) Blue Sky Compliance. The Company will qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as the Underwriter shall reasonably
request and will continue such qualifications in effect so long as required for distribution
of the Shares; provided that the Company shall not be required to (i) qualify as a
foreign corporation or other entity or as a dealer in securities in any such jurisdiction
where it would not otherwise be required to so qualify, (ii) file any general consent to
service of process in any such jurisdiction or (iii) subject itself to taxation in any such
jurisdiction if it is not otherwise so subject.
(g) Earning Statement. The Company will make generally available to its security
holders and the Underwriter as soon as practicable an earning statement that satisfies the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated
thereunder covering a period of at least twelve months beginning with the first fiscal
quarter of the Company occurring after the “effective date” (as defined in Rule 158) of the
Registration Statement.
(h) Clear Market. For a period of 90 days after the date of the Prospectus, the
Company will not (i) offer, pledge, announce the intention to sell, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of, directly or
indirectly, or file with the Securities and Exchange Commission a registration statement
under the Securities Act relating to, any shares of Stock or any securities convertible into
or exercisable or exchangeable for Stock, or publicly disclose the intention to make any
offer, sale, pledge, disposition or filing, or (ii) enter into any swap or other agreement
that transfers, in whole or in part, any of the economic consequences of ownership of the
Stock or any such other securities, whether any such transaction described in clause (i) or
(ii) above is to be settled by delivery of Stock or such other securities, in cash or
otherwise, without the prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities LLC, other than (A)
the Shares to be sold hereunder, (B) any shares of Stock of the Company issued upon
18
the
exercise of options granted under Company Stock Plans described in the Prospectus, (C) the issuance by the Company of any shares of Common Stock, or options to purchase
Common Stock, to employees, directors and/or consultants of the Company pursuant to the
Company Stock Plans, (D) the issuance to Novartis of the Novartis Shares pursuant to the
Novartis Purchase Agreement, (E) the issuance by the Company of shares to Novartis pursuant
to the Amended and Restated Stockholders’ Agreement, dated as of July 23, 2004, as amended,
among the Company, Novartis and certain other stockholders of the Company or (F) the
issuance of up to an aggregate of 3,650,000 shares of Common Stock in connection with any
strategic transaction that includes a commercial relationship (including joint ventures,
marketing or distribution arrangements, collaboration agreements or intellectual property
license agreements) or any acquisition of assets or not less than a majority or controlling
portion of the equity of another entity provided that any such shares of Common Stock and
securities issued pursuant to this clause (F) during the 90-day restricted period described
above shall be subject to the restrictions described above for the remainder of such
restricted period. Notwithstanding the foregoing, if (1) during the last 17 days of the
90-day restricted period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the expiration of the 90-day
restricted period, the Company announces that it will release earnings results during the
16-day period beginning on the last day of the 90-day period, the restrictions imposed by
this Agreement shall continue to apply until the expiration of the 18-day period beginning
on the issuance of the earnings release or the occurrence of the material news or material
event.
(i) Use of Proceeds. The Company will apply the net proceeds from the sale of the
Shares as described in the Registration Statement, the Pricing Disclosure Package and the
Prospectus under the heading “Use of proceeds”.
(j) No Stabilization. The Company will not take, directly or indirectly, any action
designed to or that could reasonably be expected to cause or result in any stabilization or
manipulation of the price of the Stock.
(k) Exchange Listing. The Company will use its reasonable best efforts to list for
quotation the Shares on the Nasdaq Global Market (the “Nasdaq Market”)
(l) Reports. So long as the Shares are outstanding, the Company will furnish to the
Underwriter, as soon as they are available, copies of all reports or other communications
(financial or other) furnished to holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the Commission or any national securities
exchange or automatic quotation system; provided the Company will be deemed to have
furnished such reports and financial statements to the Underwriter to the extent they are
filed on the Commission’s Electronic Data Gathering, Analysis, and Retrieval system.
(m) Record Retention. The Company will, pursuant to reasonable procedures developed in
good faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the
Commission in accordance with Rule 433 under the Securities Act.
5. Certain Agreements of the Underwriter. The Underwriter hereby represents and agrees
that:
(a) It has not used, authorized use of, referred to or participated in the planning for
use of, and will not use, authorize use of, refer to or participate in the planning for use
of, any “free writing prospectus”, as defined in Rule 405 under the Securities Act (which
term includes use of any written information furnished to the Commission by the Company and
not incorporated by reference into the Registration Statement and any press release issued
by the
Company) other than (i) a free writing prospectus that contains no “issuer information”
(as defined in Rule 433(h)(2) under the Securities Act) that was not included (including
through incorporation by reference) in the Preliminary Prospectus or a previously filed
Issuer Free Writing Prospectus, (ii) any Issuer Free Writing Prospectus listed on Annex B or
prepared pursuant to Section 3(a)(iii) or Section 4(c) above (including any electronic road
show), or (iii) any free writing prospectus prepared by such underwriter and approved by the
Company in advance in writing (each such free writing prospectus referred to in clauses (i)
or (iii), an “Underwriter Free Writing Prospectus”).
19
(b) It has not and will not, without the prior written consent of the Company, use any
free writing prospectus that contains the final terms of the Shares unless such terms have
previously been included in a free writing prospectus filed with the Commission; provided
that the Underwriter may use a term sheet substantially in the form of Annex C hereto
without the consent of the Company; provided further that the Underwriter using such term
sheet shall notify the Company, and provide a copy of such term sheet to the Company, prior
to, or substantially concurrently with, the first use of such term sheet.
(c) It is not subject to any pending proceeding under Section 8A of the Securities Act
with respect to the offering (and will promptly notify the Company if any such proceeding
against it is initiated during the Prospectus Delivery Period).
6. Conditions of Underwriter’s Obligations. The obligation of the Underwriter to
purchase the Underwritten Shares on the Closing Date or the Option Shares on the Additional Closing
Date, as the case may be, as provided herein is subject to the performance by the Company of its
covenants and other obligations hereunder and to the following additional conditions:
(a) Registration Compliance; No Stop Order. No order suspending the effectiveness of
the Registration Statement shall be in effect, and no proceeding for such purpose, pursuant
to Rule 401(g)(2) or pursuant to Section 8A under the Securities Act shall be pending before
or threatened by the Commission; the Prospectus and each Issuer Free Writing Prospectus
shall have been timely filed with the Commission under the Securities Act (in the case of an
Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act)
and in accordance with Section 4(a) hereof; and all requests by the Commission for
additional information shall have been complied with to the reasonable satisfaction of the
Underwriter.
(b) Representations and Warranties. The representations and warranties of the Company
contained herein shall be true and correct on the date hereof and on and as of the Closing
Date or the Additional Closing Date, as the case may be; and the statements of the Company
and its officers made in any certificates delivered pursuant to this Agreement shall be true
and correct on and as of the Closing Date or the Additional Closing Date, as the case may
be.
(c) No Downgrade. Subsequent to the earlier of (A) the Applicable Time and (B) the
execution and delivery of this Agreement, if there are any debt securities or preferred
stock of, or guaranteed by, the Company or any of its subsidiaries that are rated by a
“nationally recognized statistical rating organization,” as such term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, (i) no downgrading shall
have occurred in the rating accorded any such debt securities or preferred stock and (ii) no
such organization shall have publicly announced that it has under surveillance or review, or
has changed its outlook with respect to, its rating of any such debt securities or preferred
stock (other than an announcement with positive implications of a possible upgrading).
20
(d) No Material Adverse Change. No event or condition of a type described in Section
3(a)(xv) hereof shall have occurred or shall exist, which event or condition is not
described in the Pricing Disclosure Package (excluding any amendment or supplement thereto)
and the Prospectus (excluding any amendment or supplement thereto) and the effect of which
in the judgment of the Underwriter makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date,
as the case may be, on the terms and in the manner contemplated by this Agreement, the
Pricing Disclosure Package and the Prospectus.
(e) Officer’s Certificate. The Underwriter shall have received on and as of the
Closing Date or the Additional Closing Date, as the case may be, a certificate of the chief
financial officer or chief accounting officer of the Company and one additional senior
executive officer of the Company who is satisfactory to the Underwriter (i) confirming that
such officers have carefully reviewed the Registration Statement, the Pricing Disclosure
Package and the Prospectus and, to the knowledge of such officers, the representations set
forth in Sections 3(a)(ii) and 3(a)(iv) hereof are true and correct, (ii) confirming that
the other representations and warranties of the Company in this Agreement are true and
correct and that the Company has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder at or prior to the Closing Date or the
Additional Closing Date, as the case may be, and (iii) to the effect set forth in paragraphs
(a), (c) and (d) above.
(f) Comfort Letters. On the date of this Agreement and on the Closing Date or the
Additional Closing Date, as the case may be, PricewaterhouseCoopers LLP shall have furnished
to the Underwriter, at the request of the Company, letters, dated the respective dates of
delivery thereof and addressed to the Underwriter, in form and substance reasonably
satisfactory to the Underwriter and PricewaterhouseCoopers LLP, containing statements and
information of the type customarily included in accountants’ “comfort letters” to
underwriters with respect to the financial statements and certain financial information
contained or incorporated by reference in the Registration Statement, the Pricing Disclosure
Package and the Prospectus; provided, that the letter delivered on the Closing Date or the
Additional Closing Date, as the case may be, shall use a “cut-off” date no more than three
business days prior to such Closing Date or such Additional Closing Date, as the case may
be.
(g) Opinion and 10b-5 Statement of Counsel for the Company. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ and ▇▇▇▇ LLP, counsel for the Company, shall have furnished to the Underwriter, at the
request of the Company, their written opinion and 10b-5 statement, dated the Closing Date or
the Additional Closing Date, as the case may be, and addressed to the Underwriter, in form
and substance reasonably satisfactory to the Underwriter, to the effect set forth in Annex A
hereto.
(h) Opinion of in-house Counsel. ▇▇▇▇▇ ▇▇▇▇▇, General Counsel of the Company, shall
have furnished to the Underwriter, at the request of the Company, her written opinion, dated
the Closing Date or the Additional Closing Date, as the case may be, and addressed to the
Underwriter, in form and substance reasonably satisfactory to the Underwriter, to the effect
set forth in Annex A1 hereto.
(i) Opinion of Intellectual Property Counsel. ▇▇▇▇▇ Day, intellectual property counsel
for the Company, shall have furnished to the Underwriter, at the request of the Company,
their written opinion, dated the Closing Date or the Additional Closing Date, as the case
may be, and addressed to the Underwriter, in form and substance reasonably satisfactory to
the Underwriter, to the effect set forth in Annex A2 hereto.
21
(j) Opinion and 10b-5 Statement of Counsel for the Underwriter. The Underwriter shall
have received on and as of the Closing Date or the Additional Closing Date, as the case may
be, an opinion and 10b-5 statement of Ropes & ▇▇▇▇ LLP, counsel for the Underwriter, with
respect to such matters as the Underwriter may reasonably request, and such counsel shall
have received such documents and information as they may reasonably request to enable them
to pass upon such matters.
(k) No Legal Impediment to Issuance. No action shall have been taken and no statute,
rule, regulation or order shall have been enacted, adopted or issued by any federal, state
or foreign governmental or regulatory authority that would, as of the Closing Date or the
Additional Closing Date, as the case may be, prevent the issuance or sale of the Shares; and
no injunction or order of any federal, state or foreign court shall have been issued that
would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent
the issuance or sale of the Shares.
(l) Good Standing. The Underwriter shall have received on and as of the Closing Date
or the Additional Closing Date, as the case may be, satisfactory evidence of the good
standing of the Company and its subsidiaries in their respective jurisdictions of
organization and their good standing as foreign entities in such other jurisdictions as the
Underwriter may reasonably request, in each case in writing or any standard form of
telecommunication from the appropriate governmental authorities of such jurisdictions.
(m) Exchange Listing. The Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall have been approved for listing on the Nasdaq Global
Market, subject to official notice of issuance.
(n) Lock-up Agreements. The “lock-up” agreements, each substantially in the form of
Exhibit A hereto, between you and certain shareholders, officers and directors of the
Company relating to sales and certain other dispositions of shares of Stock or certain other
securities, delivered to you on or before the date hereof, shall be full force and effect on
the Closing Date or Additional Closing Date, as the case may be.
(o) Additional Documents. On or prior to the Closing Date or the Additional Closing
Date, as the case may be, the Company shall have furnished to the Underwriter such further
certificates and documents as the Underwriter may reasonably request.
All opinions, letters, certificates and evidence mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Underwriter.
7. Indemnification and Contribution.
(a) Indemnification of the Underwriter. The Company agrees to indemnify and hold harmless the
Underwriter, its affiliates, directors and officers and each person, if any, who controls the
Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities (including, without
limitation, legal fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that
arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary in order to make the statements
therein, not misleading, (ii) or any untrue statement or
22
alleged untrue statement of a material fact contained in the Prospectus (or any amendment or
supplement thereto), any Issuer Free Writing Prospectus, any “issuer information” filed or required
to be filed pursuant to Rule 433(d) under the Securities Act or any Pricing Disclosure Package
(including any Pricing Disclosure Package that has subsequently been amended), or caused by any
omission or alleged omission to state therein a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading, in
each case except insofar as such losses, claims, damages or liabilities arise out of, or are based
upon, any untrue statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with any information relating to the Underwriter furnished to the Company in
writing by the Underwriter expressly for use therein, it being understood and agreed that the only
such information furnished by the Underwriter consists of the information described as such in
subsection (b) below.
(b) Indemnification of the Company. The Underwriter agrees to indemnify and hold harmless the
Company, its directors, its officers who signed the Registration Statement and each person, if any,
who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only
with respect to any losses, claims, damages or liabilities that arise out of, or are based upon,
any untrue statement or omission or alleged untrue statement or omission made in reliance upon and
in conformity with any information relating to the Underwriter furnished to the Company in writing
by the Underwriter expressly for use in the Registration Statement, the Prospectus (or any
amendment or supplement thereto), any Issuer Free Writing Prospectus or any Pricing Disclosure
Package, it being understood and agreed upon that the only such information furnished by the
Underwriter consists of the following information in the Prospectus furnished on behalf of the
Underwriter: the concession figure appearing in the third paragraph under the caption
“Underwriting”; the information contained in the seventh paragraph under the caption “Underwriting;
the information contained in the thirteenth, fourteenth, fifteenth and sixteenth paragraphs
concerning stabilizing transactions, short sales and passive market making under the caption
“Underwriting”; and the information contained in the last sentence of the twenty-first paragraph
under the caption “Underwriting.”
(c) Notice and Procedures. If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against any person in
respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such
person (the “Indemnified Person”) shall promptly notify the person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the
failure to notify the Indemnifying Person shall not relieve it from any liability that it may have
under paragraph (a) or (b) above except to the extent that it has been materially prejudiced
(through the forfeiture of substantive rights or defenses) by such failure; and provided,
further, that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have to an Indemnified Person otherwise than under paragraph (a) or (b)
above. If any such proceeding shall be brought or asserted against an Indemnified Person and it
shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel
reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the
Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person in
such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as
incurred. In any such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary; (ii) the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person shall have
reasonably concluded that there may be legal defenses available to it that are different from or in
addition to those available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties
23
by the same counsel would be inappropriate
due to actual or potential differing interest between them. It is understood and agreed that the
Indemnifying Person shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to
any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid
or reimbursed as they are incurred. Any such separate firm for the Underwriter, its affiliates,
directors and officers and any control persons of such Underwriter shall be designated in writing
by ▇.▇. ▇▇▇▇▇▇ Securities LLC and any such separate firm for the Company, its directors, its
officers who signed the Registration Statement and any control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if settled with such consent
or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each
Indemnified Person from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is entered into more than 30
days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person
shall not have reimbursed the Indemnified Person in accordance with such request prior to the date
of such settlement (other than reimbursement for fees and expenses that the Indemnifying Person is
contesting in good faith). No Indemnifying Person shall, without the written consent of the
Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Person is or could have been a party and indemnification could have been
sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional
release of such Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of such proceeding and
(y) does not include any statement as to or any admission of fault, culpability or a failure to act
by or on behalf of any Indemnified Person.
(d) Contribution. If the indemnification provided for in paragraphs (a) and (b) above is
unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Underwriter on the other, from the offering of the Shares 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) but also the relative fault of the
Company, on the one hand, and the Underwriter on the other, in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative benefits received by the Company, on the one hand,
and the Underwriter on the other, shall be deemed to be in the same respective proportions as the
net proceeds (before deducting expenses) received by the Company from the sale of the Shares and
the total underwriting discounts and commissions received by the Underwriter in connection
therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the
aggregate offering price of the Shares. The relative fault of the Company, on the one hand, and
the Underwriter on the other, shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or by the Underwriter and the
parties’ relative intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
24
(e) Limitation on Liability. The Company and the Underwriter agree that it would not be just
and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or payable by an
Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with any such action or claim. Notwithstanding the provisions of
this Section 7, in no event shall the Underwriter be required to contribute any amount in excess of
the amount by which the total underwriting discounts and commissions received with respect to the
offering of the Shares exceeds the amount of any damages that the Underwriter has otherwise been
required to pay by reason of 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 Securities Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any Indemnified Person
at law or in equity.
8. Effectiveness of Agreement. This Agreement shall become effective upon the
execution and delivery hereof by the parties hereto.
9. Termination. This Agreement may be terminated in the absolute discretion of the
Underwriter, by notice to the Company, if after the execution and delivery of this Agreement and
prior to the Closing Date or, in the case of the Option Shares, prior to the Additional Closing
Date (i) trading generally shall have been suspended or materially limited on or by any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq Stock Market, the Chicago Board
Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade; (ii) trading of
any securities issued or guaranteed by the Company shall have been suspended on any exchange or in
any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have
been declared by federal or New York State authorities; or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the Underwriter, is material
and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or
delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be, on
the terms and in the manner contemplated by this Agreement, the Pricing Disclosure Package and the
Prospectus.
10. [INTENTIONALLY OMITTED]
11. Payment of Expenses.
(a) Whether or not the transactions contemplated by this Agreement are consummated or this
Agreement is terminated, the Company will pay or cause to be paid all costs and expenses incident
to the performance of its obligations hereunder, including without limitation, (i) the costs
incident to the authorization, issuance, sale, preparation and delivery of the Shares and any taxes
payable in that connection; (ii) the costs incident to the preparation, printing and filing under
the Securities Act of the Registration Statement, the Preliminary Prospectus, any Issuer Free
Writing Prospectus, any Pricing Disclosure Package and the Prospectus (including all exhibits,
amendments and supplements thereto) and the distribution thereof; (iii) the fees and expenses of
the Company’s counsel and independent accountants; (iv) the fees and expenses incurred in
connection with the registration or qualification of the Shares under the state or foreign
securities or blue sky laws of such jurisdictions as the Underwriter may designate and the
preparation, printing and distribution of a Blue Sky Memorandum (including the related reasonable
and documented fees and expenses of outside counsel for the Underwriter); (v) the cost of preparing
stock certificates; (vi) the costs and charges of any transfer agent and any registrar; (vii) all
expenses and application fees incurred in connection with any filing with, and clearance of the
offering by, FINRA; (viii) all expenses incurred by the Company in connection with any “road show”
presentation to potential
investors; and (ix) all expenses and application fees related to the listing of the Shares on
the Nasdaq Global Market.
25
(b) If (i) this Agreement is terminated pursuant to Section 9, (ii) the Company for any reason
fails to tender the Shares for delivery to the Underwriter or (iii) the Underwriter decline to
purchase the Shares for any reason permitted under this Agreement, the Company agrees to reimburse
the Underwriter for all out-of-pocket costs and expenses (including the fees and expenses of their
outside counsel) reasonably incurred by the Underwriter in connection with this Agreement and the
offering contemplated hereby.
12. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective successors and the officers
and directors and any controlling persons referred to in Section 7 hereof. Nothing in this
Agreement is intended or shall be construed to give any other person any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained herein. No
purchaser of Shares from the Underwriter shall be deemed to be a successor merely by reason of such
purchase.
13. Survival. The respective indemnities, rights of contribution, representations,
warranties and agreements of the Company and the Underwriter contained in this Agreement or made by
or on behalf of the Company or the Underwriter pursuant to this Agreement or any certificate
delivered pursuant hereto shall survive the delivery of and payment for the Shares and shall remain
in full force and effect, regardless of any termination of this Agreement or any investigation made
by or on behalf of the Company or the Underwriter.
14. Certain Defined Terms. For purposes of this Agreement, (a) except where otherwise
expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities
Act; (b) the term “business day” means any day other than a day on which banks are permitted or
required to be closed in New York City; (c) the term “subsidiary” has the meaning set forth in Rule
405 under the Securities Act; and (d) the term “significant subsidiary” has the meaning set forth
in Rule 1-02 of Regulation S-X under the Exchange Act.
15. Miscellaneous.
(a) [INTENTIONALLY OMITTED]
(b) Notices. All notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed or transmitted and confirmed by any standard form of
telecommunication. Notices to the Underwriter shall be sent to ▇.▇. ▇▇▇▇▇▇ Securities LLC, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇); Attention Equity Syndicate Desk.
with a copy to Ropes & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇
▇’▇▇▇▇▇, Esq.; notices to the Company shall be directed to it at Idenix Pharmaceuticals, Inc., ▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of General Counsel, with a copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
(c) Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to agreements made and to be performed in such state.
26
(d) Counterparts. This Agreement may be signed in counterparts (which may include
counterparts delivered by any standard form of telecommunication), each of which shall be an
original and all of which together shall constitute one and the same instrument.
(e) Amendments or Waivers. No amendment or waiver of any provision of this Agreement, nor any
consent or approval to any departure therefrom, shall in any event be effective unless the same
shall be in writing and signed by the parties hereto.
(f) Headings. The headings herein are included for convenience of reference only and are not
intended to be part of, or to affect the meaning or interpretation of, this Agreement.
27
If the foregoing is in accordance with your understanding, please indicate your acceptance of
this Agreement by signing in the space provided below.
| Very truly yours, IDENIX PHARMACEUTICALS, INC. |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. | |||
| Name: | ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. | |||
| Title: | President, Chief Executive Officer | |||
Accepted: April 8, 2011
▇.▇. ▇▇▇▇▇▇ SECURITIES LLC
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||||
| Title: | Vice President | |||||
Annex A
[Form of Opinion of Counsel for the Company]
-A-
Annex A1
[Form of Opinion of In-House Counsel for the Company]
A-1
Annex A2
[Form of Opinion of Intellectual Property Counsel for the Company]
A-2
Annex B
a. Pricing Disclosure Package
Issuer Free Writing Prospectus filed on April 8, 2011
b. Pricing Information Provided Orally by Underwriters
none
▇-▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇-▇
Exhibit A
FORM OF LOCK-UP AGREEMENT
April __, 2011
▇.▇. ▇▇▇▇▇▇ SECURITIES LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Idenix Pharmaceuticals, Inc. — Public Offering
Ladies and Gentlemen:
The undersigned understands that you propose to enter into an Underwriting Agreement (the
“Underwriting Agreement”) with Idenix Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), providing for the public offering (the “Public Offering”) by ▇.▇. ▇▇▇▇▇▇ Securities LLC
(the “Underwriter”), of common stock, $0.001 par value, of the Company (the “Securities”).
Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the
Underwriting Agreement.
In consideration of the Underwriter’s agreement to purchase and make the Public Offering of
the Securities, and for other good and valuable consideration receipt of which is hereby
acknowledged, the undersigned hereby agrees that, without the prior written consent of ▇.▇. ▇▇▇▇▇▇
Securities LLC, the undersigned will not, during the period ending 60 days after the date of the
prospectus relating to the Public Offering (the “Prospectus”), (1) offer, pledge, announce the
intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock, $$0.001 per share par value, of
the Company (the “Common Stock”) or any securities convertible into or exercisable or exchangeable
for Common Stock (including without limitation, Common Stock or such other securities which may be
deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of
the Securities and Exchange Commission and securities which may be issued upon exercise of a stock
option or warrant) or (2) enter into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Stock or such other securities,
whether any such transaction described in clause (1) or (2) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise or (3) make any demand for or exercise
any right with respect to the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock, in each case other than (A) the
Securities to be sold by the undersigned pursuant to the Underwriting Agreement, (B) transfers of
shares of Common Stock as a bona fide gift or gifts, (C) the exercise of any option to purchase
shares of Common Stock, provided that the underlying Common Stock continues to be subject to the
restrictions set forth above, (D) transactions relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the Public Offering, (E)
transfers of shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock to the immediate family of the undersigned, to a trust the
beneficiaries of which are exclusively the undersigned and/or a member or members of the immediate
family of the undersigned or to any corporation, partnership, limited liability company or other
entity all of the beneficial ownership interests of which are held exclusively by the undersigned
and/or a member or members of the immediate family of the undersigned, (F) transfers of shares of
Common Stock or any security convertible into or exercisable or exchangeable for Common Stock upon
death by will or intestate succession and (G) the entry into any trading plan established pursuant
to Rule 10b5-1 of the Securities
Exchange Act of 1934, as amended (“Exchange Act”),
provided that no sales or other dispositions may occur under such plan until the expiration of the 60-day restricted period and that no
filing or other public announcement, whether under the Exchange Act or otherwise, shall be
required or shall be made by the undersigned or the Company in connection with the trading plan
during such restricted period and, before the trading plan is established, the Company shall have
provided to ▇.▇. ▇▇▇▇▇▇ Securities LLC written confirmation that no such filing or public
announcement shall be required or shall be made by the Company in connection with the trading plan
during such period; provided, further, that in the case of any transfer or
distribution pursuant to clause (B), (E) or (F), each donee, distributee or transferee shall
execute and deliver to the Underwriter a lock-up letter in the form of this paragraph; and
provided, further, that in the case of any transfer or distribution pursuant to
clause (B), (D), (E) or (F), no filing by any party (donor, donee, transferor or transferee) under
the Exchange Act or other public announcement shall be required or shall be made voluntarily in
connection with such transfer or distribution (other than a filing on a Form 5 made after the
expiration of the 60-day period referred to above). Notwithstanding the foregoing, if (1) during
the last 17 days of the 60-day restricted period, the Company issues an earnings release or
material news or a material event relating to the Company occurs; or (2) prior to the expiration
of the 60-day restricted period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the 60-day period, the restrictions imposed
by this Letter Agreement shall continue to apply until the expiration of the 18-day period
beginning on the issuance of the earnings release or the occurrence of the material news or
material event.
In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation or breach of this
Letter Agreement.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Letter Agreement. All authority herein conferred or agreed to be
conferred and any obligations of the undersigned shall be binding upon the successors, assigns,
heirs or personal representatives of the undersigned.
The undersigned understands that, if the Underwriting Agreement does not become effective
prior to June 30, 2011, or if the Underwriting Agreement (other than the provisions thereof which
survive termination) shall terminate or be terminated prior to payment for and delivery of the
Common Stock to be sold thereunder, the undersigned shall be released from, all obligations under
this Letter Agreement. The undersigned understands that the Underwriter is entering into the
Underwriting Agreement and proceeding with the Public Offering in reliance upon this Letter
Agreement.
This Letter Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof.
| Very truly yours, [NAME OF STOCKHOLDER] |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||