EXHIBIT 1.1
FORM OF UNDERWRITING AGREEMENT
IDENIX PHARMACEUTICALS, INC.
COMMON STOCK (PAR VALUE $0.001 PER SHARE)
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UNDERWRITING AGREEMENT
_________, 2004
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
Bear ▇▇▇▇▇▇▇ & Co. Inc.,
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, ▇▇▇▇▇ & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Ladies and Gentlemen:
Idenix Pharmaceuticals, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of 4,600,000 shares of common stock, $0.001 par value ("Stock"), of the Company
and the stockholders of the Company named in Schedule II hereto (the "Selling
Stockholders") propose, subject to the terms and conditions stated herein, to
sell to the Underwriters an aggregate of 1,200,000 shares and, at the election
of the Underwriters, up to 870,000 additional shares of Stock. The aggregate of
5,800,000 shares to be sold by the Company and the Selling Stockholders is
herein called the "Firm Shares" and the aggregate of 870,000 additional shares
to be sold by the Selling Stockholders is herein called the "Optional Shares".
The Firm Shares and the Optional Shares that the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively called the "Shares".
Concurrently with the initial public offering 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 First Time of Delivery (as defined in Section 4
hereof) (i) 5,400,000 shares of Stock (the "Private Placement Novartis Shares")
pursuant to the Concurrent Private Placement Stock Purchase Agreement, dated the
date hereof, between Novartis and the Company (the "Private Placement Purchase
Agreement"), and (ii) 1,100,000 shares of Stock (collectively with the Private
Placement Novartis Shares, the "Novartis Shares") pursuant to the Par Value
Stock Purchase Agreement, dated the date hereof, between Novartis and the
Company (collectively with the Private Placement Purchase Agreement, the
"Novartis Purchase Agreements").
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇") has agreed to reserve
a portion of the Shares to be purchased by it under this Agreement for sale to
the Company's directors, officers, employees and business associates and other
parties related to the Company (collectively, "Participants"), as set forth in
the Prospectus under the heading "Underwriting" (the "Directed Share Program").
The Shares to be sold by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and its affiliates pursuant to the
Directed Share
Program are referred to hereinafter as the "Directed Shares". Any Directed
Shares not confirmed for purchase by any Participants by the end of the business
day on which this Agreement is executed will be offered to the public by the
Underwriters as set forth in the Prospectus.
1. (i) The Company represents and warrants to, and agrees with, each of
the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-111157), as
amended (the "Initial Registration Statement"), in respect of the Shares has
been filed with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto, each in
the form heretofore delivered to you, and, excluding exhibits thereto, to you
for each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any, increasing
the size of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the
"Act"), which became effective upon filing, no other document with respect to
the Initial Registration Statement has heretofore been filed with the
Commission; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the Rule 462(b)
Registration Statement, if any, has been issued and no proceeding for that
purpose has been initiated or, to the knowledge of the Company, threatened by
the Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement and the
Rule 462(b) Registration Statement, if any, including all exhibits thereto and
including the information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statement at the time it was declared effective, each as
amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any, became
or hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; and such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Act, is hereinafter called the "Prospectus");
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary Prospectus,
at the time of filing thereof, conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by an
Underwriter through ▇▇▇▇▇▇▇, Sachs & Co. expressly for use therein or by a
Selling Stockholder expressly for use in the preparation of the answers therein
to Items 7 and 11(m) of Form S-1;
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of the Act
and the rules and regulations of the Commission thereunder and do not and will
not, as of the applicable effective date as to the Registration Statement and
any amendment thereto, and as of the applicable filing date as to the Prospectus
and any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
this representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use
therein or by a
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Selling Stockholder expressly for use in the preparation of the answers therein
to Items 7 and 11(m) of Form S-1;
(d) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the respective
dates as of which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock (other than
pursuant to the exercise of existing stock options) or long-term debt of the
Company or any of its subsidiaries or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, management, the consolidated financial position, stockholders'
equity or results of operations of the Company and its subsidiaries, taken as a
whole ("Material Adverse Effect"), otherwise than as set forth or contemplated
in the Prospectus;
(e) The Company and its subsidiaries own no real property and have
good and valid title to all personal property owned by them, in each case free
and clear of all liens, encumbrances and defects except such as are described in
the Prospectus or such as do not materially affect the value of such property
and do not interfere with the use made and proposed to be made of such property
by the Company and its subsidiaries; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and its subsidiaries;
(f) The Company was duly incorporated and, until its deregistration
under the laws of the Cayman Islands on May 30, 2002, validly existing as an
exempted company incorporated in the Cayman Islands with limited liability under
the laws of the Cayman Islands. The Company is duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties and conduct
its business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, or is subject to
no material liability or disability by reason of the failure to be so qualified
in any such jurisdiction; and each subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation;
(g) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the description of the Stock contained in the Prospectus;
(h) The unissued Shares to be issued and sold by the Company to the
Underwriters hereunder and the Novartis Shares to be issued and sold by the
Company to Novartis pursuant to the Novartis Purchase Agreements have been duly
and validly authorized and, when issued and delivered against payment therefor
as provided herein and therein, will be duly and validly issued and fully paid
and non-assessable and will conform to the description of the Stock contained in
the Prospectus;
(i) Idenix (Cayman) Limited, an exempted company incorporated in the
Cayman Islands ("Idenix Cayman"), Idenix (Massachusetts) Inc., a corporation
organized under the laws of the Commonwealth of Massachusetts ("Idenix
Massachusetts"), Idenix SARL, a Societe a Responsabilite Limitee organized under
the laws of France ("Idenix France") and Idenix B.V., a private limited company
under the laws of The Netherlands ("Idenix B.V."), are the only subsidiaries of
the Company and all of the issued shares of capital stock of Idenix Cayman,
Idenix Massachusetts, Idenix France
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and Idenix B.V. have been duly and validly authorized and issued, 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;
(j) The Company has filed all notices, reports, documents or other
information required to be filed by it pursuant to, and has obtained any and all
authorizations, approvals, orders, consents, licenses, certificates, permits,
registrations or qualifications required to be obtained under, and has otherwise
complied with all requirements of, all applicable laws of the Cayman Island and
the State of Delaware in connection with the consummation of the de-registration
of the Company in the Cayman Islands (the "Cayman Deregistration"), the
replacement of the Company's Cayman Islands' Memorandum and Articles of
Association with a Delaware certificate of incorporation and by-laws and the
domestication of the Company in the State of Delaware pursuant to Section 388 of
the Delaware General Corporation Law (the "Delaware Domestication") and the
Cayman Deregistration and the Delaware Domestication (together, the
"Domestication") are legal, effective and valid and in accordance with the laws
of the Cayman Islands and the State of Delaware. The consummation of the
Domestication has not conflicted with or resulted in a breach or violation of
any of the terms or provisions of, or constituted a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, and
which will not affect the validity of the Domestication or the transactions
contemplated by this Agreement or the Novartis Purchase Agreements. The
Domestication did not result in any violation of the provisions of the
Memorandum and Articles of Association of the Company, as in effect at such
time, or the provisions of any certificate of incorporation, by-laws,
memorandum, articles of association or other governing documents (as applicable)
of any of the Company's subsidiaries, as in effect at such time, or any statute,
rule or regulation, or, to the Company's best knowledge, any order or decree of
any court or regulatory authority or other governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties;
(k) The issue and sale of the Shares and the Novartis Shares by the
Company and the compliance by the Company with all of the provisions of this
Agreement and the Novartis Purchase Agreements and the consummation of the
transactions herein and therein contemplated will not conflict with or result in
a breach or violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan agreement or other
material agreement or material instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such action result in any violation of the
provisions of the Restated Certificate of Incorporation or By-Laws of the
Company, as currently in effect and as amended (effective as of the First Time
of Delivery), or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
subsidiaries or any of their properties (except for such violations of statutes,
orders, rules or regulations which would not reasonably be expected to result in
a Material Adverse Effect); and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issue and sale of the Shares or the Novartis Shares
or the consummation by the Company of the transactions contemplated by this
Agreement or the Novartis Purchase Agreements, except the registration under the
Act of the Shares and such consents, approvals, authorizations, registrations or
qualifications as may be required by the National Association of Securities
Dealers, Inc. or under state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters and the purchase of
the Novartis Shares by Novartis;
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(l) Neither the Company nor any of its subsidiaries is in violation
of its certificate of incorporation, by-laws, memorandum, articles of
association or other governing documents (as applicable) or in default in the
performance or observance of any material obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other material agreement or material instrument to which it is a party
or by which it or any of its properties may be bound;
(m) The statements set forth in the Prospectus under the captions
"Risk Factors - Risks Related to Development, Clinical Testing and Regulatory
Approval of Our Drug Candidates", "Risk Factors - Risks Related to Our
Relationship with Novartis", "Risk Factors - Risks Related to Patents and
Licenses", "Business - Drug Discovery", "Business - Collaborations", "Business -
Patents and Licenses", "Business - Pharmaceutical Pricing and Reimbursement",
"Business - Regulatory Matters", "Relationship with Novartis", "Management",
"Certain Relationships and Related Party Transactions", "Description of Capital
Stock", "Shares Eligible for Future Sale", "Material U.S Federal Tax
Consequences for Non-U.S. Holders of Our Common Stock" and "Underwriting",
insofar as they purport to describe the documents referred to therein, are
accurate, complete and fair in all material respects;
(n) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property of
the Company or any of its subsidiaries is the subject which, if determined
adversely to the Company or any of its subsidiaries, would individually or in
the aggregate have a Material Adverse Effect; and, to the best of the Company's
knowledge, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(o) The Company is not and, after giving effect to the offering and
sale of the Shares and the Novartis Shares, will not be an "investment company",
as such term is defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(p) Neither the Company nor any of its subsidiaries does business
with the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes;
(q) PricewaterhouseCoopers LLP, who have certified certain financial
statements of the Company and its subsidiaries, are independent registered
public accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(r) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (1)
transactions are executed in accordance with management's general or specific
authorizations; (2) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is
permitted only in accordance with management's general or specific
authorization; and (4) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences;
(s) (i) 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 for, or used in, any
material respect to conduct 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 Prospectus and necessary in connection
with the commercialization of drug candidates (the "Drug
Candidates") described in the table on page 65 of the Prospectus as
being under development
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(collectively with the Company's rights under the License Agreement,
dated as of June 20, 1998, between the Company and the UAB Research
Foundation, as amended by First Amendment Agreement, dated as of
June 20, 1998, and Second Amendment Agreement, dated as of July 16,
1999 (as amended, the "UAB License Agreement"), the "Company
Intellectual Property");
(ii) None of the claims of patents owned or licensed by the
Company or any of its subsidiaries are unenforceable or invalid, and
none of the claims of patent applications owned or licensed by
Company or any of its subsidiaries specifically covering Drug
Candidates or their use as described in the Table on page 65 of the
Prospectus would be unenforceable or invalid if issued as patents;
(iii) 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
(other than in the case of the Company's rights under the UAB
License Agreement) 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 Prospectus and necessary in connection with the
development and commercialization of Drug Candidates described in
the Prospectus as being under development;
(iv) Neither the Company nor any of its subsidiaries is
obligated to pay a royalty, grant a license, or provide other
consideration to any third party in connection with the Company
Intellectual Property other than as disclosed in the Prospectus;
(v) Neither the Company nor any of its subsidiaries has
received any notice of infringement or material conflict with rights
of others with respect to the Company Intellectual Property other
than as disclosed in the Prospectus; there are no pending or, to the
knowledge of the Company, threatened actions, suits, proceedings or
claims by others that the Company or any of its subsidiaries is
infringing any patent, trade secret, trade ▇▇▇▇, service ▇▇▇▇,
copyright or other proprietary right, information or materials other
than as disclosed in the Prospectus; except as scheduled or as
disclosed in the Prospectus, neither the Company nor any of its
subsidiaries has received any notice of conflict with rights of
others with respect to the Company Intellectual Property;
(vi) To the Company's and its subsidiaries' knowledge and
other than as disclosed in the Prospectus, (A) the development and
commercialization of the telbivudine, valtorcitabine and NV-05A Drug
Candidates as described in the Prospectus do not infringe or
conflict with any third party patent or other intellectual property
rights, (B) the development and commercialization of the NM 283 and
NV-08B Drug Candidates as described in the Prospectus do not
infringe any third party patent, (C) except as scheduled, the
development and commercialization of the NM 283 and NV-08B Drug
Candidates as described in the Prospectus do not conflict with any
third party intellectual property rights, (D) none of the Company,
the Company's subsidiaries, any of the co-inventors or co-owners
named on patents and patent applications which form the Company
Intellectual Property or any other person involved with seeking
patent rights on behalf of the Company or any of its subsidiaries
(collectively, the "Drug Discovery Network") has received any notice
of infringement or conflict with, and does not know of any
infringement or conflict with, rights of others with respect to the
Company Intellectual Property, and (E) there are no pending or
threatened actions, proceedings or claims by
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others that the Drug Discovery Network is infringing any patent,
trade secret, trade ▇▇▇▇, service ▇▇▇▇, copyright or proprietary
information or materials;
(vii) The discoveries, inventions, products or processes of
the Company and its subsidiaries referred to in the Prospectus,
other than those related to the NM 283 and NV-08B Drug Candidates
and their use to treat hepatitis C and discussed in (viii) below, do
not, to the knowledge of the Company and any of its subsidiaries,
infringe or conflict with any right or patent of any third party, or
any discovery, invention, product or process which is the subject of
a patent application filed by any third party, which could
reasonably be expected to have a Material Adverse Effect;
(viii) The discoveries, inventions, products or processes of
the Company and its subsidiaries referred to in the Prospectus
related to the NM 283 and NV-08B Drug Candidates and their use to
treat hepatitis C do not, to the knowledge of the Company and any of
its subsidiaries, infringe any patent of any third party; except as
scheduled, the discoveries, inventions, products or processes of the
Company and its subsidiaries referred to in the Prospectus related
to the NM 283 and NV-08B Drug Candidates and their use to treat
hepatitis C do not, to the knowledge of the Company and any of its
subsidiaries, conflict with any right of any third party, or any
discovery, invention, product or process which is the subject of a
patent application filed by any third party, which could reasonably
be expected to have a Material Adverse Effect other than as
described in the Prospectus;
(ix) The patents and patent applications within Company
Intellectual Property disclose patentable subject matter and there
are no material inventorship challenges nor has any interference
been declared or provoked nor is any material fact known with
respect to such patents and patent applications that would preclude
the issuance of patents with respect to such applications or would
render such patents invalid or unenforceable; except as scheduled
with respect to U.S. application no. 09/371,747 and related
applications, there are no inventorship challenges with respect to
the patents and patent applications within Company Intellectual
Property;
(x) Except for Novartis, 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 Drug Candidates or
could reasonably be expected to have a Material Adverse Effect on
the ability of the Company or its subsidiaries to conduct their
business in the manner described in the Prospectus;
(xi) 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 on the ability of the
Company or its subsidiaries to conduct their business in the manner
described in the Prospectus;
(xii) There are no contracts or other documents material to
the Company Intellectual Property other than those described in 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 interfere with the use of such
employee's best efforts to promote the interest of the Company and
its subsidiaries or that would conflict with the Company's or its
subsidiaries' business;
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(xiii) None of the execution or delivery of this Agreement and
the Novartis Purchase Agreements, or the carrying on of the
Company's and its subsidiaries' business by the employees of the
Company and its subsidiaries, or the conduct of the Company's and
its subsidiaries' business as proposed, 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;
(xiv) The U.S. government does not have any right in
telbivudine or valtorcitabine or their use to treat hepatitis;
(xv) 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;
(xvi) U.S. patent applications nos. 08/320,461 filed October
7, 1994, 08/485,716 filed June 7, 1995, 09/112,878 filed July 9,
1998, and 09/879,854 filed June 12, 2001, do not contain support
under 35 USC Section 112 for a claim that covers the use of
telbivudine to treat hepatitis B, or in the alternative, any such
claim that covers the use of telbivudine to treat hepatitis B and
that is supported under 35 USC Section 112 in any of the
applications would be invalid under 35 USC Section 102;
(xvii) The Company has a valid and binding license to U.S.
Application Serial No. 09/879,854, filed June 12, 2001, and any
continuations, divisionals, renewals, reissues, extensions,
reexaminations and continuations-in-part by an agreement dated June
20, 1998, as amended on December 4, 1998 and July 16, 1999; and
(xviii) There are no material third party claims of
inventorship, ownership interest or lien, other than co-ownership by
Le Centre National de la Recherche Scientifique ("CNRS"), with
respect to any of U.S. Patent Nos. 6,566,344, 6,444,652, 6,395,716
and 6,569,837; other than as scheduled, there are no third party
claims of inventorship, ownership interest or lien, other than
co-ownership by CNRS, with respect to any of U.S. Patent Nos.
6,566,344, 6,444,652, 6,395,716 and 6,569,837.
(t) The Company, its subsidiaries and the Drug Discovery Network
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;
(u) The Company, Le Centre National de la Recherche Scientifique
("CNRS"), L'Universite Montpellier II ("UMII") and Universita Degli Studi di
Cagliari ("UDSC") are identified, as applicable, or will be identified, in due
course, 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;
(v) To the knowledge of the Company, 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;
(w) The Company, CNRS, UMII and UDSC are similarly listed, or will
be listed, in due course, in the records of corresponding foreign agencies with
respect to the foreign counterparts of the foregoing set forth in the Patent
Schedule;
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(x) There are no legal or governmental proceedings pending relating
to patents, trade secrets, trademarks, service marks, copyrights or other
proprietary information or materials, 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;
(y) 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
Drug Candidates or their method of use as described in the table on page 65 of
the Prospectus as being under development;
(z) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or foreign
regulatory authorities necessary to conduct their business as presently
conducted, including without limitation, all such certificates, authorizations
a nd permits required by the United States Food and Drug Administration (the
"FDA") or any other federal, state or foreign agencies or bodies engaged in the
regulation of pharmaceuticals or biohazardous substances, except where the
failure to possess such certificates, authorizations and permits would not,
singly or in the aggregate, have a Material Adverse Effect; neither the Company
nor any subsidiary has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization or permit
which, singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, could result in a Material Adverse Effect; the Company and
its subsidiaries are in compliance in all material respects with all applicable
federal, state, local and foreign laws, regulations, orders and decrees
governing its business as currently conducted, including without limitation, all
regulations prescribed by the FDA or any other federal, state or foreign
agencies or bodies engaged in the regulation of pharmaceuticals or biohazardous
substances or materials, except where noncompliance would not, singly or in the
aggregate, have a Material Adverse Effect; and to the best knowledge of the
Company, other than as set forth in the Prospectus, no prospective change in any
applicable federal, state, local or foreign laws, rules or regulations has been
adopted which, when made effective, would have a Material Adverse Effect;
(aa) Each of (i) the Restated and Amended Cooperative Agreement,
dated May 7, 2003, between Idenix France, the Company, CNRS, UMII and Novartis
(the "CNRS Cooperative Agreement"), (ii) the Cooperative Antiviral Research
Activity Agreement, dated January 4, 1999, between Idenix France and UDSC, as
amended by the Letter Agreement, dated April 14, 2002, by and between Idenix
France and UDSC, and by the Letter Agreement, dated May 8, 2003, and by and
among the Company, Idenix France, Novartis and UDSC, and by the Agreement, dated
June 30, 2004, by and between the Company and UDSC (the "UDSC Cooperative
Agreement"), (iii) the License Agreement, dated December 14, 2000, between the
Company and UDSC, as amended by the Letter Agreement, dated April 14, 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, and by the
Agreement, dated June 30, 2004, by and between the Company and UDSC (the "UDSC
License Agreement"), (iv) the Development, License and Commercialization
Agreement, dated as of May 8, 2003, by and among the Company, Idenix Cayman and
Novartis and (v) the Master Manufacturing and Supply Agreement, dated as of May
8, 2003, by and between Idenix Cayman and Novartis, is a valid and binding
obligation of the parties thereto and enforceable against such parties in
accordance with its terms;
(ab) The Company and its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are customary in the businesses in which they are engaged; neither
the Company nor any of its subsidiaries has been refused any insurance coverage
sought or applied for; and neither the Company nor any of its subsidiaries has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be
9
necessary to continue its business at a cost that would not have a Material
Adverse Effect, except as described in the Prospectus;
(ac) The Company and each of its subsidiaries have all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and have made all declarations and filings with, all federal, state, local
and other governmental authorities, all self-regulatory organizations and all
courts and other tribunals, to own, lease, license and use their properties and
assets and to conduct their business in the manner in which it is described in
the Prospectus, with such exceptions as do not and will not, individually or in
the aggregate, have a Material Adverse Effect;
(ad) The Company and each of its subsidiaries (i) have been in
compliance with any and all applicable foreign, federal, state, and local laws,
regulations and common law standards of conduct relating to the protection of
human health and safety, the environment or hazardous or toxic substances,
chemicals, wastes, pollutants and contaminants ("Environmental Laws"), (ii) have
received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective business activities as
described in the Prospectus and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, (iv) are not liable for
costs which have arisen under any Environmental Law for the unlawful release or
disposal of any substance regulated pursuant to any Environmental Law; (v) have
not received any claim, notice, demand or letter indicating that it may be in
violation of, or subject to liability or costs under, any Environmental Law; and
(vi) are not subject to any order, decree, injunction or agreement with any
governmental authority or any third party (other than Novartis) concerning
obligations or liabilities relating to any Environmental Law; except where such
noncompliance with Environmental Laws, failure to receive required permits,
licenses or other approvals, failure to comply with the terms and conditions of
such permits, licenses or approvals or liabilities, claims, orders or agreement,
would not, singly or in the aggregate, have a Material Adverse Effect;
(ae) There are no contracts, agreements or understandings between
the Company and any person granting such person the right to require the Company
to file a registration statement under the Act with respect to any securities of
the Company or to include any securities of the Company with the Shares
registered pursuant to the Registration Statement, except as otherwise disclosed
in the Prospectus or as have been validly waived in writing by such person in
connection with the offering of Shares contemplated hereby;
(af) Each of the Company and its subsidiaries is not involved in any
labor dispute nor, to the best knowledge of the Company, is any such dispute
threatened. The Company is not aware that (A) any executive, key employee, key
consultant or significant group of employees or consultants of the Company or
any subsidiary plans to terminate his or her employment or consulting agreement
with the Company or any such subsidiary, or (B) any such executive, key employee
or key consultant is subject to any noncompete, nondisclosure, confidentiality,
employment, consulting or similar agreement that would be violated by the
present or proposed business activities of the Company and its subsidiaries;
(ag) The offer, issuance and sale of the Novartis Shares to Novartis
pursuant to the Novartis Purchase Agreements are exempt from registration under
the Act;
(ah) The Registration Statement, the Prospectus and any Preliminary
Prospectus comply, and any amendments or supplements thereto will comply, with
any applicable laws or regulations of foreign jurisdictions in which the
Prospectus or any Preliminary Prospectus, as amended or supplemented, if
applicable, are distributed in connection with the Directed Share Program;
10
(ai) No consent, approval, authorization or order of, or
qualification with, any governmental body or agency, other than those obtained,
is required in connection with the offering of the Directed Shares in any
jurisdiction where the Directed Shares are being offered;
(aj) In the case of any Participant who is a French resident, such
Participant has a personal relationship to the management of the Company of a
professional or family nature such that he or she would be deemed a member of a
restricted circle of investors (cercle restreint d'investisseurs) as defined in
Article L.411-2 of the French Code monetaire et financier and French Decree no.
98-880 dated 1 October, 1998;
(ak) The Company has not offered, or caused ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or its
affiliates to offer, Shares to any person pursuant to the Directed Share Program
with the intent to unlawfully influence (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business with the
Company, or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products; and
(al) Under the Research Agreement and License Agreement as amended
in 2002, 2003 and 2004, with the University of Cagliari, 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
the University of Cagliari under such agreements, and Idenix has the right to
join the University of Cagliari as a party plaintiff in any such action. The
University of Cagliari 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
the University of Cagliari under such agreements.
(ii) Each of the Selling Stockholders severally represents and warrants
to, and agrees with, each of the Underwriters and the Company that:
(a) All consents, approvals, authorizations and orders necessary for
the execution and delivery by such Selling Stockholder of this Agreement, the
Custody Agreement and, other than in the case of Biomedical Sciences Investment
Fund PTE Ltd. ("Biomedical"), the Power of Attorney hereinafter referred to, and
for the sale and delivery of the Shares to be sold by such Selling Stockholder
hereunder, have been obtained; and such Selling Stockholder has full right,
power and authority to enter into this Agreement, the Custody Agreement and,
other than in the case of Biomedical, the Power-of-Attorney and to sell, assign,
transfer and deliver the Shares to be sold by such Selling Stockholder
hereunder;
(b) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement, the Custody Agreement and, other than in the case
of Biomedical, the Power of Attorney and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any statute, indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder is bound or to which any of the property or assets of
such Selling Stockholder is subject, nor will such action result in any
violation of the provisions of the certificate of incorporation or by-laws of
such Selling Stockholder if such Selling Stockholder is a corporation, the
partnership agreement of such Selling Stockholder if such Selling Stockholder is
a partnership or the other governing documents of such Selling Stockholder if
such Selling Stockholder is not a corporation or a partnership, or any statute
or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder (except for such violations of statutes, orders, rules or
regulations which would not reasonably be expected to result in any material
adverse change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, the consolidated
financial position, stockholders' equity or results of operations of such
Selling Stockholder);
(c) Such Selling Stockholder has, and immediately prior to each Time
of Delivery (as defined in Section 4 hereof) such Selling Stockholder will have,
good and valid title to the Shares to be sold by such Selling Stockholder
hereunder, free and clear of all liens, encumbrances, equities or claims; and,
assuming that each Underwriter acquires a securities entitlement (within the
meaning of Sections 8-102(a)(17) and 8-501 of the Uniform Commercial Code (the
"UCC")) in the Shares
11
transferred by such Selling Stockholder by having such Shares credited to the
securities account or accounts of such Underwriter maintained with The
Depository Trust Company ("DTC") or another securities intermediary, and makes
payment for such Shares as provided in this Agreement, in each case without
notice of any adverse claim (within the meaning of Sections 8-105 and 8-502 of
the UCC), the Underwriters will acquire such Shares free of any adverse claim
(within the meaning of Section 8-102 of the UCC);
(d) Such Selling Stockholder will comply with the selling
restrictions set forth in the Form of Lock-up Agreement attached hereto as Annex
III;
(e) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has constituted
or which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Shares;
(f) The Preliminary Prospectus and the Registration Statement did
not, and the Prospectus and any further amendments or supplements to the
Registration Statement and the Prospectus, when they become effective or are
filed with the Commission, as the case may be, will not, contain an untrue
statement of a material fact or omit to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
solely as a result of the inclusion of a statement or omission of a statement
made in reliance upon and in conformity with written information furnished to
the Company by such Selling Stockholder expressly for use therein;
(g) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal Responsibility
Act of 1982 with respect to the transactions herein contemplated, such Selling
Stockholder will deliver to you prior to or at the First Time of Delivery (as
hereinafter defined) a properly completed and executed United States Treasury
Department Form W-9, W-8BEN or W-8ECI, as applicable (or other applicable form
or statement specified by Treasury Department regulations in lieu thereof);
(h) Certificates in negotiable form representing all of the Shares
to be sold by such Selling Stockholder hereunder have been placed in custody
under a Custody Agreement, in the form heretofore furnished to you (the "Custody
Agreement"), duly executed and delivered by such Selling Stockholder to the
Company, as custodian (the "Custodian"), and such Selling Stockholder (other
than Biomedical) has duly executed and delivered a Power of Attorney, in the
form heretofore furnished to you (the "Power of Attorney"), appointing the
persons indicated in Schedule II hereto, and each of them, as such Selling
Stockholder's attorneys-in-fact (the "Attorneys-in-Fact") with authority to
execute and deliver this Agreement on behalf of such Selling Stockholder, to
determine the purchase price to be paid by the Underwriters to the Selling
Stockholders as provided in Section 2 hereof, to authorize the delivery of the
Shares to be sold by such Selling Stockholder hereunder and otherwise to act on
behalf of such Selling Stockholder in connection with the transactions
contemplated by this Agreement and the Custody Agreement; and
(i) The Shares represented by the certificates held in custody for
such Selling Stockholder under the Custody Agreement are subject to the
interests of the Underwriters hereunder; the arrangements made by such Selling
Stockholder for such custody, and the appointment by such Selling Stockholder,
other than Biomedical, of the Attorneys-in-Fact by the Power of Attorney, are to
that extent irrevocable; the obligations of the Selling Stockholders hereunder
shall not be terminated by operation of law, whether by the death or incapacity
of any individual Selling Stockholder or, in the case of an estate or trust, by
the death or incapacity of any executor or trustee or the termination of such
estate or trust, or in the case of a partnership or corporation, by the
dissolution of such partnership or corporation, or by the occurrence of any
other event; if any individual Selling Stockholder or any such executor or
trustee should die or become incapacitated, or if any such estate or trust
should be terminated, or if any such partnership or corporation should be
dissolved, or if any
12
other such event should occur, before the delivery of the Shares hereunder,
certificates representing the Shares shall be delivered by or on behalf of the
Selling Stockholders in accordance with the terms and conditions of this
Agreement and of the Custody Agreements; and actions taken by the
Attorneys-in-Fact pursuant to the Powers of Attorney shall be as valid as if
such death, incapacity, termination, dissolution or other event had not
occurred, regardless of whether or not the Custodian, the Attorneys-in-Fact, or
any of them, shall have received notice of such death, incapacity, termination,
dissolution or other event.
2. Subject to the terms and conditions herein set forth, (a) the Company
and each of the Selling Stockholders agree, severally and not jointly, to sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company and each of the Selling Stockholders,
at a purchase price per share of $____, the number of Firm Shares (to be
adjusted by you so as to eliminate fractional shares) determined by multiplying
the aggregate number of Shares to be sold by the Company and each of the Selling
Stockholders as set forth opposite their respective names in Schedule II hereto
by a fraction, the numerator of which is the aggregate number of Firm Shares to
be purchased by such Underwriter as set forth opposite the name of such
Underwriter in Schedule I hereto and the denominator of which is the aggregate
number of Firm Shares to be purchased by all of the Underwriters from the
Company and all of the Selling Stockholders hereunder and (b) in the event and
to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, each of the Selling Stockholders agrees,
severally and not jointly, to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from each of the
Selling Stockholders, at the purchase price per share set forth in clause (a) of
this Section 2, that portion of the number of Optional Shares as to which such
election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by allocating such portion among the Selling
Stockholders as set forth in the second sentence of the next paragraph, and
multiplying such allocated number of Optional Shares by a fraction the numerator
of which is the maximum number of Optional Shares which such Underwriter is
entitled to purchase as set forth opposite the name of such Underwriter in
Schedule I hereto and the denominator of which is the maximum number of Optional
Shares that all of the Underwriters are entitled to purchase hereunder.
The Selling Stockholders, as and to the extent indicated in Schedule II
hereto, hereby grant, severally and not jointly, to the Underwriters the right
to purchase at their election up to 870,000 Optional Shares, at the purchase
price per share set forth in the paragraph above, for the sole purpose of
covering sales of shares in excess of the number of Firm Shares. Any such
election to purchase Optional Shares shall be made in proportion to the maximum
number of Optional Shares to be sold by each Selling Stockholder as set forth in
Schedule II hereto. Any such election to purchase Optional Shares may be
exercised only by written notice from you to the Attorneys-in-Fact, given within
a period of 30 calendar days after the date of this Agreement and setting forth
the aggregate number of Optional Shares to be purchased and the date on which
such Optional Shares are to be delivered, as determined by you but in no event
earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless you and the Attorneys-in-Fact otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in
such names as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. may request upon at least forty-eight
hours' prior notice to the Company and the Selling Stockholders shall be
delivered by or on behalf of the Company and the Selling Stockholders to
▇▇▇▇▇▇▇, Sachs & Co., through the facilities of DTC, for the account of
such Underwriter,
13
against payment by or on behalf of such Underwriter of the purchase price
therefor by wire transfer of Federal (same-day) funds to the account
specified by the Company and the Custodian to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. at
least forty-eight hours in advance. The Company will cause the
certificates representing the Shares to be made available for checking and
packaging at least twenty-four hours prior to the Time of Delivery (as
defined below) with respect thereto at the office of DTC or its designated
custodian ▇▇▇▇▇▇▇, Sachs & Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(the "Designated Office"). The time and date of such delivery and payment
shall be, with respect to the Firm Shares, 9:30 a.m., New York City time,
on ________, 2004 or such other time and date as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., the
Company and the Selling Stockholders may agree upon in writing, and, with
respect to the Optional Shares, 9:30 a.m., New York time, on the date
specified by ▇▇▇▇▇▇▇, Sachs & Co. in the written notice given by ▇▇▇▇▇▇▇,
Sachs & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., the Company
and the Selling Stockholders may agree upon in writing. Such time and date
for delivery of the Firm Shares is herein called the "First Time of
Delivery", such time and date for delivery of the Optional Shares, if not
the First Time of Delivery, is herein called the "Second Time of
Delivery", and each such time and date for delivery is herein called a
"Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross
receipt for the Shares and any additional documents requested by the
Underwriters pursuant to Section 7 hereof, will be delivered at the
offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Closing Location"), and the Shares will
be delivered at the Designated Office, all at such Time of Delivery. A
meeting will be held at the Closing Location at 3:00 p.m., New York City
time, on the New York Business Day next preceding such Time of Delivery,
at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "New York Business
Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file
such Prospectus pursuant to Rule 424(b) under the Act not later than the
Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier
time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or
Prospectus which shall be disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed and to furnish you with copies thereof;
to advise you, promptly after it receives notice thereof, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus, of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or prospectus or suspending any such qualification, promptly to
use its best efforts to obtain the withdrawal of such order;
14
(b) Promptly from time to time to take such action as you may
reasonably request to qualify the Shares for offering and sale under the
securities laws of such jurisdictions as you may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete
the distribution of the Shares, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) As early as practicable on the New York Business Day next
succeeding the date of this Agreement and from time to time, to furnish
the Underwriters with written and electronic copies of the Prospectus in
New York City in such quantities as you may reasonably request, and, if
the delivery of a prospectus is required at any time prior to the
expiration of nine months after the time of issue of the Prospectus in
connection with the offering or sale of the Shares and if at such time any
event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such period to amend or
supplement the Prospectus in order to comply with the Act, to notify you
and upon your request to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many written and electronic
copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales
of any of the Shares at any time nine months or more after the time of
issue of the Prospectus, upon your request but at the expense of such
Underwriter, to prepare and deliver to such Underwriter as many written
and electronic copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and
the rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing
to and including the date 180 calendar days after the date of the
Prospectus, not to offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, Stock, any securities of the Company that
are substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than (i) the Novartis Shares or (ii) pursuant to
employee stock option or purchase plans existing on, or upon the
conversion or exchange of convertible or exchangeable securities
outstanding as of, the date of this Agreement), without your prior written
consent (the foregoing restriction shall not apply to the filing of a
registration statement in respect of Stock provided that the Company
obtains the prior written consent of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.);
(f) To use its reasonable best efforts to cause (i) each of the
Company's directors, officers, members of senior management and all
holders of the Stock to execute and deliver to the Company and to you a
lock-up agreement in substantially the form of Annex III attached hereto
(the "Lock-up Agreement");
15
(g) To furnish or make available to its stockholders as soon as
practicable after the end of each fiscal year an annual report (including
a balance sheet and statements of income, stockholders' equity and cash
flows of the Company and its consolidated subsidiaries certified by
independent registered public accountants) and, as soon as practicable
after the end of each of the first three quarters of each fiscal year
(beginning with the fiscal quarter ending after the effective date of the
Registration Statement), to make available to its stockholders
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
(h) During a period of five years from the effective date of the
Registration Statement, to furnish or make available to you copies of all
reports or other communications (financial or other) furnished to
stockholders, and to deliver to you (i) as soon as they are available,
copies of any reports and financial statements furnished to or filed with
the Commission or any national securities exchange on which any class of
securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you may
from time to time reasonably request (such financial statements to be on a
consolidated basis to the extent the accounts of the Company and its
subsidiaries are consolidated in reports furnished to its stockholders
generally or to the Commission);
(i) To use the net proceeds received by it from the sale of the
Shares pursuant to this Agreement in the manner specified in the
Prospectus under the caption "Use of Proceeds";
(j) To use its best efforts to list for quotation the Shares on the
National Association of Securities Dealers Automated Quotations National
Market System ("NASDAQ");
(k) To file with the Commission such information on Form 10-Q or
Form 10-K as may be required by Rule 463 under the Act;
(l) If the Company elects to rely upon Rule 462(b), the Company
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the
date of this Agreement, and the Company shall at the time of filing either
pay to the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Act;
(m) Upon request of any Underwriter, to furnish, or cause to be
furnished, to such Underwriter an electronic version of the Company's
trademarks, servicemarks and corporate logo for use on the website, if
any, operated by such Underwriter for the purpose of facilitating the
on-line offering of the Shares (the "License"); provided, however, that
the License shall be used solely for the purpose described above, is
granted without any fee and may not be assigned or transferred;
(n) To place stop transfer orders on any Directed Shares that have
been sold to Participants subject to the three month restriction on sale,
transfer, assignment, pledge or hypothecation imposed by NASD Regulation,
Inc. under its Interpretative Material 2110-1 on free-riding and
withholding to the extent necessary to ensure compliance with the three
month restrictions; and
(o) To comply with all applicable securities and other applicable
laws, rules and regulations in each jurisdiction in which the Directed
Shares are offered in connection with the Directed Share Program.
6. The Company and each of the Selling Stockholders covenant and agree
with one another and with the several Underwriters that (a) the Company will pay
or cause to be paid the following: (i) the fees, disbursements and expenses of
the Company's counsel and the Company's
16
accountants in connection with the registration of the Shares under the Act and
all other expenses in connection with the preparation, printing and filing of
the Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of reproducing any
Agreement among Underwriters, this Agreement, the Blue Sky Memorandum, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Shares; (iii)
all expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky survey;
(iv) all reasonable fees and expenses in connection with listing the Shares on
NASDAQ; (v) the filing fees incident to, and the reasonable fees and
disbursements of counsel for the Underwriters in connection with, securing any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Shares; (vi) all fees and disbursements of counsel
incurred by the Underwriters in connection with the Directed Share Program and
stamp duties, similar taxes or duties or other taxes, if any, incurred by the
Underwriters in connection with the Directed Share Program; (vii) the cost of
preparing stock certificates; (viii) the cost and charges of any transfer agent
or registrar; (ix) all other costs and expenses incident to the performance of
its obligations hereunder which are not otherwise specifically provided for in
this Section; (x) the reasonable fees and expenses of one counsel for the
Selling Stockholders and the fees; and (xi) the fees and expenses of the
Attorneys-in-Fact and the Custodian; and (b) such Selling Stockholder will pay
or cause to be paid all costs and expenses incident to the performance of such
Selling Stockholder's obligations hereunder which are not otherwise specifically
provided for in this Section, including (i) any fees and expenses of counsel for
such Selling Stockholder other than those paid by the Company pursuant to clause
(a)(x), and (ii) all expenses and taxes incident to the sale and delivery of the
Shares to be sold by such Selling Stockholder to the Underwriters hereunder. In
connection with clause (b)(ii) of the preceding sentence, ▇▇▇▇▇▇▇, Sachs & Co.
agrees to pay New York State stock transfer tax, and the Selling Stockholder
agrees to reimburse ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. for associated carrying costs if such
tax payment is not rebated on the day of payment and for any portion of such tax
payment not rebated. It is understood, however, that the Company shall bear, and
the Selling Stockholders shall not be required to pay or to reimburse the
Company for, the cost of any other matters not directly relating to the sale and
purchase of the Shares pursuant to this Agreement, and that, except as provided
in this Section, and Sections 8 and 12 hereof, the Underwriters will pay all of
their own costs and expenses, including the fees of their counsel, stock
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company and of the Selling Stockholders herein are, at and as of such Time
of Delivery, true and correct, the condition that the Company and the Selling
Stockholders shall have performed all of its and their obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; if the Company has elected to rely upon Rule
462(b), the Rule 462(b) Registration Statement shall have become effective
by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no
stop order suspending the effectiveness of the Registration Statement or
any part thereof shall have been issued and no proceeding for that purpose
shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall
have been complied with to your reasonable satisfaction;
17
(b) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, U.S. counsel for the Underwriters,
shall have furnished to you such written opinion or opinions, dated such
Time of Delivery, with respect to such matters as you may reasonably
request, and such counsel shall have received such papers and information
as they may reasonably request to enable them to pass upon such matters;
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, counsel for the
Company, shall have furnished to you their written opinion (a draft of
such opinion is attached as Annex II(a) hereto), dated such Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State of Delaware with corporate power and authority to own its
properties and conduct its business as described in the Prospectus.
(ii) Idenix Massachusetts has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the Commonwealth of Massachusetts; and all of the issued shares of
capital stock of Idenix Massachusetts have been duly and validly
authorized and issued, are fully paid and non-assessable, and are
owned of record by the Company and, to such counsel's knowledge,
free and clear of all liens, encumbrances, equities or claims.
(iii) The Company has been duly qualified as a foreign
corporation for the transaction of business and is in good standing
under the laws of the Commonwealth of Massachusetts.
(iv) The Company has an authorized capitalization as set forth
in the Prospectus under the caption "Description of Capital Stock";
at the First Time of Delivery, all the outstanding shares of Stock,
and all of the issued shares of capital stock of the Company
(including the Shares and the Novartis Shares being delivered at
such Time of Delivery) have been duly and validly authorized and
issued and are fully paid and non-assessable; and the Shares and the
Novartis Shares conform to the description of the Stock contained in
the Prospectus under the caption "Description of Capital Stock".
(v) To such counsel's knowledge and other than as set forth in
the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party
or of which any property of the Company or any of its subsidiaries
is the subject that is required by the Act or the rules and
regulations thereunder to be described in the Registration Statement
or the Prospectus that is not so described; and, to the best of such
counsel's knowledge, no such proceedings have been threatened or
contemplated by governmental authorities or threatened by others.
(vi) This Agreement and the Novartis Purchase Agreements have
been duly authorized, executed and delivered by the Company.
(vii) The execution, delivery and performance of this
Agreement and the Novartis Purchase Agreements by the Company, the
issue and sale of the Shares and the Novartis Shares being delivered
at such Time of Delivery to be sold by the Company and the
compliance by the Company with all of the provisions of this
Agreement and the Novartis Purchase Agreements and the consummation
of the transactions herein and therein contemplated has not and will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, and will not
conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a
18
party or by which the Company or any of its subsidiaries is bound or
to which any of the property or assets of the Company or any of its
subsidiaries is subject that was filed as an exhibit to the
Registration Statement, nor will such action result in any violation
of the provisions of the Restated Certificate of Incorporation or
By-Laws of the Company, as currently in effect and as amended
(effective as of the First Time of Delivery), or any applicable U.S.
Federal or Massachusetts State law or the Delaware General
Corporation Law statute or any order, rule, regulation, judgment or
decree of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of
their properties, which in such counsel's experience is applicable
in transactions of the type contemplated by this Agreement and the
Novartis Purchase Agreements.
(viii) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body is required for the issue and sale of the Shares or
the Novartis Shares or the consummation by the Company of the
transactions contemplated by this Agreement or the Novartis Purchase
Agreements under the laws of the Commonwealth of Massachusetts, the
Delaware General Corporation Law and the federal laws of the United
States of America, except the registration under the Act of the
Shares, and such consents, approvals, authorizations, registrations
or qualifications as may be required by the National Association of
Securities Dealers, Inc., or under state securities or Blue Sky laws
in connection with the purchase and distribution of the Shares by
the Underwriters and the Novartis Shares by Novartis.
(ix) The statements set forth in the Prospectus under the
captions "Risk Factors - Risks Related to Development, Clinical
Testing and Regulatory Approval of Our Drug Candidates", "Business -
Pharmaceutical Pricing and Reimbursement", "Business - Regulatory
Matters", "Description of Capital Stock", "Shares Eligible for
Future Sale", "Material U.S. Federal Tax Consequences for Non-U.S.
Holders of Our Common Stock" and "Underwriting", in each case
insofar as such statements constitute matters of law or legal
conclusions or summarize the terms of agreements, are correct in all
material respects.
(x) The Company is not and, after giving effect to the
offering and sale of the Shares and the Novartis Shares being sold
by the Company, will not be an "investment company," as such term is
defined in the Investment Company Act.
(xi) The Registration Statement and the Prospectus and any
further amendments and supplements thereto made by the Company prior
to such Time of Delivery (other than the financial statements and
related schedules therein, as to which we express no opinion) comply
as to form in all material respects with the requirements of the Act
and the rules and regulations thereunder.
In connection with the preparation of the Registration Statement and
the Prospectus, such counsel has participated in conferences with officers
and representatives of the Company, counsel for the Underwriters and the
independent accountants of the Company, at which conferences such counsel
made inquiries of such persons and others and discussed the contents of
the Registration Statement and the Prospectus. While the limitations
inherent in the independent verification of factual matters and the
character of determinations involved in the registration process are such
that such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
subject to the foregoing and based on such participation, inquiries and
discussions, no facts have come to such counsel's attention which have
caused such counsel to believe that the Registration Statement, as of
19
the effective date (but after giving effect to changes incorporated
pursuant to Rule 430A under the Act), contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading (except that such counsel expresses no such view with respect
to the financial statements, including the notes and schedules thereto, or
any other financial or accounting data included therein), or that the
Prospectus, as of the date it was filed with the Commission pursuant to
Rule 424(b)(4) under the Act or as of the date hereof, contained any
untrue statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading (except that such
counsel expresses no such view with respect to the financial statements,
including the notes and schedules thereto, or any other financial or
accounting data included therein). Such counsel shall be entitled to rely
in respect of their opinion on certain matters of fact upon certificates
of officers of the Company or its subsidiaries, and certificates of
officers of Novartis, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such
certificates and shall provide you with original signed copies of such
certificates.
(d) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Executive Vice President, Legal and
Administration, and general counsel of the Company, shall have furnished
to you her written opinion (a draft of such opinion is attached as Annex
II(b) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware. The Company was previously incorporated in the Cayman
Islands under the name of Novirio Pharmaceuticals Limited ("Novirio
Limited"), which was subsequently changed in the Cayman Islands to
Idenix Pharmaceuticals, Inc. The Company domesticated into the State
of Delaware from the Cayman Islands under the name of Idenix
Pharmaceuticals, Inc. pursuant to Section 388 of the DGCL.
(ii) The Company is a party to the UDSC Coorperative Agreement
and the UDSC License Agreement, having all of the rights and
obligations of Novirio Limited thereunder.
(iii) Novirio SARL, a corporation organized under the laws of
France and which changed its corporate name to Idenix SARL, is an
indirect, wholly-owned subsidiary of the Company.
(iv) Neither the Company nor Idenix Massachusetts nor, to such
counsel's knowledge, Idenix Cayman, Idenix France or Idenix B.V. is
in violation of its certificate of incorporation, by-laws,
memorandum, articles of association or other governing documents (as
applicable) or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in
any indenture, mortgage, deed of trust, loan agreement, lease or
other material agreement or material instrument to which it is a
party or by which it or any of its properties may be bound.
(v) The Registration Statement and any amendments thereto have
been duly authorized by and on behalf of the Company and the
Registration Statement has been duly executed pursuant to
authorization by and on behalf of the Company.
(vi) The issue and sale of the Shares and the Novartis Shares
being delivered at such Time of Delivery and the compliance by the
Company with all of the provisions of this Agreement and the
Novartis Purchase Agreements and the consummation of the
transactions herein and therein contemplated has not conflicted with
or resulted in a breach or violation of any of the terms or
provisions of, or constituted a default under, and
20
will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other material
agreement or material instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, and which will
not affect the validity of the Domestication or the transactions
contemplated by this Agreement and the Novartis Purchase Agreements,
nor will such action result in any violation of the provisions of
the Restated Certificate of Incorporation or By-Laws of the Company,
as currently in effect and as amended (effective as of the First
Time of Delivery), or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or
any of their properties.
(vii) To the best of such counsel's knowledge and other than
as set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property of the Company or any of its
subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect; and, to the best of such
counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(viii) Real property and buildings held under lease by the
Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company and its
subsidiaries.
(ix) To the best of such counsel's knowledge, none of the
research and development efforts of the Company's Drug Discovery
Network concerning the Drug Candidates has infringed or is
infringing any third party patent rights.
(x) The statements set forth in the Prospectus under the
captions "Risk Factors - Risks Related to Our Relationship with
Novartis", "Business - Collaborations", "Relationship with
Novartis", "Management", "Certain Relationships and Related Party
Transactions", "Description of Capital Stock" and "Shares Eligible
for Future Sale", insofar as they purport to describe the provisions
of the laws and documents referred to therein, are correct in all
material respects.
In connection with the preparation of the Registration Statement and
the Prospectus, such counsel has participated in conferences with officers
and representatives of the Company, counsel for the Underwriters and the
independent accountants of the Company, at which conferences such counsel
made inquiries of such persons and others and discussed the contents of
the Registration Statement and the Prospectus. While the limitations
inherent in the independent verification of factual matters and the
character of determinations involved in the registration process are such
that such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus,
subject to the foregoing and based on such participation, inquiries and
discussions, no facts have come to such counsel's attention which have
caused such counsel to believe that the Registration Statement, as of the
effective date (but after giving effect to changes incorporated pursuant
to Rule 430A under the Act), contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading
(except that such counsel expresses no such view with respect to the
financial statements, including the notes and schedules thereto, or any
other financial or accounting
21
data included therein), or that the Prospectus, as of the date it was
filed with the Commission pursuant to Rule 424(b)(4) under the Act or as
of the date hereof, contained any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading (except that such counsel expresses no such view with
respect to the financial statements, including the notes and schedules
thereto, or any other financial or accounting data included therein).
(e) King & Spalding LLP, special patent counsel for the Company,
shall have furnished to the Representatives such written opinion or
opinions, dated each Time of Delivery, in the form of Annex II(c) hereto
or otherwise in form and substance satisfactory to the Representatives.
(f) ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇ LLP, special patent
counsel for the Company, shall have furnished to you their written opinion
(a draft of such opinion is attached as Annex II(d) hereto), dated such
Time of Delivery, in form and substance satisfactory to you, to the effect
that:
(i) The United States Patent and Trademark Office and/or a
United States court of competent jurisdiction, properly apprised of
the relevant law and facts, should find that claim 1 of U.S. Patent
Application Serial Number 09/879,854, filed June 12, 2001, as
published as U.S. Patent Application Publication US 2002/0107221 A1,
is unpatentable under current U.S. patent law.
(ii) The United States Patent and Trademark Office and/or a
United States court of competent jurisdiction, properly apprised of
the relevant law and facts, should find that the disclosure of U.S.
Application Serial Number 09/879,854, filed June 12, 2001 or
09/112,878, filed July 9, 1998 or 08/485,716, filed June 7, 1995 or
08/320,461, filed October 7, 1994 does not provide adequate written
description as required by 35 U.S.C. Section 112, first paragraph,
under current United States patent law, to support the proposed
claims provided to the Company's General Counsel at a meeting held
on January 26, 2004, which claims are attached hereto as Exhibit A
and discussed on page 27 of the Prospectus.
(iii) The United States Patent and Trademark Office and/or a
United States court of competent jurisdiction, properly apprised of
the relevant law and facts, should find that neither U.S.
Application Serial Number 09/879,854 nor WO 96/40164 anticipates
under 35 U.S.C.Section 102 or renders obvious under 35 U.S.C.Section
103, under current United States law, any claim of U.S. Patent Nos.
6,566,344, 6,444,652, 6,395,716, and 6,569,837 that recites the use
of telbivudine for the treatment of HBV.
(g) ▇▇▇▇ & Associes, special French counsel for the Company, shall
have furnished to the Representatives such written opinion or opinions,
dated each Time of Delivery, in the form of Annex II(e) hereto or
otherwise in form and substance satisfactory to the Representatives.
(h) Bird & Bird, special Italian counsel for the Company, shall have
furnished to the Representatives such written opinion or opinions, dated
each Time of Delivery, in the form of Annex II(f) hereto or otherwise in
form and substance satisfactory to the Representatives.
(i) The respective counsel for each of the Selling Stockholders, as
indicated in Schedule II hereto, each shall have furnished to you their
written opinion with respect to each of the Selling Stockholders for whom
they are acting as counsel (a draft of each such opinion is attached as
Annex II(g) hereto), dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:
22
(i) A Custody Agreement and, other than in the case of
Biomedical, a Power-of-Attorney have been duly executed and
delivered by such Selling Stockholder. The Power-of-Attorney
constitutes a valid and binding instrument of such Selling
Stockholder (other than Biomedical) in accordance with its terms and
the Custody Agreement constitutes a valid and binding agreement of
such Selling Stockholder in accordance with its terms;
(ii) This Agreement has been duly executed and delivered by or
on behalf of such Selling Stockholder; and the sale of the Shares to
be sold by such Selling Stockholder hereunder and the compliance by
such Selling Stockholder with all of the provisions of this
Agreement, the Power-of-Attorney (other than in the case of
Biomedical), and the Custody Agreement and the consummation of the
transactions herein and therein contemplated will not (a) result in
a breach or violation of any terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which such Selling Stockholder is a party or by which such Selling
Stockholder is bound or to which any of the property or assets of
such Selling Stockholder is subject, (b) result in any violation of
the provisions of the certificate of incorporation or by-laws of
such Selling Stockholder if such Selling Stockholder is a
corporation, the partnership agreement of such Selling Stockholder
if such Selling Stockholder is a partnership or the other governing
documents of such Selling Stockholder if such Selling Stockholder is
not a corporation or a partnership, or any order known to such
counsel of any court or governmental agency or body having
jurisdiction over such Selling Stockholder or the property of such
Selling Stockholder, or (c) conflict or violate any applicable law
or any rule or regulation of any governmental agency or body having
jurisdiction over such Selling Stockholder;
(iii) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement in
connection with the Shares to be sold by such Selling Stockholder
hereunder, except such as have been obtained under the Act and such
as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of such Shares by the
Underwriters;
(iv) Immediately prior to such Time of Delivery, such Selling
Stockholder had good and valid title to the Shares to be sold at
such Time of Delivery by such Selling Stockholder under this
Agreement, free and clear of all liens, encumbrances, equities or
claims, and full right, power and authority to sell, assign,
transfer and deliver the Shares to be sold by such Selling
Stockholder hereunder; and
(v) Upon (i) receipt by DTC or a nominee (other than a
securities intermediary) acting on its behalf, of each of the stock
certificates representing the Shares to be sold by such Selling
Stockholder, duly indorsed in blank or together with stock powers
duly executed in blank, (ii) the crediting by DTC of such Shares to
securities accounts of each of the Underwriters by book entries, and
(iii) payment for such Shares by each of the Underwriters pursuant
to this Agreement, and assuming that neither DTC nor any of the
Underwriters has notice of any adverse claim to such Shares, then
(A) DTC will be a protected purchaser of such Shares, (B) each
Underwriter will acquire a valid security entitlement in respect of
such Shares credited to its securities account, and (C) no action
based on an adverse claim to any of such Shares credited to such
Underwriter's account may be asserted against such Underwriter with
respect to such securities entitlement.
23
In rendering the opinion in paragraph (iv), such counsel may
rely upon a certificate of such Selling Stockholder in respect of matters
of fact as to ownership of, and liens, encumbrances, equities or claims
on, the Shares sold by such Selling Stockholder, provided that such
counsel shall state that they believe that both you and they are justified
in relying upon such certificate;
(j) On the date of the Prospectus at a time prior to the execution
of this Agreement, at 9:30 a.m., New York City time, on the effective date
of any post-effective amendment to the Registration Statement filed
subsequent to the date of this Agreement and also at each Time of
Delivery, PricewaterhouseCoopers LLP shall have furnished to you a letter
or letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, to the effect set forth in Annex I hereto
(the executed copy of the letter delivered prior to the execution of this
Agreement is attached as Annex I(a) hereto and a draft of the form of
letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(k) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included in the Prospectus any loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus, and (ii) since the respective dates as of which information is
given in the Prospectus there shall not have been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries
or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case
described in clause (i) or (ii), is in the judgment of the Representatives
so material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Shares being
delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(l) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities, if any are
outstanding, by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of
Rule 436(g)(2) under the Act, and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Company's debt securities,
if any are outstanding;
(m) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange or on NASDAQ; (ii) a
suspension or material limitation in trading in the Company's securities
on NASDAQ; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities or a material
disruption in commercial banking or securities settlement or clearance
services in the United States; (iv) the outbreak or escalation of
hostilities involving the United States or the declaration by the United
States of a national emergency or war or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic
conditions in the United States or elsewhere, if the effect of any such
event specified in clause (iv) or (v) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Shares being delivered at such Time
of Delivery on the terms and in the manner contemplated in the Prospectus;
24
(n) The Shares to be sold at such Time of Delivery shall have been
duly listed for quotation on NASDAQ subject to notice of issuance;
(o) The Company has obtained and delivered to the Underwriters
executed copies of the Lock-up Agreement from each of the directors,
officers, members of senior management, of the Company and stockholders of
the Company who collectively own substantially all of the Stock in form
and substance satisfactory to the Underwriters;
(p) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New York
Business Day next succeeding the date of this Agreement; and
(q) The Company and the Selling Stockholders shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of the
Company signed by officers of the Company and of the Selling Stockholders
(or, if a Selling Stockholder is an individual, signed by the Selling
Stockholder), respectively, satisfactory to you as to the accuracy of the
representations and warranties of the Company and the Selling
Stockholders, respectively, herein at and as of such Time of Delivery, as
to the performance by the Company and the Selling Stockholders of all of
their respective obligations hereunder to be performed at or prior to such
Time of Delivery, as to the matters set forth in subsections (a) and (k)
of this Section and as to such other matters as you may reasonably
request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any reasonable
legal or other expenses incurred by such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration Statement
or the Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein.
(b) Each of the Selling Stockholders will, severally and not jointly,
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company by such Selling Stockholder expressly for use therein;
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that such
Selling Stockholder shall not be liable in any such case to the extent
25
that any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the Prospectus
or any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Company by any Underwriter through ▇▇▇▇▇▇▇,
Sachs & Co. expressly for use therein; provided, further, that the liability of
such Selling Stockholder pursuant to this subsection 8(b) shall not exceed the
product of (a) the number of shares sold by such Selling Stockholder pursuant to
this Agreement, including any Optional Shares, and (b) the initial public
offering price of the Shares as set forth on the cover page of the Prospectus.
(c) Each Underwriter will indemnify and hold harmless the Company and each
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company or such Selling Stockholder may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by such
Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein; and will
reimburse the Company and each Selling Stockholder for any legal or other
expenses reasonably incurred by the Company or such Selling Stockholder in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(d) Promptly after receipt by an indemnified party under subsection (a),
(b) or (c) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or
on behalf of any indemnified party.
(e) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a),
(b) or (c) above in respect of any losses, claims, damages or liabilities (or
actions in respect thereof) referred to therein, then each indemnifying party
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses,
26
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other from the offering of the Shares. If, however, the allocation provided by
the immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (d) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and the
Selling Stockholders on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Stockholders on the one hand and the Underwriters on the
other shall be deemed to be in the same proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company and the
Selling Stockholders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the Prospectus. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Stockholders on
the one hand or the Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, each of the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (e) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (e). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (e) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (e), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Selling
Stockholder shall be required to contribute in excess of an amount equal to the
product of (i) the number of shares sold by such Selling Stockholder, including
any Optional Shares, and (ii) the initial public offering price of the Shares as
set forth on the cover page of the Prospectus. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this subsection (e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company and the Selling Stockholders under this
Section 8 shall be in addition to any liability which the Company and the
respective Selling Stockholders may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company (including any person
who, with his or her consent, is named in the Registration Statement as about to
become a director of the Company) and to each person, if any, who controls the
Company or any Selling Stockholder within the meaning of the Act.
9. (a) The Company agrees to indemnify and hold harmless ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and its affiliates and each person, if any, who controls ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ or its
affiliates within the meaning of either Section 15 of the Act or Section 20 of
the Securities Exchange Act of 1934 ("▇▇▇▇▇▇ ▇▇▇▇▇▇▇
27
Entities"), from and against any and all losses, claims, damages and liabilities
(including, without limitation, any reasonable legal or other expenses incurred
in connection with defending or investigating any such action or claim) (i)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any material prepared by or with the consent of the Company for
distribution to Participants in connection with the Directed Share Program, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; (ii) caused by the failure of any Participant to pay for and accept
delivery of Directed Shares that the Participant has agreed to purchase; or
(iii) related to, arising out of, or in connection with the Directed Share
Program other than losses, claims, damages or liabilities (or expenses relating
thereto) that are finally judicially determined to have resulted from the bad
faith or gross negligence of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities.
(b) In case any proceeding (including any governmental investigation)
shall be instituted involving any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity in respect of which
indemnity may be sought pursuant to Section 9(a), the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity
seeking indemnity shall promptly notify the Company in writing and the Company,
upon request of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity, shall retain counsel reasonably
satisfactory to the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity to represent the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity
and any others the Company may designate in such proceeding and shall pay the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity unless (I) the Company shall have agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Company and the ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Entity and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. The
Company shall not, in respect of the legal expenses of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Entities in connection with any proceeding or related proceedings the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities. Any such
firm for the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities shall be designated in writing by ▇▇▇▇▇▇
▇▇▇▇▇▇▇. The Company 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 Company agrees to indemnify the
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time a
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity shall have requested the Company to reimburse it for fees
and expenses of counsel as contemplated by the second and third sentences of
this paragraph, the Company agrees that it 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 Company of the aforesaid
request and (ii) the Company shall not have reimbursed the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity
in accordance with such request prior to the date of such settlement. The
Company shall not, without the prior written consent of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, effect
any settlement of any pending or threatened proceeding in respect of which any
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity is or could have been a party and indemnity could have
been sought hereunder by such ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity, unless such settlement
includes an unconditional release of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities from all
liability on claims that are the subject matter of such proceeding.
(c) To the extent the indemnification provided for in Section 9(a) is
unavailable to a ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then the Company, in lieu of
indemnifying the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity thereunder, shall contribute to the
amount paid or payable by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity 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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities on the other hand from the offering of the Directed
Shares or (ii) if the allocation provided by clause 9(c)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 9(c)(i) above but also the
relative fault of the Company on the one hand and of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
28
Entities on the other hand 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 of the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities on the other hand in
connection with the offering of the Directed Shares shall be deemed to be in the
same respective proportions as the net proceeds from the offering of the
Directed Shares (before deducting expenses) and the total underwriting discounts
and commissions received by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities for the Directed Shares,
bear to the aggregate initial public offering price of the Shares as set forth
on the cover page of the Prospectus. If the loss, claim, damage or liability is
caused by an untrue or alleged untrue statement of a material fact, the relative
fault of the Company on the one hand and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities on the
other hand shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement or the omission or alleged omission relates
to information supplied by the Company or by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(d) The Company and the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities agree that it would not be
just or equitable if contribution pursuant to this Section 9 were determined by
pro rata allocation (even if the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities were treated as one
entity for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in Section 9(c). The amount
paid or payable by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entities as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Entities in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity shall
be required to contribute any amount in excess of the amount by which the total
price at which the Directed Shares distributed to the public were offered to the
public exceeds the amount of any damages that such ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. The remedies provided for in this
Section 9 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity at law or in equity.
(e) The indemnity and contribution provisions contained in this Section 9
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Entity or the Company, its officers or directors or any
person controlling the Company and (iii) acceptance of and payment for any of
the Directed Shares.
10. (a) If any Underwriter shall default in its obligation to purchase the
Shares which it has agreed to purchase hereunder at a Time of Delivery, you may
in your discretion arrange for you or another party or other parties to purchase
such Shares on the terms contained herein. If within thirty-six hours after such
default by any Underwriter you do not arrange for the purchase of such Shares,
then the Company and the Selling Stockholders shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to you to purchase such Shares on such terms. In the event
that, within the respective prescribed periods, you notify the Company and the
Selling Stockholders that you have so arranged for the purchase of such Shares,
or the Company and the Selling Stockholders notify you that they have so
arranged for the purchase of such Shares, you or the Company and the Selling
Stockholders shall have the right to postpone a Time of Delivery for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectus which in your
reasonable opinion may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted
29
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased does not exceed one-eleventh of
the aggregate number of all the Shares to be purchased at such Time of Delivery,
then the Company and the Selling Stockholders shall have the right to require
each non-defaulting Underwriter to purchase the number of Shares which such
Underwriter agreed to purchase hereunder at such Time of Delivery and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Shares which such Underwriter agreed to purchase
hereunder) of the Shares of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company and
the Selling Stockholders as provided in subsection (a) above, the aggregate
number of such Shares which remains unpurchased exceeds one-eleventh of the
aggregate number of all of the Shares to be purchased at such Time of Delivery,
or if the Company and the Selling Stockholders shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement
(or, with respect to the Second Time of Delivery, the obligations of the
Underwriters to purchase and of the Selling Stockholders to sell the Optional
Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company or the Selling Stockholders, except
for the expenses to be borne by the Company and the Selling Stockholders and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
11. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Selling Stockholders and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Company, or any of the Selling Stockholders, or any officer
or director or controlling person of the Company, or any controlling person of
any Selling Stockholder, and shall survive delivery of and payment for the
Shares.
12. If this Agreement shall be terminated pursuant to Section 10 hereof,
neither the Company nor the Selling Stockholders shall then be under any
liability to any Underwriter except as provided in Sections 6, 8 and 9 hereof;
but, if for any other reason any Shares are not delivered by or on behalf of the
Company and the Selling Stockholders as provided herein, the Company will
reimburse the Underwriters through you for all out-of-pocket expenses approved
in writing by you, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of the Shares not so delivered, but the Company and the Selling
Stockholders shall then be under no further liability to any Underwriter in
respect of the Shares not so delivered except as provided in Sections 6, 8 and 9
hereof.
13. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by ▇▇▇▇▇▇▇, Sachs & Co. on behalf of you as the
representatives; and in all dealings with any Selling Stockholder hereunder, you
and the Company shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf
30
of such Selling Stockholder made or given by any or all of the Attorneys-in-Fact
for such Selling Stockholder.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co., ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Registration
Department; if to any Selling Stockholder shall be delivered or sent by mail,
telex or facsimile transmission to counsel for such Selling Stockholder at its
address set forth in Schedule II hereto; and if to the Company shall be
delivered or sent by mail, telex or facsimile transmission to the address of the
Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(d) hereof shall
be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire or telex
constituting such Questionnaire, which address will be supplied to the Company
or the Selling Stockholders by you on request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
14. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and the Selling Stockholders and, to the
extent provided in Sections 8 and 11 hereof, the officers and directors of the
Company and each person who controls the Company, any Selling Stockholder or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Shares from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
15. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
16. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
17. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
18. The Company and the Selling Stockholders are authorized, subject to
applicable law, to disclose any and all aspects of this potential transaction
that are necessary to support any U.S. federal income tax benefits expected to
be claimed with respect to such transaction, and all materials of any kind
(including tax opinions and other tax analyses) related to those benefits,
without the Underwriters imposing any limitation of any kind.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Company and each of the Representatives plus one for
each counsel and the Custodian, counterparts hereof, and upon the acceptance
hereof by you, on behalf of each of the Underwriters, this letter and such
acceptance hereof shall constitute a binding agreement among each of the
Underwriters, the Company and each of the Selling Stockholders. It is understood
that your acceptance of this letter on behalf of each of the Underwriters is
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company and the Selling Stockholders
for examination, upon request, but without warranty on your part as to the
authority of the signers thereof.
31
Any person executing and delivering this Agreement as Attorney-in-Fact for
a Selling Stockholder represents by so doing that he has been duly appointed as
Attorney-in-Fact by such Selling Stockholder pursuant to a validly existing and
binding Power-of-Attorney which authorizes such Attorney-in-Fact to take such
action.
Very truly yours,
Idenix Pharmaceuticals, Inc.
By: ..........................................
▇▇▇▇-▇▇▇▇▇▇ Sommadossi, Ph.D.
President, Chief Executive Officer and
Chairman of the Board of Directors
Adroit Private Equity (Offshore) Ltd.
BB BioVentures L.P.
Cloppenburg Automobil AG
Cloppenburg Immobil AG
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Hanseatic Americas LDC
KB Lux Venture Capital Fund - Biotechnology
▇▇▇▇▇ ▇▇▇▇
MPM Asset Management Investors 1998 LLC
MPM Bioventures Parallel Fund, ▇.▇.
▇▇▇▇▇▇ International plc
TVM V Life Sciences Ventures GmbH & Co. KG
TVM Medical Ventures GmbH & Co. KG
By: ..........................................
▇▇▇▇-▇▇▇▇▇▇ Sommadossi, Ph.D.
President, Chief Executive Officer and
Chairman of the Board of Directors
As Attorney-in-Fact acting on
behalf of each of the Selling
Stockholders named in Schedule II
to this Agreement.
Biomedical Sciences Investment Fund PTE Ltd.
By: ..........................................
Name:
Title:
32
Accepted as of the date hereof:
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Bear ▇▇▇▇▇▇▇ & Co. Inc.
By: ..............................................
(▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.)
On behalf of each of the Underwriters
33
SCHEDULE I
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF PURCHASED IF
FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------- --------------- ---------
▇▇▇▇▇▇▇, Sachs & Co...............................................
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated.................................
Bear ▇▇▇▇▇▇▇ & Co. Inc. ..........................................
--------- -------
Total........................................... 5,800,000 870,000
========= =======
SCHEDULE II
NUMBER OF OPTIONAL
SHARES TO BE
TOTAL NUMBER OF SOLD IF
FIRM SHARES MAXIMUM OPTION
TO BE SOLD EXERCISED
---------- ---------
The Company ................................................. 4,600,000 ____
The Selling Stockholders:
Adroit Private Equity (Offshore) Ltd.(a) ...... 156,119 113,186
BB BioVentures L.P.(b) ........................ 462,317 335,180
Biomedical Sciences Investment Fund PTE Ltd.(c) 156,119 113,186
Cloppenburg Automobil AG(d) ................... 24,354 17,657
Cloppenburg Immobil AG(d) ..................... 14,613 10,594
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇(b) ............................ 1,932 1,401
Hanseatic Americas LDC(e) ..................... 86,957 63,043
KB Lux Venture Capital Fund - Biotechnology(f) 34,409 24,947
▇▇▇▇▇ ▇▇▇▇(g) ................................. 9,741 7,063
MPM Asset Management Investors 1998 LLC(b) 5,846 4,239
MPM Bioventures Parallel Fund, L.P.(b) ........ 40,208 29,151
Nomura International plc(f) ................... 100,277 72,700
TVM V Life Sciences ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇. ▇▇(▇) 41,746 30,267
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇. ▇▇(▇) ......... 65,361 47,387
--------- -------
Total..................................................... 5,800,000 870,000
========= =======
(a) This Selling Stockholder is represented by ▇▇▇▇▇▇ & Dodge LLP, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and ▇▇▇▇▇▇ and Calder,
▇▇▇▇▇▇ House, South Church Street, Grand Cayman, Cayman Islands, and has
appointed ▇▇▇▇-▇▇▇▇▇▇ Sommadossi and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and each of them, as
the Attorneys-in-Fact for such Selling Stockholder.
(b) This Selling Stockholder is represented by ▇▇▇▇▇▇ & Dodge LLP, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and has appointed
▇▇▇▇-▇▇▇▇▇▇ Sommadossi and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and each of them, as the
Attorneys-in-Fact for such Selling Stockholder.
(c) This Selling Stockholder is represented by ▇▇▇▇▇▇ & Dodge LLP, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and the General Counsel of
such Selling Stockholder.
(d) This Selling Stockholder is represented by ▇▇▇▇▇▇ & Dodge LLP, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and Holme ▇▇▇▇▇▇▇ & ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇, ▇-▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, and has appointed ▇▇▇▇-▇▇▇▇▇▇
Sommadossi and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and each of them, as the Attorneys-in-Fact
for such Selling Stockholder.
(e) This Selling Stockholder is represented by ▇▇▇▇▇▇ & Dodge LLP, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇▇▇ and English, LLP,
Four Gateway Center, ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, and ▇▇▇▇▇▇ ▇▇▇▇▇,
Fort Nassau Centre, Nassau, The Bahamas, and has appointed ▇▇▇▇-▇▇▇▇▇▇
Sommadossi and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and each of them, as the Attorneys-in-Fact
for such Selling Stockholder.
(f) This Selling Stockholder is represented by ▇▇▇▇▇▇ & Dodge LLP, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and the General Counsel of
such Selling Stockholder, and has appointed ▇▇▇▇-▇▇▇▇▇▇ Sommadossi and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, and each of them, as the Attorneys-in-Fact for such Selling
Stockholder.
(g) This Selling Stockholder is represented by ▇▇▇▇▇▇ & Dodge LLP, ▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, and ________, and has
appointed ▇▇▇▇-▇▇▇▇▇▇ Sommadossi and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and each of them, as
the Attorneys-in-Fact for such Selling Stockholder.
ANNEX I
FORM OF COMFORT LETTER
IN RELATION TO THE COMPANY AND ITS SUBSIDIARIES
Pursuant to Section 7(j) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect
to the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules (and, if applicable,
financial forecasts and/or pro forma financial information) examined by
them and included in the Prospectus or the Registration Statement comply
as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the unaudited consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified in such
letter, as indicated in their reports thereon, copies of which have been
furnished to the representatives of the Underwriters (the
"Representatives") and are attached hereto;
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of which and are
attached hereto and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i)
below comply as to form in all material respects with the applicable
accounting requirements of the Act and the related published rules and
regulations, nothing came to their attention that cause them to believe
that the unaudited condensed consolidated financial statements do not
comply as to form in all material respects with the applicable accounting
requirements of the Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to
the consolidated results of operations and financial position of the
Company for the five most recent fiscal years included in the Prospectus
agrees with the corresponding amounts (after restatements where
applicable) in the audited consolidated financial statements for such five
fiscal years which were included or incorporated by reference in the
Company's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came
to their attention as a result of the foregoing procedures that caused
them to believe that this information does not conform in all material
respects with the disclosure requirements of Items 301, 302, 402 and
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of the
latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements
included in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash
flows included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the related published rules and regulations, or (ii) any
material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus for
them to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any such
unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements included in
the Prospectus;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived any unaudited
condensed financial statements referred to in clause (A) and any
unaudited income statement data and balance sheet items included in
the Prospectus and referred to in clause (B) were not determined on
a basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of
the Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock
upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of convertible
securities, in each case which were outstanding on the date of the
latest financial statements included in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included in the Prospectus, except in each case
for changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
decreases or increases which the Prospectus discloses have occurred
or may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and (vi)
above, they have carried out certain specified procedures, not constituting an
examination in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information specified by
the Representatives, which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus, or in Part II
of, or in exhibits and schedules to, the Registration Statement specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
ANNEX II(A)
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ AND ▇▇▇▇ LLP
(COUNSEL TO THE COMPANY)
ANNEX II(B)
FORM OF OPINION OF GENERAL COUNSEL OF THE COMPANY
ANNEX II(C)
FORM OF OPINION OF KING & SPALDING LLP
(SPECIAL PATENT COUNSEL TO THE COMPANY)
_______, 2004
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
Bear ▇▇▇▇▇▇▇ & Co. Inc.,
As representatives of the several Underwriters
named in Schedule I to the Underwriting Agreement,
c/o Goldman, ▇▇▇▇▇ & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Ladies and Gentlemen:
We are and have been patent counsel to Idenix Pharmaceuticals, Inc., a
Delaware corporation, formerly Novirio Pharmaceuticals Limited, an exempted
company incorporated in the Cayman Islands with limited liability (the
"Company"), and we represent the Company in connection with the sale by the
Company and the Selling Stockholders named in Schedule II to the Underwriting
Agreement (the "Selling Stockholders") to the Underwriters named in Schedule I
to the Underwriters Agreement (the "Underwriters") of an aggregate of ______
shares (the "Firm Shares") and, at the election of the Underwriters, up to
______ additional shares (the "Optional Shares" and, together with the Firm
Shares, the "Shares") of common stock, par value $0.001 per share ("Stock"), of
the Company. This opinion is being rendered to you pursuant to Section 7(e) of
the Underwriting Agreement in connection with the closing of the sale of the
Shares. Capitalized terms not otherwise defined herein shall have the meanings
given to them in the Underwriting Agreement, dated _______, 2004, among the
Company, the Selling Stockholders and you, as representatives of the
Underwriters.
The Company has asked us to review the statements in the Registration
Statement and Prospectus under the captions "Risk Factors - Risks Related to
Patents and Licenses" and "Business - Patents and Licenses." We have made this
review, and provide our opinion with respect to these sections below. We have
not been asked to review or comment on any other sections of the Registration
Statement or Prospectus, regardless of whether they explicitly or implicitly
refer to intellectual property or patents in particular.
We are not experts in French law, and thus this letter does not provide
any opinion on matters under French law. A separate opinion concerning the
agreements and relationship among the Company, Centre National de la Recherche
Scientifique ("CNRS") and the University of Montpellier is provided directly to
the addressees by ▇▇▇▇ & Associes, Paris, France.
We are likewise not experts in Italian law, and thus this letter does not
provide any opinion on matters under Italian law. A separate opinion concerning
the agreements and relationship between the Company and the University of
Cagliari is provided directly to the addressees by ▇▇. ▇▇▇▇▇▇▇▇▇▇ of Bird &
Bird, Milan, Italy.
We have advised the Company and the Underwriters that we represent Emory
University in connection with the prosecution of a series of patents and patent
applications claiming priority to
U.S.S.N. 08/485,716 and WO 96/40164, co-owned by Emory University, The
University of Alabama Research Foundation ("UABRF") and CNRS. As described in
the Registration Statement and Prospectus, UABRF has notified the Company that
it believes that it can present and obtain patent claims broadly covering the
use of telbivudine to treat hepatitis B from patent applications claiming
priority to U.S.S.N. 08/485,716 or WO 96/40164. While King & Spalding LLP is not
prosecuting and will not prosecute such claims, this dispute places King &
Spalding LLP in a potential conflict of interest. Therefore, King & Spalding LLP
does not address or provide any opinion on (i) the patentability of claims
covering the use of telbivudine to treat hepatitis B from patent applications
claiming priority to U.S.S.N. 08/485,716 or WO 96/40164; (ii) the Company's
license of or potential infringement of claims covering the use of telbivudine
to treat hepatitis B from patent applications claiming priority to U.S.S.N.
08/485,716 or WO 96/40164; (iii) any claim of ownership of Company patents or
patent applications covering the use of telbivudine to treat hepatitis B by
Emory, UABFR, The University of Alabama ("UAB") or CNRS or (iv) potential
arbitration or litigation between the Company and Emory, UABFR, The University
of Alabama ("UAB") or CNRS relating to patent applications or patents claiming
priority to U.S.S.N. 08/485,716 or WO 96/40164.
We are familiar with (a) the Company's five licensed and co-owned proposed
drug products as described in the table on page 65 of the Registration Statement
and Prospectus ("Drug Candidates"); and (b) the patents and pending patent
applications co-owned by and/or licensed by the Company covering the Drug
Candidates, which are set forth in the patent schedule provided to the
addressees by letter issued by King & Spalding LLP on the date of this opinion
(the "Patent Schedule"). The Patent Schedule has one or more pending patent
applications or issued patents that disclose and contain claims that cover each
of the Company's Drug Candidates or their use as described in the table on page
65 of the Registration Statement and Prospectus.
Except as described above or as disclosed in the Registration Statement or
Prospectus:
(i) To our best knowledge:
(A) none of the pending patent applications set forth in the
Patent Schedule provided to the addressees on the date of issue of this
opinion claiming any of the Drug Candidates or their use, as
appropriate, is under final rejection in the United States or subject
to an appellate process outside the United States, other than as
disclosed in Schedule (i)(A);
(B) no issued third party U.S. patent dominates or interferes
with any issued patent or pending application set forth in the Patent
Schedule claiming any of the Drug Candidates and/or their use, other
than as disclosed in Schedule (i)(B);
(C) no third party U.S. patent application, if issued, will
dominate or interfere with any claim of any of the HBV Drug Candidates
(also referred to as telbivudine and valtorcitabine) and/or their use
in any issued patent or pending application set forth in the Patent
Schedule;
(D) no third party U.S. patent application, if issued, will
dominate or interfere with any claim of any of the HCV Drug Candidates
(also referred to as NM 283 and NV-08B) and/or their use in any issued
patent or pending application set forth in the Patent Schedule and
except as disclosed in Schedule (i)(D);
(E) no claim of a third party U.S. patent or patent
application, if issued, will be infringed by any of the HBV Drug
Candidates and/or their use;
(F) no claim of a third party U.S. patent or patent
application, if issued, will be infringed by any of the HCV Drug
Candidates and/or their use except as disclosed in the Registration
Statement and Prospectus under the captions "Risk Factors - Risks
Related to Patents and Licenses" and "Business - Patents and Licenses
and further in Schedule (i)(F);
(G) there are no third party claims of inventorship, ownership
interest or lien with respect to any of the issued patents or pending
applications set forth in the Patent Schedule, other than as disclosed
in Schedule (i)(G);
(H) the Company's co-assignees and licensors have not received
any notice of infringement of or conflict with the patent rights of any
third party pertaining to the discovery or development of the Drug
Candidates on page 65 of the Registration Statement;
(I) neither the Company nor any of its subsidiaries,
co-assignees or licensors is infringing or otherwise violating any
patent rights of others in the discovery or development of the Drug
Candidates on page 65 of the Registration Statement;
(J) no third party is infringing any of the Company's or its
subsidiaries' or its licensors' issued patents set forth in the Patent
Schedule except as described in Schedule (i)(J);
(K) no third party would be infringing any of the Company's or
its subsidiaries' or its licensors' claims in pending applications
covering Drug Candidates set forth in the Patent Schedule, if issued,
except as disclosed in the Registration Statement and Prospectus under
the captions "Risk Factors - Risks Related to Patents and Licenses,"
"Business - Patents and Licenses" and "Business - Competition";
(L) there are no contracts or other documents material to the
Company's or its subsidiaries' issued patents or pending applications
set forth in the Patent Schedule other than those described in the
Registration Statement and Prospectus;
(M) with respect to U.S. law only, and specifically excepting
all matters under French or Italian law or opined on by Special French
Counsel and Special Italian Counsel, the Company (either directly or
through any of its subsidiaries) has valid, binding and enforceable
licenses ("clear title") to all of the issued patents or pending
applications set forth in the Patent Schedule used to develop and sell
its Drug Candidates in the manner in which it is described in the
Registration Statement and Prospectus;
(N) with respect to U.S. law only, and specifically excepting
all matters under French or Italian law or opined on by Special French
Counsel and Special Italian Counsel, no facts exist which would
preclude the Company or its subsidiaries from having clear title to the
issued patents or pending applications set forth in the Patent
Schedule;
(O) the Company, the Company's subsidiaries, co-assignees and
licensors have complied with the required duty of candor and good faith
in dealing with the PTO, including the duty to disclose to the PTO all
information believed to be material to the patentability of the issued
patents and pending U.S. patent applications set forth in the Patent
Schedule;
(P) there are no facts that would form the basis for a belief
that the Company and its subsidiaries lack any rights or licenses to
use the issued patents and pending U.S. patent applications set forth
in the Patent Schedule and to develop and sell Drug
Candidates as described or proposed by the Company in the Registration
Statement and Prospectus;
(Q) there are no facts which would form a basis for a belief
that the issued patents and pending U.S. patent applications set forth
in the Patent Schedule is unenforceable or invalid, or would be
unenforceable or invalid if issued as patents;
(R) there is no threatened action, suit, proceeding or claim
by others that the Company and its subsidiaries is infringing any
patent right of a third party other than as disclosed on Schedule
(i)(R);
(S) there is no other entity or individual that has any
rights, title or interest in any of the issued patents and pending U.S.
patent applications other than those listed in the Patent Schedule;
(T) the issued patents set forth in the Patent Schedule claim
patentable subject matter under the United States patent laws
encompassing the Drug Candidates and/or their use as described in the
Registration Statement and Prospectus;
(U) the pending applications set forth in the Patent Schedule
disclose or claim patentable subject matter under the United States
patent laws encompassing the Drug Candidates and/or their use as
described in the Registration Statement and Prospectus; and
(V) the U.S. government does not have any right in telbivudine
or valtorcitabine or their use to treat hepatitis.
(ii) The Company and its subsidiaries have one or more pending
patent applications or issued patents that disclose and contain claims
that cover each of the Drug Candidates or their use as described on page
65 in the Registration Statement and the Prospectus;
(iii) Each of the issued patents and pending U.S. patent
applications set forth in the Patent Schedule was properly filed and is
being diligently prosecuted;
(iv) Except as disclosed on Schedule (iv), the Company, its
subsidiaries and licensors, as appropriate, are, or will be in the normal
course of prosecution, identified in the records of the PTO as the holders
of record of the U.S. patents and patent applications set forth in the
Patent Schedule; the Company, its subsidiaries and licensors are similarly
identified in the records of corresponding foreign agencies with respect
to the foreign counterparts of the foregoing as set forth in the Patent
Schedule; and the issued patents and patent applications as set forth in
the Patent Schedule have been assigned to the Company, its subsidiaries or
licensors as appropriate;
(vi)The Company and its subsidiaries have not received any written
notice of infringement of or conflict with the rights of any third party
with respect to any patents;
(vii) There are no legal or governmental proceedings pending against
the Company or its subsidiaries, or to such counsel's knowledge, against
their co-assignees or licensors, relating to the issued patents and patent
applications as set forth in the Patent Schedule, other than PTO review of
pending applications for patents, and no such proceedings are threatened
or contemplated by governmental authorities or others;
(viii) King & Spalding LLP has complied with the required duty of
candor and good faith in dealing with the PTO, including the duty to
disclose to the PTO all information believed to be material to the
patentability of the issued patents and pending U.S. patent applications
set forth in the Patent Schedule;
(ix)The statements set forth in the Prospectus under the captions
"Risk Factors - Risks Related to Patents and Licenses" and "Business -
Patents and Licenses", insofar as they purport to describe the provisions
of the laws and documents referred to therein, are accurate, complete and
fair; and
(x) There is no pending action, suit, proceeding or claim by others
that the Company or any of its subsidiaries is infringing or otherwise
violating any patent right of a third party.
We have reviewed the portions of the Registration Statement and Prospectus
under the captions "Risk Factors -- Risks Related to Patents and Licenses" and "
Business - Patents and Licenses" and any further amendments and supplements
thereto made by the Company prior to ______, 2004, that concern the issued
patents and patent applications set forth in the Patent Schedule and including
licenses and other agreements concerning the patent and patent applications set
forth in the Patent Schedule, and we have no reason to believe that such
portions of either the Registration Statement or the Prospectus or any such
further amendment or supplement thereto contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein that concern such rights not misleading.
This opinion speaks as of the date of its delivery and speaks to U.S. law
only. We undertake no obligation to update any of the matters addressed herein.
This opinion is furnished by us for the sole benefit of the addressees hereof in
connection with the transaction contemplated by the Underwriting Agreement. The
addressees may not rely on this opinion in connection with any other transaction
and no other person or entity shall be entitled to rely on this opinion for any
purpose without our express written consent.
-----------------------------
King & Spalding LLP
ANNEX II(D)
FORM OF OPINION OF ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ AND ▇▇▇▇ LLP
(SPECIAL PATENT COUNSEL TO THE COMPANY)
ANNEX II(E)
FORM OF OPINION OF ▇▇▇▇ & ASSOCIES
(SPECIAL FRENCH COUNSEL TO THE COMPANY)
_______, 2004
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED,
BEAR ▇▇▇▇▇▇▇ & CO. INC.,
AS REPRESENTATIVES OF THE SEVERAL UNDERWRITERS
NAMED IN SCHEDULE I HERETO,
c/o Goldman, ▇▇▇▇▇ & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We act as special counsel under French law to Idenix Pharmaceuticals,
Inc., a Delaware Corporation ("IDENIX") in connection with the issuance and sale
by Idenix and the sale by the selling stockholders to the Underwriters named in
Schedule I to the Underwriting Agreement (as defined below) (the "UNDERWRITERS")
of an aggregate of ______ shares (the "FIRM SHARES") and, at the election of the
Underwriters, up to ______ additional shares (the "OPTIONAL SHARES") of common
stock, par value $0.001 per share ("STOCK"), of Idenix. We have been asked by
Idenix to render this opinion pursuant to Section 7(g) of the Underwriting
Agreement, dated ____, 2004, among Idenix, the selling stockholders named in
Schedule II therein ("SELLING STOCKHOLDERS") and ▇▇▇▇▇▇▇, Sachs & Co., ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated and Bear ▇▇▇▇▇▇▇ & Co. Inc., as representatives of
the Underwriters. Capitalized terms not otherwise defined herein shall have the
meanings given to them in the reviewed documents, as listed.
Documents Reviewed
For the purpose of rendering this opinion, Idenix has asked us to review
copies of the following documents, collectively referred to herein as the
"DOCUMENTS":
1. A copy of the Registration Statement under the Securities Act of 1933
for Idenix (the "REGISTRATION STATEMENT") together with a Prospectus
(the "PROSPECTUS") as filed with the Securities and Exchange Commission
on_______, 2004, under registration number 333-111157, it being
understood that we have only examined the following portions of the
Registration Statement and Prospectus to the extent they relate to the
Cooperative Agreement (as defined below) (the "REVIEWED PORTIONS"):
(i) "Risk Factors - Risks Related to Patents and Licenses" under
the subheading "If any of our agreements that grant us
exclusive right to make, use and sell our
drug candidates are terminated, we may be unable to develop or
commercialize our drug candidates" (pages [_______]),
(ii) "Business - Patents and Licenses - CNRS and the University of
Montpellier" pages [_________].
We have not been asked to review or comment on any other sections of
the Registration Statement or Prospectus.
2. A copy of the certificate of incorporation ("extrait K-bis") and
updated bylaws (statuts) of Idenix SARL ("IDENIX SARL"), dated ______,
2004.
3. [References to corporate authorizations to be inserted]
4. An executed copy of the Cooperative Laboratory Agreement effective as
of January 1, 1999 (CNRS Agreement # 751272/00), as amended by the
supplemental Agreements dated May 17, 2001 (First Amendment #
751272/01) and April 11, 2002 (Second Amendment # 751272/02),
(together, the "ORIGINAL COOPERATIVE AGREEMENT").
5. An executed copy of the Restated and Amended Cooperative Agreement
dated as of May 7, 2003 (the "COOPERATIVE AGREEMENT") among Idenix
SARL, acting for itself and in the name and on behalf of Idenix
Pharmaceuticals, Inc., Centre National de la Recherche Scientifique
("CNRS"), the University of Montpellier II ("UMII"; collectively with
the CNRS, the "ORGANIZATION") and Novartis Pharma AG.
Assumptions
Our opinion, herein expressed, is given solely as to circumstances
existing on the date hereof and known to us and is limited to the laws of France
as the same are in force at the date hereof. In giving this opinion, we have
relied upon the following assumptions and qualifications, which we have not
independently verified:
(a) The Cooperative Agreement has been duly authorized, executed and
delivered by or on behalf of CNRS and UMII;
(b) The Cooperative Agreement submitted to us as a copy or obtained by
us by telecopy or in electronic form is complete and conforms to the original
thereof;
(c) The signatures of all parties on the Cooperative Agreement are
genuine;
(d) The Cooperative Agreement has not been amended;
(e) The Underwriting Agreement does not expand, modify or otherwise
affect the terms of the Cooperative Agreement or the respective rights or
obligations of the parties thereunder;
(f) CNRS and UMII each has all requisite capacity, power, authority and
legal right and is duly authorized under all applicable laws, regulations and
governing documents to enter into, execute and deliver the Cooperative Agreement
and perform its respective obligations under the Cooperative Agreement;
(g) CNRS and UMII is each validly existing and in good standing in all
necessary jurisdictions; and in particular the CNRS has obtained and maintained
valid authorization and approval from the French Ministry in charge of research
to conduct its activity as a French scientific and technologic public entity
(etablissement public a caractere scientifique et technologique) and UMII has
obtained and maintained valid authorization and approval from the French
Ministry in charge of universities to conduct its activity as a French cultural
and professional public entity (etablissement public a caractere culturel et
professionnel);
(h) Any authorizations, approvals, consents, orders or filings with any
authority, agency, or court required to be obtained or made by any party to the
Cooperative Agreement in any jurisdiction (other than France) in order to
execute, deliver, perform the Cooperative Agreement have been duly obtained;
(i) There has been no material mutual mistake as to the material terms
and conditions of the negotiation, execution and delivery of the Cooperative
Agreement;
(j) There has been no material fraud, fraudulent misrepresentation or
retention of information (reticence dolosive), or swindling (manoeuvres
frauduleuses) of any party to the Cooperative Agreement, nor undue influence on
the consent of any such party; and
(k) There has been no material duress, physical or moral constraints to
the consent of any party to the Cooperative Agreement nor abuse of rights (abus
de droits) by any such party to convince the other party to execute the
Cooperative Agreement.
Qualifications
The opinion hereafter expressed is subject to the following further
qualifications:
(i) We are members of the Bar of Paris, France, and we express no
opinion as to any matter relating to the laws of any jurisdiction other than the
laws of France as the same are in force on the date hereof and we have not, for
the purpose of giving this opinion, made any investigation of the laws of any
other jurisdiction, including the securities laws of the United States or any
political subdivision thereof or of any foreign jurisdiction. Moreover, we have
not considered the offering of securities provided for in the Registration
Statement and Prospectus under applicable French law.
(ii) We are giving no opinion as to the validity or enforceability of
any patent or other intellectual property right developed pursuant to the
Cooperative Agreement.
(iii) A French court may require proof that (A) Idenix SARL is the duly
appointed agent for Idenix, in bringing or defending infringement actions, (B)
Idenix SARL has notified the other co-owners of the intellectual property rights
that are involved in such legal action.
(iv) We express no opinion as to (i) the effect of any bankruptcy
(redressement judiciaire) or liquidation (liquidation judiciaire), insolvency
(cessation des paiements, insolvabilite), reorganization plan (plan de
continuation ou de cession), arrangement (reglement amiable des difficultes),
moratorium (moratoire de paiments) or similar laws relating to or affecting the
rights of creditors and secured parties (including, without limitation, the
effect of statutes regarding fraudulent conveyances, fraudulent transfers and
preferential transfers as provided by Volume VI of the French Commercial Code,
Section L611-1 through L628-3), or (ii) the effect of the exercise of judicial
discretion, including without limitation, requirements of good faith, honesty,
cooperation, morality
(bonnes moeurs), reasonableness (i.e. action in bon pere de famille), free and
informed consent, public order, fair dealing and adequate consideration given in
respect of the obligations undertaken, or (iii) the effect of delay in the
execution of its obligation by each party to the Cooperative Agreement, or (iv)
the effect of any determination that the Cooperative Agreement is subject to
mandatory provisions of administrative law (droit public).
(v) Specific performance, injunctive relief or other equitable remedies
as understood in common-law systems are generally not available under French
law. Although French law does provide for certain remedies having an injunctive
effect (for example, "condamnation a execution sous astreintes" or replacement
or rebate "refaction"), these remedies are generally not available for
agreements providing for an obligation to do something (obligation de faire),
for which the remedy is normally limited to damages.
(vi) We are not opining as to any of the other agreements referred to
in the Cooperative Agreement, including in particular the "Development, License
and Commercialization Agreement."
Opinion
Based on the foregoing and subject to such legal or other
qualifications as we have considered relevant and as stated herein and subject
to any matters not disclosed to us, we are of the opinion that, in so far as the
present laws of France are concerned:
(i) Idenix SARL, the successor-in-interest to Novirio SARL, is validly
existing as a corporation in good standing under the laws of France.
(ii) The Cooperative Agreement is governed by French law and is a
valid, binding and enforceable contract under French law.
(iii) The Cooperative Agreement incorporates all of the substantive
provisions of the Original Cooperative Agreement.
(iv) Under the Cooperative Agreement, Idenix SARL has the exclusive
world-wide right to exploit, directly or indirectly, the Results obtained in the
Exploitation Field within the framework of the Cooperative Agreement, which
includes, without limitation, the right to make, have made, use, sell, offer for
sale and import the Results, whether or not patented, of the Cooperative
Laboratory in the Exploitation Field, either directly or indirectly, for all
commercial purposes, and the right to enter into license agreements and
collaborations on its own, or through its affiliates, with third parties, to
authorize such third parties to make, use, sell, offer for sale and import said
Results for all commercial purposes, which right is enforceable under French law
and requires no further authorization from the Organization to be exercised by
Idenix SARL. The foregoing rights include the right for Idenix SARL to authorize
third parties to license the Results.
(v) Idenix SARL has the first, full and sole right to enforce or defend
any patent obtained covering Results at its sole expense, and the Organization
agrees to cooperate, assist, and participate in any litigation that Idenix or
Idenix SARL deems necessary or desirable to enforce or defend such patents,
which right is enforceable under French law.
(vi) The Reviewed Portions of the Registration Statement and
Prospectus, insofar as they purport to describe the provisions of the
Cooperative Agreement, are accurate, complete and fair descriptions of such
legal and contractual provisions.
This opinion speaks as of the date of its delivery and we undertake no
duty to inform the addressees of any changes in French or foreign law that may
affect the matters addressed in this opinion after the date hereof. This opinion
is furnished by us for the sole benefit of the addressees hereof and is not to
be read as extending by implication to any other legal matter in connection with
the Underwriting Agreement, the Cooperative Agreement or otherwise. The
addressees may not rely on this opinion in connection with any other transaction
and no other person or entity shall be entitled to rely on this opinion for any
purpose without our express written consent.
Yours faithfully,
▇▇▇▇ & Associes
----------------------------
▇▇▇▇▇▇▇. ▇. ▇▇▇▇▇▇▇▇
A partner
ANNEX II(F)
FORM OF OPINION OF BIRD & BIRD
(SPECIAL ITALIAN COUNSEL TO THE COMPANY)
__________________, 2004
▇▇▇▇▇▇▇, Sachs & Co.,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, ▇▇▇▇▇ & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We act as specialty licensing counsel under Italian law to Idenix
Pharmaceuticals, Inc., a Delaware corporation, formerly Novirio Pharmaceuticals
Limited, an exempted company incorporated in the Cayman Islands with limited
liability (the "Company" or "Idenix").
For the purposes of this letter, capitalized terms not otherwise defined
herein shall have the meanings given to them in the reviewed documents, as
listed below.
The Company has asked us to review exclusively the following sections of
the Company's registration statement on Form S-1 (333-111157) and the prospectus
included therein (the "Registration Statement"):
(a) the statements under the caption "Risks Related to Patents and
Licenses" of the section "Risk Factors" , limited to the chapters starting with
"If any of our agreements that grant us the exclusive right to make, use and
sell our drug candidates are terminated, we may be unable to develop or
commercialize our drug candidates" and ending with "If we are not able to obtain
a license to research results in the event of a termination of the cooperative
research agreement, we will be unable to develop the research results", solely
with reference to what may concern the relationships with the University of
Cagliari, as well as
(b) the statements under the section "Business", solely in the limit of
the chapter entitled "Patents and Licenses - University of Cagliari".
We have made this review, and provide our opinion exclusively with respect
to the sections mentioned above under (a) and (b). We have not been asked to
review or comment on any other sections of the Registration Statement or any
other document but the ones indicated below.
For the purposes of this opinion we have also been asked to review
(i) the Co-operative Antiviral Research Activity Agreement, entered into
on January 4th, 1999 by and between Novirio SARL, on behalf and for the benefit
of Novirio Pharmaceutical Limited,
and the Dipartimento di Biologia Sperimentale "▇▇▇▇▇▇▇▇ ▇▇▇▇▇" dell'Universita
di Cagliari (referred to below as the "Research Agreement");
(ii) the License Agreement between Novirio Pharmaceutical Limited and the
Dipartimento di Biologia Sperimentale "▇▇▇▇▇▇▇▇ ▇▇▇▇▇" dell'Universita di
Cagliari effective as of December 14th, 2000, in accordance with Amendment 2002,
as defined below (referred to below as the "License Agreement");
(iii) the April 10th, 2002 letter agreement between Novirio Pharmaceutical
Limited and Dipartimento di Biologia Sperimentale "▇▇▇▇▇▇▇▇ ▇▇▇▇▇"
dell'Universita di Cagliari, amending the Research Agreement and the License
Agreement (referred to below as the "Amendment 2002");
(iv) the May 8th, 2003 letter agreement between Idenix Pharmaceuticals,
Inc., Idenix SARL, Novartis Pharma AG, on one side, and the University of
Cagliari (in the persons of ▇▇. ▇▇ ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇) on the
other side, amending the Research Agreement and the License Agreement (already
amended with Amendment 2002) also in consideration of the transaction then
pending among Idenix and Novartis Pharma AG, which has become effective among
the under-signers upon the execution of the Development, License and
Commercialization Agreement and Master Manufacturing and Supply Agreement by
Idenix and Novartis (referred to below as the "Amendment 2003");
(v) the agreement entered into by and between the University of Cagliari
and ▇▇▇▇. ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ (employed by the same University) on June 30th, 2004,
according to which the latter assigned to the former his ownership rights,
granted in accordance with Italian Act 383/2001 (which amended the Italian
Patent Act), on the inventions (and relevant patents) achieved within the
Research Agreement (referred to below as the "University Agreement"); and
(vi) the agreement entered into on June 30th, 2004 by and between Idenix
and Universita degli Studi di Cagliari, which amended the above-mentioned
Research Agreement and License Agreement also by increasing the royalty rate
payable by Idenix from 1% to 2% for the patent applications and patents having
their earliest priority dates on or after May 14, 2003 (referred to below as the
"Amendment 2004").
Based on and in the limits of our review of these documents:
(i) the Research Agreement and the License Agreement, as revised by the
Amendment 2002, by the Amendment 2003 and by the Amendment 2004 are governed by
Italian law and are valid, binding and enforceable contracts under Italian law;
(ii) the results including the inventions, patent applications and patents
achieved within the Research Agreement are co-owned by Idenix and the University
of Cagliari. The University of Cagliari has granted a license to Idenix in
accordance with the Research Agreement and License Agreement, as amended
according to the above mentioned Amendment 2002, Amendment 2003 and Amendment
2004;
(iii) under the Research Agreement and License Agreement as amended in
Amendment 2002, Amendment 2003 and Amendment 2004, Idenix has the exclusive
right to make, have made, use, have used, sell, offer for sale, have sold and
import the Intellectual Property Rights as defined in the License Agreement
(including without limitation Results developed within or from Cooperative
Activity and those inventions described on page 2 at (v))[FOOTNOTE], with the
full right to grant
sublicenses that are consistent with the terms of the License Agreement, which
right is enforceable under Italian law;
(iv) under the Research Agreement and License Agreement as amended in
Amendment 2002, Amendment 2003 and Amendment 2004, Idenix has the right to take
any and all actions in connection with such Intellectual Property Rights which
are necessary in case of an infringement, enforcement or defence, which right is
enforceable under Italian law. Under such agreement (art. 5.5), Idenix has the
right to use the name of the University of Cagliari in a lawsuit in connection
with the licensed subject matter if it is necessary to prosecute the action or
in the event the University of Cagliari is a legally indispensable party to such
action, which right is enforceable under Italian Law; and
(v) in the University Agreement, ▇▇. ▇▇ ▇▇▇▇▇ has agreed to assign his
intellectual property rights in the inventions that will be achieved in the
performance of activities under the Research Agreement (including agreed to
extensions).
In the limits of our knowledge and within the scope of this opinion, we
have no reason, from a strict legal point of view and therefore with no
reference to any scientific, technical and commercial aspect, to believe that
the reviewed portions of the Registration Statement (i.e. the statements under
the caption "Risk Factors - Risks Related to Patents and Licenses" of the
Registration Statement, in the limit of the chapters starting with "If any of
our agreements that grant us the exclusive right to make, use and sell our drug
candidates are terminated, we may be unable to develop or commercialize our drug
candidates" and ending with "If we are not able to obtain a license to research
results in the event of a termination of the cooperative research agreement, we
will be unable to develop the research results", solely with reference to what
may concern the relationships with the University of Cagliari, as well as the
statements under the section "Business" of the Registration Statement, solely in
the limit of the chapter entitled "University of Cagliari") contain any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements therein that concern such rights not misleading.
This opinion speaks as of the date of its delivery and we undertake no
obligation to update any of the matters addressed herein. This opinion is
furnished by us for the sole benefit of the addressees hereof in connection with
the transaction contemplated by the Underwriting Agreement. The addressees may
not rely on this opinion in connection with any other transaction and no other
person or entity shall be entitled to rely on this opinion for any purpose
without our express written consent.
-------------------------------
▇▇▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇
ANNEX II(G)
FORMS OF OPINIONS OF COUNSELS TO THE SELLING STOCKHOLDERS
ANNEX III
IDENIX PHARMACEUTICALS, INC.
LOCK-UP AGREEMENT
________, 2004
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
c/o Goldman, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Idenix Pharmaceuticals, Inc. - Lock-Up Agreement
Ladies and Gentlemen:
The undersigned understands that you, as representatives (the
"Representatives"), propose to enter into an Underwriting Agreement on behalf of
the several Underwriters named in Schedule I to such agreement (collectively,
the "Underwriters"), with Idenix Pharmaceuticals, Inc., a Delaware corporation
(referred to herein as the "Company"), and the selling stockholders named
therein, providing for a public offering of common stock of the Company (the
"Shares") pursuant to a Registration Statement on Form S-1 (the "Registration
Statement") to be filed with the Securities and Exchange Commission (the "SEC").
In consideration of the agreement by the Underwriters to offer and sell
the Shares, and of other good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the undersigned agrees that, during
the period beginning from the date of the final Prospectus (the "Final
Prospectus") covering the public offering of the Shares and continuing to and
including the date that is 180 days after the date of such Final Prospectus, the
undersigned will not offer, sell, contract to sell, pledge, grant any option to
purchase, make any short sale or otherwise dispose of (collectively, "Transfer")
any shares of common stock of the Company, or any options or warrants to
purchase any shares of common stock of the Company (other than Shares sold in
the Offering), or any securities convertible into, exchangeable for or that
represent the right to receive shares of common stock of the Company, whether
now owned or hereinafter acquired, owned directly by the undersigned (including
holding as a custodian) or with respect to which the undersigned has beneficial
ownership within the rules and regulations of the SEC (collectively the
"Undersigned's Shares"), except for any of the Undersigned's Shares that are
acquired in the public market pursuant to brokers' transactions; provided,
however, that this exception shall not apply to any transactions in which a
public filing is required or made, including, without limitation, the filing of
a Schedule 13D, a Schedule 13G and/or a Form 4, each in accordance with the
Securities Exchange Act of 1934 or otherwise. [If the party delivering the
lock-up agreement is a Selling Stockholder, insert - In addition, the
undersigned shall not Transfer, at any time following the date that is 180 days
after the date of such Final Prospectus and preceding the date that is 365 days
after the date of such Final Prospectus, greater than 50% of the Undersigned's
Shares (for purposes of this provision, the aggregate amount of Undersigned's
Shares shall be determined immediately following completion of the Offering)].
The foregoing restriction is expressly agreed to preclude the
undersigned from engaging in any hedging or other transaction during the
applicable period which is designed to or which reasonably
could be expected to lead to or result in a sale or disposition of the
Undersigned's Shares even if such Undersigned's Shares would be disposed of by
someone other than the undersigned. Such prohibited hedging or other
transactions would include without limitation any short sale or any purchase,
sale or grant of any right (including without limitation any put or call option)
with respect to any of the Undersigned's Shares or with respect to any security
that includes, relates to, or derives any significant part of its value from
such Undersigned's Shares.
Notwithstanding the foregoing, the undersigned may Transfer the
Undersigned's Shares (i) as a bona fide gift or gifts, (ii) to any trust for the
direct or indirect benefit of the undersigned or the immediate family of the
undersigned, (iii) by will or intestate succession, (iv) to any affiliate (as
defined in Regulation C under the Securities Act of 1933, as amended) of the
undersigned, (v) if the undersigned is a corporation or similar entity, to any
wholly-owned subsidiaries of such corporation or similar entity, (vi) if the
undersigned is a partnership, limited liability company or similar entity, to
any partners or members of such partnership, limited liability company or
similar entity or (vii) with the prior written consent of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
on behalf of the Underwriters; provided, however, that in the case of Transfers
pursuant to clauses (v) and (vi) above, such Transfers shall not require a
public filing to be made, including, without limitation, the filing of a
Schedule 13D, a Schedule 13G and/or a Form 4, each in accordance with the
Securities Exchange Act of 1934 or otherwise; provided, further, that in the
case of Transfers pursuant to clauses (i), (ii), (iv), (v) and (vi) above, it
shall be a condition to such Transfer that the transferee (or trustee in the
case of clause (ii) above) execute an agreement stating that such transferee (or
trustee) is receiving and holding such capital stock subject to the provisions
of this Agreement and there shall be no further Transfer of such capital stock
except in accordance with this Agreement, and provided further that any such
Transfer shall not involve a disposition for value. For purposes of this Lock-Up
Agreement, "immediate family" shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin.
To the extent you release any of the Company's stockholders from such
stockholder's obligations under any lock-up agreement executed in connection
with the Offering in full or in part, the undersigned shall be similarly
released from its obligations under this Lock-up Agreement. In addition, if
▇▇▇▇▇▇▇, Sachs & Co. consents to the Transfer in the aggregate of greater than 1
percent (1%) of the outstanding Shares of the Company (calculated immediately
following completion of the Offering) pursuant to clause (vii) of the preceding
paragraph, then the undersigned shall thereafter be entitled to Transfer a
number of the Undersigned's Shares up to the aggregate number of Shares
previously transferred by all other stockholders pursuant to clause (vii) of the
preceding paragraph.
The undersigned agrees and consents to the entry of stop transfer
instructions with the Company's transfer agent and registrar against the
transfer of the Undersigned's Shares except in compliance with the foregoing
restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors, and assigns. This Lock-up Agreement shall supercede
in all respects any Lock-up Agreements relating to the Shares executed by the
undersigned prior to the date hereof.
This Lock-Up Agreement shall automatically terminate and be of no
further effect if (i) the Registration Statement is not declared effective by
the SEC by September 30, 2004 or (ii) the Underwriting Agreement is terminated
pursuant to its terms.
Very truly yours,
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Exact Name
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Authorized Signature
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Title