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EXHIBIT 4.7
PURCHASE AGREEMENT
February 15, 2000
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
ING Barings LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
PaineWebber Incorporated
▇▇ ▇▇▇▇▇ Securities Corporation
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
c/o BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
INTRODUCTORY. Alkermes, Inc., a Pennsylvania corporation (the
"Company"), proposes to issue and sell to the several Initial Purchasers named
in Schedule A (the "Initial Purchasers") an aggregate of $200,000,000 principal
amount of its 3-3/4% Convertible Subordinated Notes due 2007 (the "Firm
Securities"). In addition, the Company has granted to the Initial Purchasers an
option to purchase up to an additional aggregate $50,000,000 principal amount of
its 3-3/4% Convertible Subordinated Notes due 2007 (the "Option Securities") as
provided in Section 2. The Firm Securities and, if and to the extent such option
is exercised, the Option Securities are collectively called the "Securities."
The Securities will be convertible into shares (the "Underlying Securities") of
Common Stock, $.01 par value, of the Company (the "Common Stock"). The
Securities will be issued pursuant to an Indenture (the "Indenture"), to be
dated as of February 18, 2000, between the Company and State Street Bank and
Trust Company, as trustee (the "Trustee").
The Securities (and the Underlying Securities) will be offered without
being registered under the Securities Act of 1933, as amended, in reliance on
exemptions therefrom provided by the Act and the rules and regulations
thereunder (collectively, the "Securities Act").
The Initial Purchasers and their direct and indirect transferees will
be entitled to the benefits of a Registration Rights Agreement dated the date
hereof between the Company and the Initial Purchasers (the "Registration Rights
Agreement").
In connection with the offer and sale of the Securities, the Company
has prepared a preliminary offering circular dated February 9, 2000 (the
"Preliminary Circular") and a final offering
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circular dated February 15, 2000 (the "Final Circular") for delivery to
prospective purchasers of the Securities. Each of the Preliminary Circular and
the Final Circular includes or incorporates certain information concerning,
among other things, the Company, and the Securities and the Underlying
Securities. The Final Circular also incorporates by reference each document or
report filed by the Company with the Securities and Exchange Commission (the
"Commission") pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), after the date thereof
and prior to the termination of the distribution of the Securities as set forth
in the Final Circular. As used herein, the terms "Preliminary Circular" and
"Final Circular" shall include in each case the documents incorporated by
reference therein (the "Incorporated Documents"), and any and all supplements
and amendments to such documents incorporated by reference therein and any and
all amendments and supplements to the Preliminary Circular or the Final
Circular, as the case may be, and the term "Circular" shall include the
Preliminary Circular and the Final Circular. The terms "supplement", "amendment"
and "amend" as used herein shall include all documents deemed to be incorporated
by reference in the Preliminary Circular or Final Circular that are filed
subsequent to the date of such Circular with the Commission pursuant to the
Exchange Act.
SECTION 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents, warrants and covenants to each Initial
Purchaser that:
(a) The Circular and SEC Documents. The Preliminary Circular
does not, and the Final Circular in the form used by the Initial Purchasers to
confirm sales does not, and on the First Closing Date (as hereinafter defined)
will not, contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties set forth in the immediately preceding sentence do not apply to
statements in or omissions from either Circular made in reliance upon and in
conformity with information relating to any Initial Purchaser furnished to the
Company in writing by the Initial Purchaser expressly for use therein.
(b) Exchange Act Documents. There are no contracts or other
documents required to be described in the Company's Annual Report on Form 10-K
for the fiscal year ended March 31, 1999 that are not so described therein and
there are no contracts or other documents required to be filed pursuant to Item
14 of such Annual Report on Form 10-K that are not so filed. The Company is
subject to Section 13 or 15(d) of the Exchange Act. The Company has timely filed
with the Commission all the documents that the Company was required to file with
the Commission under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
(collectively, the "SEC Documents"). The SEC Documents, when they were filed
with the Commission, conformed in all material respects to the requirements of
the Exchange Act and the rules, regulations and instructions of the Commission
thereunder, and any documents so filed and incorporated by reference in any
Circular subsequent to the date hereof will, when they are filed with the
Commission, conform in all material respects to the requirements of the Exchange
Act and the rules, regulations and instructions of the Commission thereunder. No
stop order or other similar order or decree preventing the use of any Circular,
or any order or decree asserting that the transactions contemplated by this
Agreement are
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subject to the registration requirements of the Securities Act has been issued
and remains in effect and, to the best knowledge of the Company, no proceedings
for that purpose have been commenced or are contemplated.
(c) The Purchase Agreement. This purchase agreement (the
"Agreement") has been duly authorized, executed and delivered by, and is a valid
and binding agreement of, the Company, enforceable in accordance with its terms,
except insofar as indemnification, contribution and waiver provisions hereunder
may be limited by applicable law and except as the enforcement hereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
applicable fraudulent transfer laws or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.
(d) The Registration Rights Agreement. The Registration Rights
Agreement will have been duly authorized, executed and delivered by the Company
on the First Closing Date and will be a valid and binding agreement of the
Company, enforceable in accordance with its terms, except insofar as
indemnification, contribution and waiver provisions thereunder may be limited by
applicable law and except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, applicable fraudulent
transfer laws or other similar laws relating to or affecting the rights and
remedies of creditors or by general equitable principles; the Registration
Rights Agreement will conform to all material respects to the description
thereof in the Final Circular.
(e) The Indenture. The Indenture will have been duly
authorized, executed and delivered by the Company on the First Closing Date and
will be a valid and binding agreement of the Company, enforceable in accordance
with its terms, except insofar as indemnification and waiver provisions
thereunder may be limited by applicable laws and except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, applicable fraudulent transfer laws or similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles. The Indenture will conform in all material respects to the
description thereof in the Final Circular.
(f) The Securities. The Securities will have been duly and
validly authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered and paid for by the Initial Purchasers
in accordance with this Agreement will be (i) valid and binding obligations of
the Company enforceable in accordance with their terms, except as to enforcement
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles, (ii)
entitled to the benefits of the Indenture, and (iii) will not be subject to any
preemptive rights, co-sale rights, rights of first refusal or other rights to
subscribe for or purchase Securities; the Securities conform in all material
respects to the description thereof contained in the Final Circular.
(g) The Underlying Securities. The Underlying Securities have
been duly authorized and reserved for issuance and, upon issuance thereof upon
conversion of the Securities in
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accordance with the terms of the Securities, will be validly issued, fully paid
and nonassessable and will be issued free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest and will not be
subject to any preemptive rights, co-sale rights, rights of first refusal or
other right subject to subscribe for or purchase securities.
(h) No Applicable Registration or Other Similar Rights. There
are no persons with registration or other similar rights to have any equity or
debt securities included in the offering or registered for sale in accordance
with the Registration Rights Agreement contemplated by this Agreement except for
such rights as have been duly waived.
(i) No Material Adverse Change. Subsequent to the respective
dates as of which information is given in the Final Circular: (i) there has been
no material adverse change, or any development that could reasonably be expected
to result in a material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects, whether or not
arising from transactions in the ordinary course of business, of the Company and
its subsidiaries, considered as one entity, or any change which would adversely
effect the power and ability of the Company to perform its obligations under
this Agreement, the Indenture, the Registration Rights Agreement or the
Securities (any such change or effect, where the context so requires, is called
a "Material Adverse Change" or a "Material Adverse Effect"); (ii) the Company
and its subsidiaries, considered as one entity, have not incurred any material
liability or obligation, indirect, direct or contingent, not in the ordinary
course of business nor entered into any material transaction or agreement not in
the ordinary course of business; and (iii) except for the quarterly dividend
declared with respect to the Company's $3.25 Preferred Stock (as defined below)
and 1999 Preferred Stock (as defined below) in accordance with their respective
terms, there has been no dividend or distribution of any kind declared, paid or
made by the Company or, except for dividends paid to the Company or other
subsidiaries, by any of its subsidiaries on any class of capital stock or no
repurchase or redemption by the Company or any of its subsidiaries of any class
of capital stock.
(j) Independent Accountants. Deloitte & Touche LLP, who have
expressed their opinion with respect to the audited financial statements (which
term as used in this Agreement includes the related notes thereto) that are
incorporated by reference or included in the Final Circular, are independent
public or certified public accountants with respect to the Company under Rule
101 of the AICPA's Code of Professional Conduct and its interpretations and
rulings.
(k) Preparation of the Financial Statements. The financial
statements previously filed with the Commission that are incorporated by
reference or included in the Final Circular present fairly the consolidated
financial position of the Company and its subsidiaries as of and at the dates
indicated and the results of their operations and cash flows for the periods
specified. Such financial statements have been prepared in conformity with
generally accepted accounting principles as applied in the United States applied
on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. The financial data set forth in
the Final Circular under the captions "Selected Consolidated Financial
Information" and "Capitalization" fairly present the information set forth
therein on a basis consistent with that of the financial statements presented
therein or incorporated by reference.
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(l) Company's Accounting System. The Company and each of its
subsidiaries maintain a system of accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management's general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles as applied in the United States and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(m) Subsidiaries of the Company. The Company does not own or
control, directly or indirectly, any corporation, association or other entity
other than the subsidiaries listed in Exhibit 21 to the Company's Annual Report
on Form 10-K for the fiscal year ended March 31, 1999, except for Alkermes
Acquisition Corp., a Delaware corporation and Alkermes Clinical Partners, L.P.,
a Delaware limited partnership.
(n) Incorporation and Good Standing of the Company and its
Subsidiaries. Each of the Company and its subsidiaries has been duly organized
and is validly existing or subsisting as a corporation or limited liability
company, as the case may be, in good standing under the laws of the jurisdiction
in which it is organized (except Alkermes Europe, Ltd. or the corporations
organized in the Commonwealth of Pennsylvania) with full corporate power and
authority to own its properties and conduct its business as described in the
Final Circular, and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction which requires such
qualification.
(o) Capitalization of the Subsidiaries. All the outstanding
shares of capital stock of each subsidiary have been duly and validly authorized
and issued and are fully paid and nonassessable, and all outstanding shares of
capital stock of the subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any security interests,
claims, liens or encumbrances.
(p) No Prohibition on Subsidiaries from Paying Dividends or
Making Other Distributions. No subsidiary of the Company is currently
prohibited, directly or indirectly, from paying any dividends to the Company,
from making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from the
Company or from transferring any of such subsidiary's property or assets to the
Company or any other subsidiary of the Company.
(q) Capitalization and Other Capital Stock Matters. The
authorized, issued and outstanding capital stock of the Company is as set forth
in the Final Circular under the caption "Capitalization" (other than for
subsequent issuances, if any, pursuant to employee benefit plans described in
the Final Circular or upon exercise of outstanding options or warrants described
in the Final Circular). The Common Stock (including the Underlying Securities),
the $3.25 Convertible Exchangeable Preferred Stock, $.01 par value per share, of
the Company (the "$3.25 Preferred Stock") and the 1999 Redeemable Convertible
Exchangeable Preferred Stock, $.01 par
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value per share of the Company (the "1999 Preferred Stock" and collectively with
the $3.25 Preferred Stock, the "Preferred Stock") conforms in all material
respects to the description thereof contained in the Final Circular. All of the
issued and outstanding Common Stock and Preferred Stock has been duly authorized
and validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws. None of the outstanding
shares of Common Stock were issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase securities
of the Company. None of the outstanding shares of Preferred Stock were issued in
violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital stock of the Company or any
of its subsidiaries other than those described in the Final Circular. The
description of the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, set forth or
incorporated by reference in the Final Circular accurately and fairly presents
the information required to be shown with respect to such plans, arrangements,
options and rights.
(r) No Consents, Approvals or Authorizations Required. No
consent, approval, authorization, filing with or order of any court or
governmental agency or regulatory body is required in connection with the
transactions contemplated by this Agreement, the Registration Rights Agreement,
the Indenture and the Securities, except such as may be required under the
Securities Act, the Exchange Act, the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act") or the blue sky laws of any jurisdiction in
connection with the purchase and distribution of the Securities by the Initial
Purchasers in the manner contemplated herein and in the Final Circular.
(s) Non-Contravention of Existing Instruments and Agreements.
The execution and delivery by the Company of, and performance of its obligations
under, this Agreement, the Registration Rights Agreement, the Indenture and the
Securities, and the consummation of the transactions herein and therein
contemplated does not and will not conflict with, or result in a breach or
violation or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any of its subsidiaries pursuant to, (i) the charter or
by-laws of the Company or any of its subsidiaries, (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company or any of its subsidiaries is a party or is bound or to which
its or their property is subject or (iii) to the best knowledge of the Company,
any statute, law, rule, regulation, judgment, order or decree applicable to the
Company or any of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority having jurisdiction
over the Company or any of its subsidiaries or any of its or their properties.
(t) No Defaults or Violations. Neither the Company nor any
subsidiary is in violation or default of (i) any provision of its charter or
by-laws, (ii) the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or is bound or to which its
property is subject or (iii) to the best knowledge of the Company, any statute,
law, rule, regulation,
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judgment, order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or such subsidiary or any of its properties, as applicable, except any
such violation or default which would not, singly or in the aggregate, result in
a Material Adverse Change except as otherwise disclosed in the Final Circular.
(u) No Actions, Suits or Proceedings. No action, suit or
proceeding by or before any court or governmental agency, authority or body or
any arbitrator involving the Company or any of its subsidiaries or its or their
property is pending or, to the best knowledge of the Company, threatened that
(i) could reasonably be expected to have a Material Adverse Effect on the
performance of this Agreement or the consummation by the Company of any of the
transactions contemplated hereby or (ii) could reasonably be expected to result
in a Material Adverse Change.
(v) All Necessary Permits, Etc. The Company and each
subsidiary possess such valid and current certificates, authorizations or
permits issued by the appropriate state, federal or foreign regulatory agencies
or bodies necessary to conduct their respective businesses, and neither the
Company nor any subsidiary has received any notice of proceedings relating to
the revocation or modification of, or non-compliance with, 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
Change.
(w) Title to Properties. The Company and each of its
subsidiaries has good and marketable title to all the properties and assets
reflected as owned in the financial statements included or incorporated by
reference in the Final Circular, in each case free and clear of any security
interests, mortgages, liens, encumbrances, equities, claims and other defects,
except such as do not materially and adversely affect the value of such property
and do not materially interfere with the use made or proposed to be made of such
property by the Company or such subsidiary or disclosed in the Final Circular.
The real property, improvements, equipment and personal property held under
lease by the Company or any subsidiary are held under valid and enforceable
leases, with such exceptions as are not material and do not materially interfere
with the use made or proposed to be made of such real property, improvements,
equipment or personal property by the Company or such subsidiary.
(x) Tax Law Compliance. The Company and its subsidiaries have
filed all necessary federal, state and foreign income and franchise tax returns
and have paid all taxes shown thereon as due and, if due and payable, any
related or similar assessment, fine or penalty levied against any of them. The
Company has made adequate charges, accruals and reserves in the applicable
financial statements included or incorporated by reference in the Final Circular
in respect of all federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its subsidiaries
has not been finally determined. The Company is not aware of any tax deficiency
that has been or might be asserted or threatened against the Company that could
result in a Material Adverse Change.
(y) Intellectual Property Rights. Each of the Company and its
subsidiaries owns or possesses adequate rights to use all patents, patent
rights, inventions, trade secrets, know-
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how, trademarks, service marks, trade names and copyrights which are necessary
to conduct its respective business as described in the Final Circular. The
expiration of any patents, patent rights, trademarks, service marks, trade names
or copyrights would not result in a Material Adverse Change that is not
otherwise disclosed in the Final Circular; the Company has not received any
notice of, and has no knowledge of, any infringement of or conflict with
asserted rights of the Company by others with respect to any patent, patent
rights, inventions, trade secrets, know-how, trademarks, service marks, trade
names or copyrights that is not disclosed in the Final Circular; and the Company
has not received any notice of, and has no knowledge of, any infringement of or
conflict with asserted rights of others with respect to any patent, patent
rights, inventions, trade secrets, know-how, trademarks, service marks, trade
names or copyrights which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, might have a Material Adverse Effect
that is not described in the Final Circular. There is no claim being made
against the Company regarding patents, patent rights or licenses, inventions,
collaborative research, trade secrets, know-how, trademarks, service marks,
trade names or copyrights that is not described in the Final Circular. The
Company and its subsidiaries do not in the conduct of their business as now or
proposed to be conducted as described in the Final Circular 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, known to the Company or any of its subsidiaries, which such
infringement or conflict is reasonably likely to result in a Material Adverse
Change that is not described in the Final Circular.
(z) Year 2000 Preparedness. Neither the Company nor any of its
subsidiaries has experienced any material failures of or disruptions to its
software, hardware, computer systems, peripherals or other equipment containing
date-sensitive components that were related to the arrival of the Year 2000
("Year 2000 Problems") and, to the knowledge of the Company and its
subsidiaries, none of their respective material vendors has experienced any such
material failures or disruptions related to Year 2000 Problems.
(aa) No Transfer Taxes or Other Fees; No Solicitation Fees. There
are no documentary stamp or other issuance or transfer taxes or other similar
fees or charges under Federal law or the laws of any state, or any political
subdivision thereof, required to be paid in connection with the execution and
delivery of this Agreement, the Registration Rights Agreement, and the Indenture
or the issuance and sale by the Company of the Securities. The Company has not
paid or agreed to pay any person any compensation for soliciting another to
purchase any Securities (except as contemplated by this Agreement).
(bb) Company Not an "Investment Company". The Company has been
advised of the rules and requirements under the Investment Company Act of 1940,
as amended (the "Investment Company Act"). The Company is not, and after receipt
of payment for the Securities will not be, an "investment company" or an entity
"controlled" by an "investment company" within the meaning of the Investment
Company Act and will conduct its business in a manner so that it will not become
subject to the Investment Company Act.
(cc) Insurance. Each of the Company and its subsidiaries are
insured by recognized, financially sound and reputable institutions with
policies in such amounts and with such
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deductibles and covering such risks as are generally deemed adequate and
customary for their respective businesses, including, but not limited to,
policies covering real and personal property owned or leased by the Company and
its subsidiaries against theft, damage, destruction and acts of vandalism,
general liability and Directors and Officers liability. The Company has no
reason to believe that it or any subsidiary will not be able (i) to renew its
existing insurance coverage as and when such policies expire or (ii) to obtain
comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that would not result in
a Material Adverse Change. Neither of the Company nor any subsidiary has been
denied any insurance coverage which it has sought or for which it has applied.
(dd) Labor Matters. To the best of Company's knowledge, no labor
disturbance by the employees of the Company or any of its subsidiaries exists or
is imminent.
(ee) Regulation M. The Company has not taken and will not take,
directly or indirectly, any action prohibited by Regulation M under the Exchange
Act in connection with the sale or offering of the Securities or the Underlying
Securities.
(ff) Lock-Up Agreements. Each executive officer and director of
the Company has agreed to sign an agreement substantially in the form attached
hereto as Exhibit A (the "Lock-up Agreement"). The Company has provided to
counsel for the Initial Purchasers true, accurate and complete copies of all of
the Lock-up Agreements presently in effect or effected with respect to the
offering of the Securities pursuant hereto. The Company hereby represents and
warrants that it will not release any of its officers, directors or other
stockholders from any Lock-up Agreements currently existing or hereafter
effected with respect to the offering of the Securities without the prior
written consent of FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
(gg) Related Party Transactions. There are no business
relationships or related-party transactions involving the Company or any
subsidiary or any other person required to be described in
the Final Circular which have not been described as required.
(hh) Rule 144A Eligibility. The Firm Securities and Option
Securities satisfy the requirements set forth in Rule 144A(d)(3) under the
Securities Act for securities to be eligible for trading pursuant to Rule 144A.
(ii) No General Solicitation. Neither the Company nor any
Affiliate (as defined in Rule 501(b) of Regulation D under the Securities Act)
of the Company, directly or through any agent or any person acting on its or
their behalf, (i) has sold, offered for sale, solicited offers to buy or
otherwise negotiated in respect of, or will sell, offer for sale, solicit offers
to buy or otherwise negotiate in respect of any security (as defined in the
Securities Act) which is or will be integrated with the sale of the Securities
under Rule 502(a) of Regulation D under the Securities Act in a manner that
would require the registration under the Securities Act of the Securities, or
(ii) has engaged or will engage in any form of general solicitation or general
advertising (as those terms are used in Rule 502(c) of Regulation D under the
Securities Act) in connection with the offering of the Securities, or (iii) has
engaged or will engage in any manner in a public offering in connection with the
sale of the Securities within the meaning of Section 4(2) of the Securities Act
(assuming, with
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respect to (ii) and (iii), the accuracy and completeness of the Initial
Purchasers' representations, warranties and agreements in Sections 2(f) hereof).
(jj) No Registration Required. It is not necessary in connection
with the offer, sale and delivery of any of the Securities to the Initial
Purchasers in the manner contemplated by this Agreement to register any of the
Securities or the Underlying Securities under the Securities Act or to qualify
the Indenture under the Trust Indenture Act of 1939, as amended.
(kk) Solvency. To the best knowledge of the Company, the present
fair saleable value of the assets of the Company exceeds the amount that will be
required to be paid on or in respect of the existing debts and other liabilities
(including contingent liabilities) of the Company as they become absolute and
matured; the assets of the Company do not constitute unreasonably small capital
to carry out its business as conducted or as proposed to be conducted, including
the capital needs of the Company, taking into account the projected capital
requirements and capital availability of the Company; the Company does not
intend to, nor does it believe that it will, incur debts beyond its ability to
pay such debts as they mature; upon the issuance of the Securities and the
application of the proceeds thereof as contemplated by the Final Circular, the
present fair saleable value of the assets of the Company will exceed the amount
that will be required to be paid on or in respect of the existing debts and
other liabilities (including contingent liabilities) of the Company as they
become absolute and matured; the assets of the Company, upon the issuance of the
Securities and the application of the proceeds thereof as contemplated by the
Final Circular, will not constitute unreasonably small capital to carry out its
business as conducted or as proposed to be conducted, including the capital
needs of the Company, taking into account the projected capital requirements and
capital availability of the Company.
(ll) No Unlawful Contributions or Other Payments. Neither the
Company nor any of its subsidiaries nor, to the best of the Company's knowledge,
any employee or agent of the Company or any subsidiary, has made, in the last
five years, any contribution or other payment to any official of, or candidate
for, any federal, state or foreign office in violation of any law or of the
character required to be disclosed in the Final Circular.
(mm) Environmental Laws. Except as otherwise disclosed in the
Final Circular, (i) the Company is in compliance with all rules, laws and
regulations relating to the use, treatment, storage and disposal of toxic
substances and protection of public health or the environment ("Environmental
Laws") which are applicable to its business, except where the failure to comply
would not result in a Material Adverse Change, (ii) the Company has received no
notice from any governmental authority or third party of an asserted claim under
Environmental Laws, (iii) based on present business plans, the Company will not
be required to make future material capital expenditures to comply with
Environmental Laws presently in effect and (iv) no property which is owned,
leased or occupied by the Company has been designated as a Superfund site
pursuant to the Comprehensive Response, Compensation, and Liability Act of 1980,
as amended (42 U.S.C. Section 9601, et seq.), or otherwise designated as a
contaminated site under applicable state or local law.
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(nn) Periodic Review of Costs of Environmental Compliance. In the
ordinary course of its business, the Company conducts a periodic review of the
effect of Environmental Laws on the business, operations and properties of the
Company and its subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval, any
related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review and the amount of its established
reserves, the Company has reasonably concluded that such associated costs and
liabilities would not, individually or in the aggregate, have a Material Adverse
Effect.
(oo) ERISA Compliance. Each "employee benefit plan" (within the
meaning of section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended, and the regulations and published interpretations thereunder
(collectively, "ERISA") established or maintained by the Company, a subsidiary
or their "ERISA Affiliates" (as defined below) (collectively the "Plans") is in
compliance in all material respects with ERISA. "ERISA Affiliate" means, with
respect to the Company or a subsidiary, any member of any group of organizations
described in section 414(b), (c), (m) or (o) of the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder
(the "Code") of which the Company or such subsidiary is a member. Neither the
Company, a subsidiary nor any ERISA Affiliate has ever contributed to,
contributes to, been required to contribute to or has any liability with respect
to any employee benefit plan subject to Title IV of ERISA, section 412 of the
Code or section 302 of ERISA. Each of the Plans established or maintained by the
Company, a subsidiary or any of their ERISA Affiliates that is intended to be
qualified under section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would cause the loss of
such qualification. Neither the Company, a subsidiary nor any of their ERISA
Affiliates has incurred or reasonably expects to incur any liability under
section 4975 or 4980B of the Code. There are no actions, suits or claims
pending, threatened or to the Company's knowledge, anticipated (other than
routine claims for benefits) against any of the Plans, their assets or their
fiduciaries.
(pp) The Common Stock is registered pursuant to Section 12(g) of
the Exchange Act and is listed on the Nasdaq National Market and the Company has
taken no action designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from the Nasdaq National Market, nor has the Company received any
notification that the Commission or the National Association of Securities
Dealers, Inc. ("NASD") is contemplating terminating such registration or
listing.
Any certificate signed by an officer of the Company and delivered
to FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. on behalf of the Initial Purchasers or to
counsel for the Initial Purchasers shall be deemed to be a representation and
warranty by the Company to each Initial Purchaser as to the matters set forth
therein.
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SECTION 2. PURCHASE, SALE AND DELIVERY OF THE SECURITIES.
(a) The Firm Securities. You have advised the Company that you
have made and will make an offering of the Firm Securities purchased by you
hereunder on the terms to be set forth in the Final Circular and in this
Agreement, as soon after this Agreement is entered into as in your judgment is
advisable. On the basis of the representations, warranties and agreements herein
contained, but subject to the terms and conditions herein set forth, the Initial
Purchasers agree, severally and not jointly, to purchase from the Company
$200,000,000 aggregate principal amount of Firm Securities set forth opposite
their respective names on Schedule A attached hereto at a purchase price of
97.0%of the principal amount thereof (the "Purchase Price") plus accrued
interest if any, from February 15, 2000 to the date of payment and delivery.
Delivery of definitive notes for the Firm Securities to be
purchased by the Initial Purchasers and payment therefor shall be made by the
Company and the Initial Purchasers at the offices of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
LLP (or at such other place as may be agreed upon among the Initial Purchasers
and the Company), at 10:00 A.M., Boston time, (i) on the third (3rd) full
business day following the first day that Securities are traded, (ii) if this
Agreement is executed and delivered after 4:30 p.m., Boston time, the fourth
(4th) full business day following the day that this Agreement is executed and
delivered or (iii) at such other time and date not later than seven (7) full
business days following the first day that Securities are traded as the Initial
Purchasers and the Company may determine (or at such time and date to which
payment and delivery shall have been postponed pursuant to Section 8 hereof),
such time and date of payment and delivery being herein called the "First
Closing Date"; provided, however, that if the Company has not made available to
the Initial Purchasers copies of the Final Circular within the time provided in
Section 2(e) hereof, the Initial Purchasers may, in their sole discretion,
postpone the First Closing Date until no later that two (2) full business days
following delivery of copies of the Final Circular to the Initial Purchasers.
The notes (including one or more global certificates), if any, for the Firm
Securities to be so delivered will be made available to FleetBoston ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Inc. at such office or at such other location including, without
limitation, in New York City, as FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. may
reasonably request for checking at least one (1) full business day prior to the
First Closing Date and will be in such names and denominations as FleetBoston
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. may request, such request to be made at least two (2)
full business days prior to the First Closing Date. To the extent that the
Initial Purchasers so elect, delivery of the Firm Securities held in global
notes may be made by credit through full fast transfer to the accounts at The
Depository Trust Company ("DTC") designated by the Initial Purchasers.
(b) The Option Securities; the Second Closing Date. In addition,
on the basis of the representations, warranties and agreements herein contained,
and upon the terms but subject to the conditions herein set forth, the Company
hereby grants an option to the several Initial Purchasers to purchase, severally
and not jointly, up to $50,000,000 aggregate principal amount of of Option
Securities from the Company at the Purchase Price plus accrued interest, if any,
from the date of the Option Securities exercise notice to the date of payment
and delivery to be paid by the Initial Purchasers for the Option Securities. The
option granted hereunder may be exercised at any time upon notice by the Initial
Purchasers to the Company which notice may be given at any time within
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45 days from the date of this Agreement. The time and date of delivery of the
Option Securities, if subsequent to the First Closing Date, is called the
"Second Closing Date" and shall be determined by the Initial Purchasers and
shall not be earlier than three nor later than five full business days after
delivery of such notice of exercise. If any Option Securities are to be
purchased, each Initial Purchaser agrees, severally and not jointly, to purchase
the principal amount of Option Securities (subject to such adjustments to
eliminate fractional notes as the Initial Purchasers may determine) that bears
the same proportion to the total principal amount of Option Securities to be
purchased as the principal amount of Firm Securities set forth on Schedule A
opposite the name of such Initial Purchaser bears to the total principal amount
of Firm Securities.
The notes (including one or more global notes), if any, for the
Option Securities so to be delivered will be made available to FleetBoston
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. at such office or other location including, without
limitation, in New York City, as FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. may
reasonably request for checking at least one (1) full business day prior to the
date of payment and delivery and will be in such names and denominations as
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. may request, such request to be made at
least two (2) full business days prior to such date of payment and delivery. To
the extent that the Initial Purchasers so elect, delivery of the Option
Securities in global form may be made by credit through full fast transfer to
the accounts at DTC designated by the Initial Purchasers.
(c) Exercise of Option. Upon exercise of any option provided for
in Section 2(b) hereof, the obligations of the Initial Purchasers to purchase
such Option Securities will be subject (as of the date hereof and as of the date
of payment for such Option Securities) to the accuracy of and compliance with
the representations and warranties of the Company herein, to the accuracy of the
statements of the Company and officers of the Company on the Company's behalf
made pursuant to the provisions hereof, to the performance by the Company of its
obligations under this Agreement, the Indenture, the Registration Rights
Agreement and the Firm Securities and the Option Securities, and to the
condition that all proceedings taken at or prior to the Second Closing Date in
connection with the sale and transfer of such Option Securities shall be
satisfactory in form and substance to you and to Initial Purchasers' counsel,
and you shall have been furnished with all such documents, certificates and
opinions as you may request in order to evidence the accuracy and completeness
of any of the representations, warranties or statements, the performance of any
of the covenants of the Company or the compliance with any of the conditions
herein contained.
(d) Payment for the Securities. Payment for the Securities shall
be made at the First Closing Date (and, if applicable, at the Second Closing
Date) by wire transfer in immediately available-funds to the order of the
Company.
It is understood that FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. has
been authorized, for its own account and the accounts of the Initial Purchasers,
to accept delivery of and receipt for, and make payment of the Purchase Price
for, the Firm Securities and any Option Securities the Initial Purchasers have
agreed to purchase. FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., individually and not as
the representative of the Initial Purchasers, may (but shall not be obligated
to) make payment for any Securities to be purchased by any Initial Purchaser
whose funds shall not have been received by
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FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. by the First Closing Date or the Second
Closing Date, as the case may be, for the account of such Initial Purchaser, but
any such payment shall not relieve such Initial Purchaser from any of its
obligations under this Agreement.
(e) Delivery of Final Circular to the Initial Purchasers. Not
later than 12:00 noon on the second business day following the date the
Securities are released by the Initial Purchasers for sale to the investors, the
Company shall deliver or cause to be delivered copies of the Final Circular in
such quantities and at such places and FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. shall
request.
(f) Initial Purchaser Representations. Each Initial Purchaser
represents and warrants that such Initial Purchaser is an accredited investor as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act (an "Institutional Accredited Investor"). The Initial Purchasers agree with
the Company that (a) it has not solicited and will not solicit offers for, or
offer or sell, any Securities by any form of general solicitation or general
advertising (as those terms are used in Rule 502(c) of Regulation D under the
Securities Act) or engage in any manner in a public offering in connection with
the sale of the Securities within the meaning of Section 4(2) of the Securities
Act (assuming the accuracy and completeness of the Company's representations,
warranties and compliance with its agreements in Sections 1(ii), 3(d) and 3(e)
hereof), and (b) it has solicited and will solicit offers for the Securities
only from, and has offered and will offer and sell the Securities only to,
persons that it reasonably believes to be qualified institutional buyers, as
defined in Rule 144A(a)(1) under the Securities Act ("QIBs").
SECTION 3. COVENANTS OF THE COMPANY.
The Company further covenants and agrees with each Initial Purchaser as
follows:
(a) Amendments and Supplements to the Final Circular. If, during
such period after the date hereof and prior to the date on which all of the
Securities shall have been sold by the Initial Purchasers, any event shall occur
or condition exist as a result of which it is necessary in the judgment of the
Company or in the reasonable opinion of the Initial Purchasers or counsel for
the Initial Purchasers to amend or supplement the Final Circular in order to
make the statements therein, in the light of the circumstances existing at the
time the Final Circular is delivered to a purchaser, not misleading, or if it is
necessary at any time to amend or supplement the Final Circular to comply with
any law, the Company promptly will prepare and furnish, at its own expense, to
the Initial Purchasers, an appropriate amendment to the Final Circular so that
the Final Circular as so amended or supplemented will not, in the light of the
circumstances when it is so delivered, be misleading, or so that the Final
Circular, will comply with the law.
(b) Blue Sky Compliance. The Company will cooperate with the
Initial Purchasers and counsel for the Initial Purchasers in endeavoring to
qualify the Securities for sale under the securities laws of such jurisdictions
(both national and foreign) as the Initial Purchasers may reasonably have
designated in writing and will make such applications, file such documents, and
furnish such information as may be reasonably required for that purpose,
provided the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of
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15
process in any jurisdiction where it is not now so qualified or required to file
such a consent. The Company will, from time to time, prepare and file such
statements, reports and other documents, as are or may be required to continue
such qualifications in effect for so long a period as the Initial Purchasers may
reasonably request for distribution of the Shares.
(c) Copies of any Amendments and Supplements to each Circular.
The Company (i) has furnished to you copies of the Preliminary Circular and (ii)
will furnish to you copies of the Final Circular within the time period
specified in Section 2(e) of this Agreement, any documents incorporated by
reference therein and any amendments or supplements to such documents, all in
such quantities as you may from time to time reasonably request until all of the
Securities shall have been sold by the Initial Purchasers.
(d) No Integration. Neither the Company nor any Affiliate has
sold, offered for sale or solicited offers to buy or otherwise negotiated in
respect of any security (as defined in the Securities Act) or will do any of the
foregoing which could be integrated with the sale of any of the Securities under
Rule 502(a) of Regulation D under the Securities Act in a manner which would
require the registration under the Securities Act of such Securities.
(e) No General Solicitation. Neither the Company nor any
Affiliate has solicited or will solicit any offer to buy or offer to sell any of
the Securities by means of any form of general solicitation or general
advertising (as those terms are used in Rule 502(c) of Regulation D under the
Securities Act) or has engaged or will engage in any manner in a public offering
in connection with the sale of the Securities within the meaning of Section 4(2)
of the Securities Act.
(f) Rule 144A Information. To the extent that any Securities or
Underlying Securities remain outstanding and are "restricted securities" within
the meaning of Rule 144 under the Securities Act, during the two year period
following the First Closing Date (or, if later, the Second Closing Date) and
during the two-year period following the sale of any such Security or Underlying
Security, as the case may be, by an Affiliate of the Company (for purposes of
this Section 3(f) only, as such term is defined in Rule 144(a)(1) under the
Securities Act), the Company will make available, upon request, to any seller of
such Securities or Underlying Securities, as the case may be, the information
specified in Rule 144A(d)(4) under the Securities Act, unless the Company is
then subject to and in compliance with Section 13 or 15(d) of the Exchange Act.
(g) Designation for Trading in The Portal Market. The Company
will use its best efforts to permit the Securities to be designated securities
eligible for trading in The Portal Market in accordance with the rules and
regulations adopted by the NASD relating to trading in The Portal Market and to
permit the Securities to be eligible for clearance and settlement through DTC.
(h) Agreement by Company Not to Offer or Sell Additional
Securities. The Company will not, without the prior written consent of
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc., for a period of 90 days following the date
of the Final Circular (the "Lock-Up Period"), offer, sell or contract to sell,
or otherwise dispose of or enter into any transaction which is designed to, or
could be expected to, result in the disposition (whether by actual disposition
or effective economic disposition due to cash settlement or otherwise by the
Company or any affiliate of the Company or
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any person in privity with the Company or any Affiliate of the Company) directly
or indirectly, or announce the offering of, any other Common Stock or any
securities convertible into, or exchangeable for, Common Stock; provided,
however, that the Company may (i) issue and sell Common Stock pursuant to any
director, employee, consultant or other duly authorized stock option plan, stock
ownership plan or dividend reinvestment plan of the Company in effect at the
date of the Final Circular and described in the Final Circular and (ii) the
Company may issue Common Stock issuable upon the conversion of securities or the
exercise of warrants outstanding at the date of the Final Circular and described
in the Final Circular.
(i) Reservation of Underlying Securities. The Company will at all
times reserve and keep available, free of any preemptive rights, co-sale rights,
registration rights, rights of first refusal, other rights to subscribe for or
purchase securities or other rights of security holders similar to any of the
foregoing, out of its authorized but unissued Common Stock, for the purpose of
effecting the conversion of the Securities into the Underlying Securities, the
full number of shares of Underlying Securities issuable upon the conversion of
all outstanding Securities.
(j) Use of Proceeds. The Company shall apply the net proceeds
from the sale of the Securities sold by it in the manner described under the
caption "Use of Proceeds" in the Final Circular.
(k) Legends placed on the Securities. The Company will ensure
that each note representing any Securities bears the legend required by the
Indenture, if any.
(l) Legends placed on the Underlying Securities. The Company will
ensure that each stock certificate representing Underlying Securities bears the
legend required by the Indenture, if any.
(m) Lock-Up Agreements. The Company will not release any of its
executive officers or directors from any Lock-up Agreements currently existing
or hereafter effected with respect to the offering of the Securities without the
prior written consent of FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.
(n) Removal of Legends. In connection with any disposition of
Securities or Underlying Securities pursuant to a transaction made in compliance
with applicable state securities laws and (i) satisfying the requirements of
Rule 144(k) under the Securities Act, (ii) made pursuant to an effective
registration statement under the Securities Act or (iii) disposed of in any
other transaction that does not require registration under the Securities Act,
the Company will reissue notes or certificates evidencing such Securities or
Underlying Securities without the legends referred to in Section 3(k) or 3(l)
hereof (provided, in the case of a transaction specified in clause (iii) above,
that the legal opinion referred to in the applicable legend supports the removal
of such legends).
(o) DTC Compliance. The Company agrees to comply with all
agreements set forth in the representation letters of the Company to DTC
relating to the approval of the Securities by DTC for "book-entry" transfer.
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(p) Notice of Subsequent Events. If at any time during the ninety
(90) day period after the date hereof, any rumor, publication or event relating
to or affecting the Company shall occur as a result of which in your opinion the
market price of the Company Stock has been or is likely to be materially
affected (regardless of whether such rumor, publication or event necessitates a
supplement to or amendment of the Final Circular), the Company will, after
written notice from you advising the Company to the effect set forth above,
forthwith prepare, consult with you concerning the substance of and disseminate
a press release or other public statement, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or event.
SECTION 4. CONDITIONS OF OBLIGATIONS OF THE INITIAL PURCHASERS. The
obligations of the Initial Purchasers to purchase and pay for the Firm
Securities and Option Securities as provided herein, shall be subject to the
accuracy, as of the date hereof and the First Closing Date or the Second Closing
Date, as the case may be, of the representations and warranties of the Company
herein, to the performance by the Company of its obligations hereunder and to
each of the following additional conditions:
(a) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement and prior to the First Closing Date or the Second
Closing Date, as the case may be:
(i) there shall not have been any Material Adverse Change in
the condition (financial or otherwise), earnings, business, operations or
business prospects of the Company and its subsidiaries considered as one
enterprise from that set forth in the Final Circular that, in your sole
judgment, is material and adverse and that makes it, in your sole judgment,
impracticable or inadvisable to market the Firm Securities or Option Securities
as contemplated in the Final Circular.
(b) Corporate Proceedings. All corporate proceedings and other
legal matters in connection with this Agreement, the Registration Rights
Agreement, the Indenture, the form of Preliminary Circular and Final Circular,
and the authorization, issue, sale and delivery of the Firm Securities and the
Option Securities shall have been reasonably satisfactory to Initial Purchasers'
counsel and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this Section.
(c) Opinion of Counsel for the Company. You shall have received
on the First Closing Date or on the Second Closing Date, as the case may be, an
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & Ingersoll, LLP, counsel for the Company,
substantially in the form of Exhibit B attached hereto, dated the First Closing
Date or the Second Closing Date, as the case may be, addressed to the Initial
Purchasers and with reproduced copies or signed counterparts thereof for each of
the Initial Purchasers.
Counsel rendering the opinion contained in Exhibit B may rely as
to questions of law not involving the laws of the United States (exclusive of
patent law) or the Commonwealth of Pennsylvania and State of New York as to the
validity and enforceability of Securities, Indenture and
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Registration Rights Agreement upon opinions of local counsel, and as to
questions of fact upon representations or certificates of officers of the
Company and of government officials, in which case their opinion is to state
that they are so relying and that they have no knowledge of any material
misstatement or inaccuracy in such opinions, representations or certificate.
Copies of any opinion, representation or certificate so relied upon shall be
delivered to you, as Initial Purchasers of the Initial Purchasers, and to the
Initial Purchasers' counsel.
(d) Opinion of Patent Counsel for the Company. You shall have
received on the First Closing Date, or the Second Closing Date, as the case may
be, an opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C. and Howrey and Simon,
patent counsel for the Company, substantially in the form of Exhibits C and D,
respectively, attached hereto.
(e) Opinion of Counsel for the Initial Purchasers. You shall have
received on the First Closing Date or on the Second Closing Date, as the case
may be, an opinion of ▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP, substantially in the form
of Exhibit E attached hereto. The Company shall have furnished to such counsel
such documents as they may have requested for the purpose of enabling them to
pass upon such matters.
(f) Accountants' Comfort Letter. You shall have received on the
First Closing Date or on the Second Closing Date, as the case may be, a letter
from Deloitte & Touche LLP, addressed to the Initial Purchasers, dated the First
Closing Date or the Second Closing Date, as the case may be, confirming that
they are independent certified public accountants with respect to the Company
under Rule 101 of the AICPA's Code of Professional Conduct and its
interpretations and rulings and based upon the procedures described in such
letter delivered to you concurrently with the execution of this Agreement
(herein called the "Original Letter"), but carried out to a date not more than
four (4) business days prior to the First Closing Date or the Second Closing
Date, as the case may be, (i) confirming, to the extent true, that the
statements and conclusions set forth in the Original Letter are accurate as of
the First Closing Date or the Second Closing Date, as the case may be; and (ii)
setting forth any revisions and additions to the statements and conclusions set
forth in the Original Letter which are necessary to reflect any changes in the
facts described in the Original Letter since the date of such letter, or to
reflect the availability of more recent financial statements, data or
information. The letter shall not disclose any change in the condition
(financial or otherwise), earnings, operations, business or business prospects
of the Company and its subsidiaries considered as one enterprise from that set
forth in the Final Circular which, in your sole judgment, is material and
adverse and makes it impracticable or inadvisable to proceed with the sale of
the Firm Securities and the Option Securities as contemplated by the Final
Circular. The Original Letter from Deloitte & Touche LLP, shall be addressed to
or for the use of the Initial Purchasers in form and substance satisfactory to
the Initial Purchasers and shall (i) represent, to the extent true, that they
are independent certified public accountants with respect to the Company under
Rule 101 of the AICPA's Code of Professional Conduct and its interpretations and
rulings, (ii) set forth their opinion with respect to their examination of the
consolidated balance sheet of the Company as of March 31, 1999 and related
consolidated statements of operations, shareholders' equity, and cash flows for
the twelve (12) months ended ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) state that Deloitte & Touche
LLP has performed the procedures set out in Statement on Auditing Standards No.
71 ("SAS 71") for a review of interim
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financial information for each of the quarters in the three-quarter period ended
December 31, 1999 (the "Quarterly Financial Statements"), (iv) state that in the
course of such review, nothing came to their attention that leads them to
believe that any material modifications need to be made to any of the Quarterly
Financial Statements in order for them to be in compliance with generally
accepted accounting principles consistently applied across the periods
presented, and address other matters agreed upon by Deloitte & Touche LLP and
you.
(g) Officers' Certificate. You shall have received on the First
Closing Date and on the Second Closing Date, as the case may be, a certificate
of the Company, dated the First Closing Date or the Second Closing Date, as the
case may be, signed by the Chief Executive Officer and Chief Financial Officer
of the Company, to the effect that, and you shall be satisfied that:
(i) The representations and warranties of the Company in this
Agreement are true and correct, as if made on and as of the First Closing Date
or the Second Closing Date, as the case may be, and the Company has complied
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the First Closing Date or the Second
Closing Date, as the case may be;
(ii) As of the date of this Agreement and at all times
subsequent thereto up to the delivery of such certificate, the Final Circular
did not and does not include an untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in light of the
circumstances in which made, not misleading, and, since the date of this
Agreement, there has occurred no event necessary to be set forth in an amended
or supplemented Final Circular in order to make any statements in such Final
Circular, in light of the circumstances under which made, not misleading, which
has not been so set forth; and
(iii) Subsequent to the respective dates as of which
information is given in the Final Circular, there has not been (a) any material
adverse change in the condition (financial or otherwise), earnings, business,
operations or business prospects of the Company and its subsidiaries considered
as one enterprise, (b) any transaction that is material to the Company and its
subsidiaries considered as one enterprise, except transactions entered into in
the ordinary course of business, (c) any obligation, direct or contingent,
incurred by the Company or any of its subsidiaries that is material to the
Company and its subsidiaries considered as one enterprise, except obligations
incurred in the ordinary course of business, (d) any change in the capital stock
or outstanding indebtedness of the Company or any of its subsidiaries which is
material to the Company and its subsidiaries considered as one enterprise,
except for the issuance of the Securities pursuant hereto, (e) except for
dividends declared on the Preferred Stock, any dividend or distribution of any
kind declared, paid or made on the capital stock of the Company or any of its
subsidiaries, or (f) any loss or damage (whether or not insured) to the property
of the Company or any of its subsidiaries which has been sustained or will have
been sustained which has a material adverse effect on the condition (financial
or otherwise), earnings, business, operations or business prospects of the
Company and its subsidiaries considered as one enterprise.
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(h) Registration Rights Agreement and Indenture. The Registration
Rights Agreement and the Indenture shall have been executed and delivered by all
parties;
(i) Lock-up Agreement from Certain Stockholders. The Company
shall have obtained and delivered to you an agreement substantially in the form
of Exhibit A attached hereto from each executive officer and director of the
Company.
(j) Compliance with Indebtedness Covenants. You shall have
received on the First Closing Date and Second Closing Date, as the case may be,
a certificate of the Company, dated the Closing Date or Second Closing Date, as
the case may be, signed on behalf of the Company by either the Chief Executive
Officer and Chief Financial Officer of the Company, to the effect that, and you
shall be satisfied that:
(i) The only indenture, mortgage, deed of trust, loan
agreement, bond, debenture, note agreement or other evidence of indebtedness to
which the Company or any of its subsidiaries is a party or by which any of them
are bound is the following (true, correct and complete copies of which have been
delivered to counsel for the Initial Purchasers).
(A) Letter Agreement, dated September 27, 1996, by and among
Fleet National Bank, the Company, Alkermes Controlled Therapeutics, Inc. ("ACT
I") and Alkermes Controlled Therapeutics Inc. II ("ACT II"), and related
evidence of indebtedness, as amended by the First Loan Supplement and
Modification agreement dated June 2, 1997 and related agreements and evidence of
indebtedness, by the Second Loan Supplement and Modification Agreement dated
March 19, 1998, and related agreements and evidence of indebtedness, and by the
Third Loan Supplement and Modification Agreement dated September 24, 1998, and
related agreements and evidence of indebtedness; Security Agreement, dated as of
September 27, 1996, by and among the Company, ACT I, ACT II and Fleet National
Bank; Pledge Agreement, dated as of September 27, 1996, between the Company and
Fleet National Bank; and Mortgage and Security Agreement, dated as of September
27, 1996, between ACT II and Fleet National Bank;
(B) Indenture dated as of March 1, 1998, between the Company and
State Street Bank and Trust Company, as trustee with respect to the 6-1/2%
Convertible Subordinated Debentures of the Company; and
(C) Promissory Note dated October 8, 1998 in the principal amount
of $5,983,292 issued by ACT I and Schering Corporation.
(ii) As of the First Closing Date and any Second Closing
Date, as the case may be, the Company is not in breach of, or default under the
provisions of the agreements and instruments referred to in paragraph (i) above,
and the issuance and sale by the Company of the Firm Securities and Option
Securities would not result in a breach of, or constitute a default under, the
provisions of the agreements and instruments referred to in paragraph (i) above
including, without limitation, with respect to the financial covenants in such
agreements and instruments. The Company will attach as an exhibit to such
certificate the computations demonstrating the compliance of such financial
covenants. Such computations have been made in conformity with the provisions
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of such agreements and instruments, and the terms used in such agreements and
instruments, and the terms used in such computations have the meanings assigned
thereto in such agreements and instruments.
(iii) Attached as an exhibit to such certificate are
copies of any required waivers or amendments or consents in respect of the
agreements referred to above.
(iv) To such officers' knowledge (after reasonable
inquiry), as of the date of this Agreement, and as of the First Closing Date or
any Second Closing Date, as the case may be, no condition exists which, with the
giving of notice or passage of time, would constitute a default or breach
referred to in Paragraph (ii) above.
(k) Additional Documents. On or before each of the First Closing
Date and the Second Closing Date, as the case may be, the Initial Purchasers and
counsel for the Initial Purchasers shall have received such information,
documents and opinions as they may reasonably require for the purposes of
enabling them to pass upon the issuance and sale of the Securities as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.
If any condition specified in this Section 4 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Initial Purchasers by notice to the Company at any time on or prior to the First
Closing Date and, with respect to the Option Securities, at any time prior to
the Second Closing Date, which termination shall be without liability on the
part of any party to any other party, except that Section 5 (Payment of
Expenses), Section 6 (Reimbursement of Initial Purchasers' Expenses), Section 7
(Indemnification and Contribution) and Section 10 (Representations and
Indemnities to Survive Delivery) shall at all times be effective and shall
survive such termination.
SECTION 5. PAYMENT OF EXPENSES. The Company agrees to pay all costs, fees
and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation (i) all expenses incident to the issuance and delivery of the
Firm Securities and the Option Securities (including all printing and engraving
costs), (ii) all fees and expenses of the registrar and transfer agent, (iii)
all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Securities to the Initial Purchasers, (iv) all fees and
expenses of the Company's counsel, independent public or certified public
accountants and other advisors, (v) all costs and expenses incurred in
connection with the preparation, printing, filing, shipping and distribution of
the Final Circular (including financial statements, exhibits, schedules,
consents and certificates of experts) and each Preliminary Circular, and all
amendments and supplements thereto, and this Agreement, the Indenture and the
Registration Rights Agreement (vi) all filing fees, attorneys' fees and expenses
incurred by the Company or the Initial Purchasers in connection with qualifying
(or obtaining exemptions from the qualification of) all or any part of the
Securities for offer and sale under the state securities or blue sky laws or the
provincial securities laws of Canada or any other country, and, if requested by
the Initial Purchasers, preparing and printing a "Blue Sky Survey", an
"International Blue Sky Survey" or other
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memorandum, and any supplements thereto, advising the Initial Purchasers of such
qualifications, registrations and exemptions, (vii) the fees and expenses of the
Trustee and Trustee's counsel in connection with the Indenture and the
Securities; (viii) the fees and expenses, if any, incurred in connection with
the admission of such Securities for trading in The Portal Market and for
clearance and settlement through DTC, if applicable, and listing of the
Underlying Securities on the Nasdaq National Market; and (ix) all costs and
expenses incident to the preparation and undertaking of "road show" preparations
to be made to prospective investors. Except as provided in this Section 5,
Section 6, and Section 7 hereof, the Initial Purchasers shall pay their own
expenses, including the fees and disbursements of their counsel.
SECTION 6. REIMBURSEMENT OF INITIAL PURCHASERS' EXPENSES. If this
Agreement is terminated by the Initial Purchasers pursuant to Section 4 or
Section 9, or if the sale to the Initial Purchasers of the Securities on the
First Closing Date is not consummated because of any refusal, inability or
failure on the part of the Company to perform any agreement herein or to comply
with any provision hereof, the Company agrees to reimburse the Initial
Purchasers severally, upon demand for all out-of-pocket expenses that shall have
been reasonably incurred by the Initial Purchasers in connection with the
proposed purchase and the offering and sale of the Securities, including but not
limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile and telephone charges.
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification of the Initial Purchaser.
(i) The Company agrees to indemnify and hold harmless each
Initial Purchaser, its officers and employees, and each person, if any, who
controls any Initial Purchaser within the meaning of the Securities Act and the
Exchange Act against any loss, claim, damage, liability or expense, as incurred,
to which such Initial Purchaser or such controlling person may become subject,
under the Securities Act, the Exchange Act or other Federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company, which consent shall not be unreasonably withheld), insofar as such
loss, claim,
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damage, liability or expense (or actions in respect thereof as contemplated
below) arises out of or is based (i) upon any untrue statement or alleged untrue
statement of a material fact contained in any Circular (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or (ii) in whole or in
part upon any inaccuracy in the representations and warranties of the Company
contained herein; or (iii) in whole or in part upon any failure of the Company
to perform its obligations hereunder or under law; or (iv) any act or failure to
act or any alleged act or failure to act by any Initial Purchaser in connection
with, or relating in any manner to, the Securities or the offering contemplated
hereby, and which is included as part of or referred to in any loss, claim,
damage, liability or action arising out of or based upon any matter covered by
clause (i), (ii) or (iii) above, provided that the Company shall not be liable
under this clause (iv) to the extent that a court of competent jurisdiction
shall have determined by a final judgment that such loss, claim, damage,
liability or action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Initial Purchaser through its bad
faith or willful misconduct; and to reimburse each Initial Purchaser and each
such controlling person for any and all expenses (including the reasonable fees
and disbursements of counsel chosen by FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.) as
such expenses are reasonably incurred by such Initial Purchaser or such
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the foregoing indemnity agreement shall not
apply to any loss, claim, damage, liability or expense to the extent, but only
to the extent, arising out of or based upon any untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with written information furnished to the Company by the Initial
Purchasers expressly for use in any Circular (or any amendment or supplement
thereto); and provided, further, that with respect to the Preliminary Circular,
the foregoing indemnity agreement shall not inure to the benefit of any Initial
Purchaser from whom the person asserting any loss, claim, damage, liability or
expense purchased Securities, or any person controlling such Initial Purchaser,
if copies of the Final Circular were timely delivered to the Initial Purchaser
pursuant to Section 2 and a copy of the Final Circular (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Initial Purchaser to such
person, at or prior to the written confirmation of the sale of the Securities to
such person, and if the Final Circular (as so amended or supplemented) would
have cured the defect giving rise to such loss, claim, damage, liability or
expense. The indemnity agreement set forth in this Section 7(a) shall be in
addition to any liabilities that the Company may otherwise have.
(b) Indemnification of the Company, its Directors and Officers.
Each Initial Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company, each of its directors, each of its officers and each
person, if any, who controls the Company within the meaning of the Securities
Act and the Exchange Act, against any loss, claim, damage, liability or expense,
as incurred, to which the Company, or any such director, officer or controlling
person may become subject, under the Securities Act, the Exchange Act, or other
Federal or state statutory law or regulation, or at common law or otherwise
(including in settlement of any litigation, if such settlement is effected with
the written consent of such Initial Purchaser, which consent shall not be
unreasonably withheld), insofar as such loss, claim, damage, liability or
expense (or actions in respect thereof as contemplated below) arises out of or
is based upon any untrue or alleged untrue statement of a material fact
contained in any Circular (or any amendment or supplement thereto), or arises
out of or is 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 Circular (or any amendment or supplement thereto), in
reliance upon and in conformity with written information furnished to the
Company by the Initial Purchasers expressly for use therein; and to reimburse
the Company, or any such director, officer or controlling person for any legal
and other expense reasonably incurred by the Company, or any such director,
officer or controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action. The indemnity
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agreement set forth in this Section 7(b) shall be in addition to any liabilities
that each Initial Purchaser may otherwise have.
(c) Information Provided by the Initial Purchasers. The Company
hereby acknowledges that the only information that the Initial Purchasers have
furnished to the Company expressly for use in any Circular (or any amendment or
supplement thereto) are the statements set forth in the last sentence of the
last paragraph on the front cover page of the Circular, the table in the first
paragraph under the caption "Plan of Distribution" in the Circular, and the
third paragraph, the last two sentences of the eleventh paragraph and the
twelfth paragraph under the caption "Plan of Distribution" in the Circular; and
the Initial Purchasers confirm that such statements are correct.
(d) Notifications and Other Indemnification Procedures. Promptly
after receipt by an indemnified party under this Section 7 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 7, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability which
it may have to any indemnified party for contribution or otherwise than under
the indemnity agreement contained in this Section 7 or to the extent it is not
prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent that it shall elect,
jointly with all other indemnifying parties similarly notified, by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the
defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that a conflict may arise between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of such indemnifying
party's election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof unless (i) the indemnified party shall have employed separate counsel in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (together with local counsel), approved by the
indemnifying party (FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. in the case of Section
7(b)), representing the indemnified parties who are parties to such action),
(ii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of commencement of such action, or (iii) the indemnifying party has
authorized the employment of counsel for the indemnified party at the expense of
the indemnifying
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party, in each of which cases the reasonable fees and expenses of counsel shall
be at the expense of the indemnifying party.
(e) Settlements. The indemnifying party under this Section 7
shall not be liable for any settlement of any proceeding effected without its
written consent, which consent shall not be unreasonably withheld, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in
any pending or threatened action, suit or proceeding in respect of which any
indemnified party is or could have been a party and indemnity was or could have
been sought hereunder by such indemnified party, unless such settlement,
compromise or consent includes (i) an unconditional release of such indemnified
party from all liability on claims that are the subject matter of such action,
suit or proceeding 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.
(f) Contribution. If the indemnification provided for in this
Section 7 is unavailable to or insufficient to hold harmless an indemnified
party under Section 7(a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Initial
Purchasers on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law then each indemnifying party shall contribute to such amount paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Initial Purchasers on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Initial Purchaser 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 bears to the total underwriting
discounts and commissions received by the Initial Purchasers, in each case as
set forth in the table on the cover page of the Final Circular. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Initial Purchasers on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and Initial Purchasers agree that it would not be
just and equitable if contributions pursuant to this Section 7(f) were
determined by pro rata allocation (even if the Initial Purchasers were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
Section 7(f). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this
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Section 7(f) 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 (f),
(i) no Initial Purchaser shall be required to contribute any amount in excess of
the underwriting discounts and commissions applicable to the Securities
purchased by such Initial Purchaser and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Initial Purchasers' obligations in this
Section 7(f) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(g) Timing of Any Payments of Indemnification. Any losses,
claims, damages, liabilities or expenses for which an indemnified party is
entitled to indemnification or contribution under this Section 7 shall be paid
by the indemnifying party to the indemnified party as such losses, claims,
damages, liabilities or expenses are incurred, but in all cases, no later than
thirty (30) days of invoice to the indemnifying party.
(h) Survival. The indemnity and contribution agreements contained
in this Section 7 and the representations and warranties of the Company set
forth in this Agreement shall remain operative and in full force and effect,
regardless of (i) any investigation made by or on behalf of any Initial
Purchaser or any person controlling any Initial Purchaser, the Company, its
directors or officers or any persons controlling the Company, (ii) acceptance of
any Securities and payment therefor hereunder, and (iii) any termination of this
Agreement. A successor to any Initial Purchaser, or to the Company, its
directors or officers, or any person controlling the Company, shall be entitled
to the benefits of the indemnity, contribution and reimbursement agreements
contained in this Section 7.
(i) Acknowledgements of Parties. The parties to this Agreement
hereby acknowledge that they are sophisticated business persons who were
represented by counsel during the negotiations regarding the provisions hereof
including, without limitation, the provisions of this Section 7, and are fully
informed regarding said provisions. They further acknowledge that the provisions
of this Section 7 fairly allocate the risks in light of the ability of the
parties to investigate the Company and its business in order to assure that
adequate disclosure is made in the Circular.
SECTION 8. DEFAULT OF ONE OR MORE OF THE SEVERAL INITIAL PURCHASERS. If, on
the First Closing Date or the Second Closing Date, as the case may be, any one
or more of the several Initial Purchasers shall fail or refuse to purchase
Securities that it or they have agreed to purchase hereunder on such date, and
the aggregate principal amount of Firm Securities, or Option Securities, as the
case may be, which such defaulting Initial Purchaser or Initial Purchasers
agreed but failed or refused to purchase does not exceed 10% of the aggregate
principal amount of the Securities to be purchased on such date, the other
Initial Purchasers shall be obligated, severally, in the proportions that the
principal amount of Firm Securities set forth opposite their respective names on
Schedule A bears to the principal amount of Firm Securities set forth opposite
the names of all such non-defaulting Initial Purchasers, or in such other
proportions as may be specified by the Initial Purchasers with the consent of
the non-defaulting Initial Purchasers, to purchase the Securities which such
defaulting
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Initial Purchaser or Initial Purchasers agreed but failed or refused to purchase
on such date. If, on the First Closing Date or the Second Closing Date, as the
case may be, any one or more of the Initial Purchasers shall fail or refuse to
purchase Securities and the aggregate principal amount of Securities with
respect to which such default occurs exceeds 10% of the aggregate principal
amount of Securities to be purchased on such date, and arrangements satisfactory
to the Initial Purchasers and the Company for the purchase of such Securities
are not made within 48 hours after such default, this Agreement shall terminate.
In the event of any termination of this Agreement pursuant to the preceding
sentence of this Section 8, the Company shall not be liable to any Initial
Purchaser (except as provided in Sections 5, 6 and 7 hereof) and no Initial
Purchaser (other than an Initial Purchaser who shall have failed, otherwise than
for some reason permitted under this Agreement, to purchase the number of Firm
Shares agreed by such Initial Purchaser to be purchased hereunder, which Initial
Purchaser shall remain liable to the Company and the other Initial Purchasers
for damages, if any, resulting from such default) shall be liable to the Company
(except to the extent provided in Sections 5 and 7 hereof). In any such case
either the Initial Purchasers or the Company shall have the right to postpone
the First Closing Date or the Second Closing Date, as the case may be, but in no
event for longer than seven days in order that the required changes, if any, to
the Final Circular or any other documents or arrangements may be effected.
As used in this Agreement, the term "Initial Purchaser" shall be deemed
to include any person substituted for a defaulting Initial Purchaser under this
Section 8. Any action taken under this Section 8 shall not relieve any
defaulting Initial Purchaser from liability in respect of any default of such
Initial Purchaser under this Agreement.
SECTION 9. TERMINATION OF THIS AGREEMENT. Prior to the First Closing
Date, this Agreement may be terminated by the Initial Purchasers by notice given
to the Company if at any time (i) trading or quotation in any of the Company's
securities shall have been suspended or limited by the Commission or by the
Nasdaq Stock Market or trading in securities generally on either the Nasdaq
Stock Market or the New York Stock Exchange shall have been suspended or
limited, or minimum or maximum prices shall have been generally established on
any of such stock exchanges by the Commission or the National Association of
Securities Dealers, LLC; (ii) a general banking moratorium shall have been
declared by any of Federal, New York, Pennsylvania or California authorities;
(iii) there shall have occurred any outbreak or escalation of national or
international hostilities or any crisis or calamity, or any change in the United
States or international financial markets, or any substantial change or
development involving a prospective change in United States' or international
political, financial or economic conditions, as in the judgment of the Initial
Purchasers is material and adverse and makes it impracticable or inadvisable to
market the Securities in the manner and on the terms described in the Final
Circular or to enforce contracts for the sale of securities; (iv) in the
judgment of the Initial Purchasers there shall have occurred any Material
Adverse Change; or (v) the Company shall have sustained a loss by strike, fire,
flood, earthquake, accident or other calamity of such character as in the
judgment of the Initial Purchasers may interfere materially with the conduct of
the business and operations of the Company regardless of whether or not such
loss shall have been insured. Any termination pursuant to this Section 9 shall
be without liability on the part of (a) the Company to any Initial Purchaser,
except that the Company shall be obligated to reimburse the expenses of the
Initial Purchasers and the Initial Purchasers pursuant to
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Sections 5 and 6 hereof, (b) any Initial Purchaser to the Company, or (c) of any
party hereto to any other party except that the provisions of Section 7 shall at
all times be effective and shall survive such termination.
SECTION 10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company, of its officers and of the several Initial Purchasers
set forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of any Initial
Purchaser or the Company or any of its or their partners, officers or directors
or any controlling person, as the case may be, and will survive delivery of and
payment for the Securities sold hereunder and any termination of this Agreement.
SECTION 11. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Initial Purchasers:
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
If to the Company:
Alkermes, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
With a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.
Any party hereto may change the address for receipt of communications
by giving written notice to the others.
SECTION 12. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto, including any substitute Initial Purchasers
pursuant to Section 8 hereof, and to the benefit of the employees, officers and
directors and controlling persons referred to in Section 7, and to their
respective successors, and no other person will have any right or obligation
hereunder. The
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term "successors" shall not include any purchaser of the Securities as such from
any of the Initial Purchasers merely by reason of such purchase.
SECTION 13. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of
any Section, paragraph or provision of this Agreement shall not affect the
validity or enforceability of any other Section, paragraph or provision hereof.
If any Section, paragraph or provision of this Agreement is for any reason
determined to be invalid or unenforceable, there shall be deemed to be made such
minor changes (and only such minor changes) as are necessary to make it valid
and enforceable.
SECTION 14. GOVERNING LAW PROVISIONS.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SUCH STATE.
(b) Consent to Jurisdiction. Any legal suit, action or
proceeding arising out of or based upon this Agreement or the transactions
contemplated hereby ("Related Proceedings") may be instituted in the federal
courts of the United States of America located in the City and County of San
Francisco or the courts of the State of California in each case located in the
City and County of San Francisco (collectively, the "Specified Courts"), and
each party irrevocably submits to the exclusive jurisdiction (except for
proceedings instituted in regard to the enforcement of a judgment of any such
court (a "Related Judgment"), as to which such jurisdiction is non-exclusive) of
such courts in any such suit, action or proceeding. Service of any process,
summons, notice or document by mail to such party's address set forth above
shall be effective service of process for any suit, action or other proceeding
brought in any such court. The parties irrevocably and unconditionally waive any
objection to the laying of venue of any suit, action or other proceeding in the
Specified Courts and irrevocably and unconditionally waive and agree not to
plead or claim in any such court that any such suit, action or other proceeding
brought in any such court has been brought in an inconvenient forum. Each party
not located in the United States irrevocably appoints CT Corporation System,
which currently maintains a San Francisco office at ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of America, as its agent to receive
service of process or other legal summons for purposes of any such suit, action
or proceeding that may be instituted in any state or federal court in the City
and County of San Francisco.
(c) Waiver of Immunity. With respect to any Related
Proceeding, each party irrevocably waives, to the fullest extent permitted by
applicable law, all immunity (whether on the basis of sovereignty or otherwise)
from jurisdiction, service of process, attachment (both before and after
judgment) and execution to which it might otherwise be entitled in the Specified
Courts, and with respect to any Related Judgment, each party waives any such
immunity in the Specified Courts or any other court of competent jurisdiction,
and will not raise or claim or cause to be pleaded any such immunity at or in
respect of any such Related Proceeding or Related Judgment, including, without
limitation, any immunity pursuant to the United States Foreign Sovereign
Immunities Act of 1976, as amended.
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SECTION 15. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
The Section headings herein are for the convenience of the parties only and
shall not affect the construction or interpretation of this Agreement.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
ALKERMES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President, Chief Financial
Officer and Treasurer
The foregoing Purchase Agreement is hereby confirmed and accepted by
the Initial Purchasers as of the date first above written.
FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, INC.
ING BARINGS LLC
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
PAINEWEBBER INCORPORATED
▇▇ ▇▇▇▇▇ SECURITIES CORPORATION
U.S. BANCORP ▇▇▇▇▇ ▇▇▇▇▇▇▇ INC.
BY: FLEETBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------
Authorized Signatory
32
SCHEDULE A
Aggregate Principal Amount
of Firm Securities to be
Initial Purchasers Purchased
------------------------------------------------------------------------------------------------------------------
FleetBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc. $128,000,000
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc....................................................... 12,000,000
ING Barings LLC................................................................... 12,000,000
▇.▇. ▇▇▇▇▇▇ Securities Inc........................................................ 12,000,000
PaineWebber Incorporated.......................................................... 12,000,000
▇▇ ▇▇▇▇▇ Securities Corporation................................................... 12,000,000
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.................................................... 12,000,000
------------------
Total......................................................................... $ 200,000,000
==================