ARIAD PHARMACEUTICALS, INC.
6,438,114 Shares of Common Stock
PLACEMENT AGENCY AGREEMENT
October 3, 2003
▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sir or Madam:
ARIAD Pharmaceuticals, Inc., a Delaware corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to issue and sell
6,438,114 shares (the "Shares") of common stock, par value $.001 per share (the
"Common Stock"), to certain investors (collectively, the "Investors"). The
Company desires to engage ▇▇▇▇▇▇ Brothers Inc. as its lead placement agent (the
"Lead Placement Agent") and ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc. as its co-placement agent
(the "Co-Placement Agent," and together with the Lead Placement Agent, the
"Placement Agents") in connection with such issuance and sale. The Shares are
described more fully in the Registration Statement (as hereinafter defined).
The Company hereby confirms as follows its agreements with the Placement
Agents:
1. Agreement to Act as Placement Agents. On the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions of this Agreement, the Placement Agents
agree to act as the Company's non-exclusive Placement Agents in connection with
the issuance and sale, on a best efforts basis, by the Company of the Shares to
the Investors. Upon the occurrence of the Closing (as hereinafter defined), the
Company shall pay to the Placement Agents 6.5% of the proceeds received by the
Company from the sale of the Shares as set forth on the cover page of the
Prospectus (as hereinafter defined).
2. Delivery and Payment. Concurrently with the execution and delivery of
this Agreement, the Company, the Placement Agents, and JPMorgan Chase Bank, as
escrow agent (the "Escrow Agent"), shall enter into an Escrow Agreement
substantially in the form of Exhibit A attached hereto (the "Escrow Agreement"),
pursuant to which an escrow account will be established, at the Company's
expense, for the benefit of the Company and the Investors (the "Escrow
Account"). Prior to the Closing Date (as hereinafter defined), (i) each of the
Investors will deposit in the Escrow Account an amount equal to the price per
Share as shown on the cover page of the Prospectus multiplied by the number of
Shares to be purchased by such Investor, and (ii) the Escrow Agent will notify
the Company and the Placement Agents in writing whether the Investors have
deposited in the Escrow Account funds in the amount equal to the proceeds of the
sale of all of the Shares offered hereby (the "Requisite Funds"). At 10:00 a.m.,
New York City time, on October 8, 2003 or at such other time on such other date
as may be agreed upon by the Company and the Placement Agents but in no event
prior to the date on which the Escrow Agent shall have received all of the
Requisite Funds (such date is hereinafter referred to as the "Closing Date"),
the Escrow Agent will disburse the Requisite Funds from the Escrow Account to
the Company and the Placement Agents as provided in the Escrow Agreement and the
Company shall deliver the Shares to the Investors, which delivery may be made
through the facilities of the Depository Trust Company. The closing of the sale
of the Shares to the Investors (the "Closing") shall take place at the office of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, 1290 Avenue of the Americas, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇-▇▇▇▇. All actions taken at the Closing shall be deemed to have occurred
simultaneously.
Certificates evidencing the Shares shall be in definitive form and shall
be registered in such names and in such denominations as the Placement Agents
shall request by written notice to the Company.
3. Representations and Warranties of the Company. The Company represents
and warrants to the Placement Agents that:
(a) Registration Statement. The Company has filed with the Securities and
Exchange Commission (the "Commission") a "shelf" registration statement on Form
S-3 (Registration No. 333-106788), which has become effective, relating to the
Common Stock, under the Securities Act of 1933, as amended (the "Act"), and the
rules and regulations (collectively referred to as the "Rules and Regulations")
of the Commission promulgated thereunder. The registration statement, as amended
at the time it became effective, including the exhibits and information (if any)
deemed to be part of the registration statement at the time of effectiveness
pursuant to Rule 430A or 434(d) under the Act, is hereinafter referred to as the
"Registration Statement." No stop order suspending the effectiveness of the
Registration Statement has been issued and, to the Company's knowledge, no
proceeding for that purpose has been initiated or threatened by the Commission.
The Company, if required by the Rules and Regulations of the Commission,
proposes to file the Prospectus (as defined below) with the Commission pursuant
to Rule 424(b) of the Rules and Regulations. The Prospectus, in the form in
which it is to be filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations, or, if the Prospectus is not to be filed with the Commission
pursuant to Rule 424(b), the Prospectus in the form included as part of the
Registration Statement at the time the Registration Statement became effective,
is hereinafter referred to as the "Prospectus," except that if any revised
prospectus or prospectus supplement shall be provided to the Placement Agents by
the Company for use in connection with the offering and sale of the Shares which
differs from the Prospectus (whether or not such revised prospectus or
prospectus supplement is required to be filed by the Company pursuant to Rule
424(b) of the Rules and Regulations), the term "Prospectus" shall refer to such
revised prospectus or prospectus supplement, as the case may be, from and after
the time it is first provided to the Placement Agents for such use. Any
preliminary prospectus or prospectus subject to completion included in the
Registration Statement or filed with the Commission pursuant to Rule 424 under
the Act is hereafter called a "Preliminary Prospectus." Any reference herein to
the Registration Statement, any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 which were filed under the Securities
Exchange Act of 1934, as amended (the
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"Exchange Act") on or before the last to occur of the effective date of the
Registration Statement, the date of the Preliminary Prospectus, or the date of
the Prospectus, and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include (i) the
filing of any document under the Exchange Act after the effective date of the
Registration Statement, the date of such Preliminary Prospectus or the date of
the Prospectus, as the case may be, which is incorporated therein by reference
and (ii) any such document so filed.
(b) Registration Statement and Prospectus. When the Registration Statement
became effective, upon the filing or first delivery to the Investors of the
Prospectus, as of the date hereof, and at the Closing Date, the Registration
Statement (and any post-effective amendment thereto) and the Prospectus (as
amended or as supplemented if the Company shall have filed with the Commission
any amendment or supplement to the Registration Statement or the Prospectus)
contained and will contain all statements which are required to be stated
therein in accordance with the Act and the Rules and Regulations, complied and
will comply in all material respects with the Act and the Rules and Regulations,
and did not and will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein (in the light of the circumstances under which they were
made, in the case of the Prospectus) not misleading, each Preliminary
Prospectus, as of the date filed with the Commission, did not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; except that no
representation or warranty is made in this Section 3(b) with respect to
statements or omissions made in reliance upon and in conformity with written
information furnished to the Company expressly for inclusion in any Preliminary
Prospectus, the Registration Statement, or the Prospectus, or any amendment or
supplement thereto, as stated in Section 7(b) hereof. The Company has not
distributed any offering material in connection with the offering and sale of
the Shares, other than the Registration Statement, the Preliminary Prospectus
and the Prospectus.
(c) Financial Statements. The consolidated financial statements and the
related notes thereto included or incorporated by reference in the Registration
Statement and the Prospectus comply in all material respects with the applicable
requirements of the Act and the Exchange Act, as applicable, and present fairly,
in all material respects, the consolidated financial position of the Company and
its subsidiaries as of the dates indicated and the results of their operations
and the changes in their consolidated cash flows for the periods specified; such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis throughout the periods
covered thereby (except as otherwise stated therein and subject, in the case of
unaudited financial statements, to the absence of footnotes and normal year end
adjustments), and the supporting schedules included or incorporated by reference
in the Registration Statement present fairly the information required to be
stated therein; and the other financial information included or incorporated by
reference in the Registration Statement and the Prospectus has been derived from
the accounting records of the Company and its subsidiaries and presents fairly
the information shown thereby.
(d) No Material Adverse Change. Except as set forth in or otherwise
contemplated by the Registration Statement or the Prospectus, since the date of
the most recent financial statements of the Company included or incorporated by
reference in the Registration Statement
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and the Prospectus and prior to Closing, (i) there has not been and will not
have been any change in the capital stock of the Company (except for changes in
the number of outstanding shares of Common Stock of the Company due to the
issuance of shares upon the exercise of stock options or the sale of shares
pursuant to the Company's employee stock purchase plan) or long-term debt of the
Company or any of its Subsidiaries (except for payments made in the ordinary
course of business) or any dividend or distribution of any kind declared, set
aside for payment, paid or made by the Company on any class of capital stock, or
any material adverse change, or any development that would reasonably be
expected to result in a material adverse change, in or affecting the business,
properties, management, consolidated financial position, stockholders' equity,
or results of operations of the Company and its Subsidiaries taken as a whole (a
"Material Adverse Change"); (ii) neither the Company nor any of its Subsidiaries
has entered or will enter into any transaction or agreement, not in the ordinary
course of business, that is material to the Company and its Subsidiaries taken
as a whole or incurred or will incur any liability or obligation, direct or
contingent, not in the ordinary course of business, that is material to the
Company and its Subsidiaries taken as a whole; and (iii) neither the Company nor
any of its Subsidiaries has sustained or will sustain any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor disturbance or dispute or
any action, order or decree of any court or arbitrator or governmental or
regulatory authority, except in each case as otherwise disclosed in the
Registration Statement and the Prospectus.
(e) Organization. The Company and each of its Subsidiaries are, and at the
Closing Date will be, duly organized, validly existing as a corporation and in
good standing under the laws of their respective jurisdictions of organization.
The Company and each of its Subsidiaries are, and will be at the Closing Date,
duly qualified as a foreign corporation for transaction of business and in good
standing under the laws of each other jurisdiction in which their respective
ownership or lease of property or the conduct of their respective businesses
requires such qualification, and have, and at the Closing Date will have, all
corporate power and authority necessary to own or hold their respective
properties and to conduct their respective businesses as described in the
Registration Statement and the Prospectus, except where the failure to be so
qualified or in good standing or have such power or authority would not,
individually or in the aggregate, have a material adverse effect or would
reasonably be expected to have a material adverse effect on or affecting the
business, properties, management, consolidated financial position, stockholders'
equity or results of operations of the Company and its Subsidiaries taken as a
whole (a "Material Adverse Effect"). The subsidiaries listed in Schedule 1 to
this Agreement (the "Subsidiaries") are the only significant subsidiaries of the
Company.
(f) Capitalization. The issued and outstanding shares of capital stock of
the Company have been validly issued, are fully paid and nonassessable and,
other than as disclosed in or contemplated by the Registration Statement or the
Prospectus, are not subject to any preemptive or similar rights. The Company has
an authorized, issued and outstanding capitalization as set forth in the
Registration Statement and the Prospectus as of the dates referred to therein
(other than the grant of additional options under the Company's existing stock
option plans, or changes in the number of outstanding shares of Common Stock of
the Company due to the issuance of shares upon the exercise of stock options or
the sale of shares pursuant to the Company's employee stock purchase plan) and
such authorized capital stock conforms in all material respects to the
description thereof set forth in the Registration Statement and the
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Prospectus. The description of the securities of the Company in the Registration
Statement and the Prospectus is, and at the Closing Date will be, complete and
accurate in all material respects. Except as disclosed in or contemplated by the
Registration Statement or the Prospectus, as of the date referred to therein,
the Company did not have outstanding any options to purchase, or any rights or
warrants to subscribe for, or any securities or obligations convertible into, or
exchangeable for, or any contracts or commitments to issue or sell, any shares
of capital stock or other securities.
(g) Due Authorization and Enforceability. The Company has full legal power
and authority to enter into this Agreement and the Escrow Agreement (together,
the "Transaction Documents") and to consummate the transactions contemplated
hereby and thereby. The Transaction Documents have been duly authorized,
executed and delivered by the Company and constitute legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms except as rights to indemnity and contribution thereunder
may be limited by federal or state securities laws and matters of public policy
and except as such enforceability may be subject to the effect of applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally and equitable principles of general applicability.
(h) The Shares. The Shares have been duly authorized by the Company and,
when issued and delivered and paid for as provided herein, will be validly
issued, fully paid and nonassessable and will conform in all material respects
to the descriptions thereof in the Prospectus; and the issuance of the Shares is
not subject to any preemptive or similar rights.
(i) No Violation or Default. Neither the Company nor any of its
Subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound or to which any of the
property or assets of the Company or of any of its Subsidiaries is subject; or
(iii) to the Company's knowledge, in violation of any law or statute or any
judgment, order, rule or regulation of any court or arbitrator or governmental
or regulatory authority, except, in the case of each of clauses (ii) and (iii)
above, for any such violation or default that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(j) No Conflicts. The execution, delivery and performance by the Company
of each of the Transaction Documents, the issuance and sale by the Company of
the Shares and the consummation by the Company of the transactions contemplated
by the Transaction Documents will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Company or any of its Subsidiaries pursuant to,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound or to which any of the
property or assets of the Company or any of its Subsidiaries is subject; (ii)
result in any violation of the provisions of the charter or by-laws or
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similar organizational documents of the Company or any of its Subsidiaries; or
(iii) to the Company's knowledge, result in the violation of any law or statute
or any judgment, order, rule or regulation of any court or arbitrator or
governmental or regulatory authority, except, in the case of each of clauses (i)
and (iii) above, for any such conflict, breach, violation, default, lien, charge
or encumbrance that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(k) No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any court or arbitrator or governmental
or regulatory authority is required for the execution, delivery and performance
by the Company of each of the Transaction Documents, the issuance and sale by
the Company of the Shares and the consummation by the Company of the
transactions contemplated by the Transaction Documents, except for the
registration of the Shares under the Act and such consents, approvals,
authorizations, orders and registrations or qualifications as may be required
under applicable state securities laws or by the by-laws and rules of the
National Association of Securities Dealers, Inc. ("NASD") in connection with the
purchase and distribution of the Shares by the Placement Agents.
(l) Legal Proceedings. Except as disclosed in or contemplated by the
Registration Statement or the Prospectus, there are no legal, governmental or
regulatory actions, suits or proceedings pending, nor, to the Company's
knowledge, any legal, governmental or regulatory investigations, to which the
Company or any of its Subsidiaries is a party or to which any property of the
Company or any of its Subsidiaries is the subject that, individually or in the
aggregate, if determined adversely to the Company or any of its Subsidiaries,
would reasonably be expected to have a Material Adverse Effect or materially and
adversely affect the ability of the Company to perform its obligations under the
Transaction Documents; to the Company's knowledge, no such actions, suits or
proceedings are threatened or contemplated by any governmental or regulatory
authority or threatened by others; and (i) to the Company's knowledge, there are
no current or pending legal, governmental or regulatory investigations, actions,
suits or proceedings that are required under the Act to be described in the
Prospectus that are not so described; and (ii) there are no contracts or other
documents that are required under the Act to be filed as exhibits to the
Registration Statement that are not so filed.
(m) Independent Accountants. Deloitte & Touche LLP, who have certified
certain financial statements of the Company and its Subsidiaries, are
independent public accountants (the "Accountants") with respect to the Company
and its subsidiaries as required by the Act.
(n) Title to Real and Personal Property. The Company and its Subsidiaries
have good and valid title in fee simple to all items of real property and good
and valid title to all personal property described in the Registration Statement
or the Prospectus as being owned by them that are material to the businesses of
the Company and its Subsidiaries taken as a whole, in each case free and clear
of all liens, encumbrances and claims except those that (i) do not materially
interfere with the use made and proposed to be made of such property by the
Company and its Subsidiaries or (ii) would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. Any real
property described in the Registration Statement or the Prospectus as being
leased by the Company and its Subsidiaries that is material to the business of
the Company and its Subsidiaries taken as a whole is held by them under valid,
existing and enforceable leases, except those that (A) do not materially
interfere with the use
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made or proposed to be made of such property by the Company or its Subsidiaries
or (B) would not be reasonably expected, individually or in the aggregate, to
have a Material Adverse Effect.
(o) Title to Intellectual Property. Except as disclosed in or contemplated
by the Registration Statement or the Prospectus, the Company and its
Subsidiaries own or possess adequate rights to use all material patents, patent
applications, trademarks, service marks, trade names, trademark registrations,
service ▇▇▇▇ registrations, copyrights, licenses and know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures) (collectively, the "Intellectual Property"),
necessary for the conduct of their respective businesses as conducted as of the
date hereof, except to the extent that the failure to own or possess adequate
rights to use such Intellectual Property would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; and the
Company and its Subsidiaries have not received any written notice of any claim
of infringement or conflict which asserted Intellectual Property rights of
others, which infringement or conflict, if the subject of an unfavorable
decision, would result in a Material Adverse Effect.
(p) No Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or any of its Subsidiaries, on the one hand,
and the directors, officers, stockholders, customers or suppliers of the Company
or any of its Subsidiaries, on the other, which is required by the Act to be
disclosed in the Registration Statement and the Prospectus and is not so
disclosed.
(q) Investment Company Act. The Company is not and, after giving effect to
the offering and sale of the Shares to be sold by the Company and the
application of the proceeds thereof as described in the Prospectus, will not be
an "investment company" or an entity "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and the
rules and regulations of the Commission promulgated thereunder (collectively,
"Investment Company Act").
(r) Taxes. The Company and its Subsidiaries have filed all material
federal, state, local and foreign tax returns which have been required to be
filed and paid all taxes shown thereon through the date hereof, to the extent
that such taxes have become due and are not being contested in good faith; and,
except as otherwise disclosed in or contemplated by the Registration Statement
or the Prospectus, no tax deficiency has been determined adversely to the
Company or any of its Subsidiaries which has had, or would reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(s) Licenses and Permits. The Company and its Subsidiaries possess or have
obtained all licenses, certificates, permits and other authorizations issued by,
and have made all declarations and filings with, the appropriate federal, state,
local or foreign governmental or regulatory authorities that are necessary for
the ownership or lease of their respective properties or the conduct of their
respective businesses as described in the Registration Statement and the
Prospectus (the "Permits"), except where the failure to possess, obtain or make
the same would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect; and except as disclosed in or contemplated by
the Registration Statement or the Prospectus, neither the Company nor any of its
Subsidiaries has received written notice of any proceeding relating to
revocation or modification of any such Permit or has any reason to believe that
such
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Permit will not be renewed in the ordinary course, except where the failure to
obtain any such renewal would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
(t) No Labor Disputes. No labor disturbance by or dispute with employees
of the Company or any of its Subsidiaries exists or, to the knowledge of the
Company, is threatened which would reasonably be expected to result in a
Material Adverse Effect.
(u) Compliance With Environmental Laws. The Company and its Subsidiaries
(i) are in compliance with any and all applicable federal, state, local and
foreign laws, rules, regulations, decisions and orders relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants (collectively, "Environmental
Laws"); (ii) have received and are in compliance with all material permits,
licenses or other approvals required of them under applicable Environmental Laws
to conduct their respective businesses as described in the Registration
Statement and the Prospectus; and (iii) have not received notice of any actual
or potential liability for the investigation or remediation of any disposal or
release of hazardous or toxic substances or wastes, pollutants or contaminants,
except, in the case of any of clauses (i), (ii) or (iii) above, for any such
failure to comply or failure to receive required permits, licenses, other
approvals or liability as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(v) Compliance With ERISA. Each material employee benefit plan, within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), that is maintained, administered or contributed to by the
Company or any of its affiliates for employees or former employees of the
Company and its Subsidiaries has been maintained in material compliance with its
terms and the requirements of any applicable statutes, orders, rules and
regulations, including but not limited to ERISA and the Internal Revenue Code of
1986, as amended (the "Code"); no prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the Code, has occurred which would
result in a material liability to the Company with respect to any such plan
excluding transactions effected pursuant to a statutory or administrative
exemption; and for each such plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no "accumulated funding
deficiency" as defined in Section 412 of the Code has been incurred, whether or
not waived, and the fair market value of the assets of each such plan (excluding
for these purposes accrued but unpaid contributions) exceeds the present value
of all benefits accrued under such plan determined using reasonable actuarial
assumptions.
(w) Accounting Controls. The Company and its Subsidiaries maintain systems
of internal accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with management's general or
specific authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (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
the existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
8
(x) Insurance. The Company and its Subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as the Company reasonably
believes are adequate for the conduct of its businesses as described in the
Registration Statement and the Prospectus and the value of its properties and as
is customary for companies engaged in similar businesses in similar industries.
(y) No Unlawful Payments. Neither the Company nor any of its Subsidiaries
has at anytime during the last five years (i) used any corporate funds for any
unlawful contribution to any candidate for public office; or (ii) made any
payment to any federal or state government officer or official or other person
charged with similar public duties, other than payments required or permitted by
the laws of the United States or any jurisdiction thereof.
(z) No Broker's Fees. Other than the Co-Placement Agent, neither the
Company nor any of its Subsidiaries is a party to any contract, agreement or
understanding with any person (other than this Agreement) that would give rise
to a valid claim against the Company or any of its Subsidiaries or the Placement
Agents for a brokerage commission, finder's fee or like payment in connection
with the offering and sale of the Shares.
(aa) No Registration Rights. No person has the right to require the
Company or any of its Subsidiaries to register any securities for sale under the
Act by reason of the filing of the Registration Statement with the Commission or
by reason of the issuance and sale of the Shares, except for rights which have
been waived.
(bb) No Stabilization. The Company has not taken, directly or indirectly,
any action designed to or that could reasonably be expected to cause or result
in any stabilization or manipulation of the price of the Shares.
(cc) Forward-Looking Statements. No forward-looking statement (within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act) (a "Forward Looking Statement") contained in the Registration Statement and
the Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith. The Forward Looking Statements
incorporated by reference in the Registration Statement and the Prospectus from
the Company's Annual Report on Form 10-K for the year ended December 31, 2002
and Quarterly Reports on Form 10-Q for the three month periods ending on March
31, 2003 and June 30, 2003 (i) are within the coverage of the safe harbor for
forward looking statements set forth in Section 27A of the Act, Rule 175(b)
under the Act or Rule 3b-6 under the Exchange Act, as applicable, (ii) were made
by the Company with a reasonable basis and in good faith and reflect the
Company's good faith reasonable best estimate of the matters described therein,
and (iii) have been prepared in accordance with Item 10 of Regulation S-K under
the Act.
(dd) Contracts. All material contracts to which the Company is a party
have been duly authorized, executed and delivered by the Company, constitute
valid and binding agreements of the Company, and are enforceable against the
Company in accordance with the terms thereof, subject to the effect of
applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally and equitable principles of general applicability.
9
(ee) Certificates. No statement, representation or warranty made in the
certificate to be delivered to the Placement Agents pursuant to Section 6(g)
below will be, when made, inaccurate, untrue or incorrect in any material
respect.
4. Further Agreements of the Company. The Company covenants and agrees
with the Placement Agents that:
(a) Effectiveness. The Registration Statement has become effective, and if
Rule 430A is used or the filing of the Prospectus is otherwise required under
Rule 424(b), the Company will file the Prospectus (properly completed if Rule
430A has been used) pursuant to Rule 424(b) within the prescribed time period
and will provide a copy of such filing to the Placement Agents promptly
following such filing.
(b) Amendments or Supplements. The Company will not, during such period as
the Prospectus would be required by law to be delivered in connection with sales
of the Shares by an underwriter or dealer in connection with the offering
contemplated by this Agreement, file any amendment or supplement to the
Registration Statement or the Prospectus, except as required by law, unless a
copy thereof shall first have been submitted to the Placement Agents within a
reasonable period of time prior to the filing thereof and the Placement Agents
shall not have reasonably objected thereto in good faith.
(c) Notice to Placement Agents. The Company will notify the Placement
Agents promptly, and will, if requested, confirm such notification in writing,
(1) when any post-effective amendment to the Registration Statement becomes
effective, but only during the period mentioned in Section 4(b); (2) of any
request by the Commission for any amendments to the Registration Statement or
any amendment or supplements to the Prospectus or for additional information,
but only during the period mentioned in Section 4(b); (3) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation of any proceedings for that purpose or the threat
thereof, but only during the period mentioned in Section 4(b); (4) of becoming
aware of the occurrence of any event during the period mentioned in Section 4(b)
that in the judgment of the Company makes any statement made in the Registration
Statement or the Prospectus untrue in any material respect or that requires the
making of any changes in the Registration Statement or the Prospectus in order
to make the statements therein, in light of the circumstances in which they are
made, not misleading; and (5) of receipt by the Company of any notification with
respect to any suspension of the qualification of the Shares for offer and sale
in any jurisdiction. If at any time the Commission shall issue any order
suspending the effectiveness of the Registration Statement in connection with
the offering contemplated hereby, the Company will make every reasonable effort
to obtain the withdrawal of any such order at the earliest possible moment. If
the Company has omitted any information from the Registration Statement,
pursuant to Rule 430A, it will use its best efforts to comply with the
provisions of and make all requisite filings with the Commission pursuant to
said Rule 430A and to notify the Placement Agents promptly of all such filings.
(d) Ongoing Compliance of the Prospectus. If, at any time when a
Prospectus relating to the Shares is required to be delivered under the Act, the
Company becomes aware of the occurrence of any event as a result of which the
Prospectus, as then amended or
10
supplemented, would, in the reasonable judgment of counsel to the Company or
counsel to the Placement Agents, include any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or the Registration Statement, as then amended or supplemented,
would, in the reasonable judgment of counsel to the Company or counsel to the
Placement Agents, include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein not misleading,
or if for any other reason it is necessary, in the reasonable judgment of
counsel to the Company or counsel to the Placement Agents, at any time to amend
or supplement the Prospectus or the Registration Statement to comply with the
Act or the Rules and Regulations, the Company will promptly notify the Placement
Agents and, subject to Section 4(b) hereof, will promptly prepare and file with
the Commission, at the Company's expense, an amendment to the Registration
Statement or an amendment or supplement to the Prospectus that corrects such
statement or omission or effects such compliance and will deliver to the
Placement Agents, without charge, such number of copies thereof as the Placement
Agents may reasonably request. The Company consents to the use of the Prospectus
or any amendment or supplement thereto by the Placement Agents, and the
Placement Agents agree to provide to each Investor, prior to the Closing, a copy
of the Prospectus and any amendments or supplements thereto.
(e) Delivery of Copies. The Company will furnish to the Placement Agents
and their counsel, without charge in New York City (i) one copy of the
Registration Statement, including financial statements and schedules, and all
exhibits thereto and (ii) so long as a prospectus relating to the Shares is
required to be delivered under the Act, as many copies of each Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto as the
Placement Agents may reasonably request.
(f) Compliance with Undertakings. The Company will comply with all the
undertakings contained in the Registration Statement.
(g) Blue Sky Compliance. Prior to the sale of the Shares to the Investors,
the Company will cooperate with the Placement Agents and their counsel in
connection with the registration or qualification of the Shares for offer and
sale under the state securities or Blue Sky laws of such jurisdictions as the
Placement Agents may reasonably request; provided, that in no event shall the
Company be obligated to qualify to do business in any jurisdiction where it is
not now so qualified or to take any action which would subject it to general
service of process in any jurisdiction where it is not now so subject.
(h) Use of Proceeds. The Company will apply the net proceeds from the
offering and sale of the Shares in the manner set forth in the Prospectus under
the caption "Use of Proceeds."
(i) NASDAQ NMS. The Company will use its best efforts to ensure that the
Shares are quoted on the NASDAQ NMS at the time of the Closing.
(j) Reports. For a period of three years from the Closing Date, the
Company will furnish to the Placement Agents, as soon as they are available,
copies of all reports or other communications (financial or other) furnished to
holders of the Shares, other than any such
11
reports or communications filed with the Commission pursuant to the Commission's
▇▇▇▇▇ system.
(k) Clear Market. For a period of 90 days after the date hereof, the
Company will not (1) offer, pledge, announce the intention to sell, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock;
or (2) enter into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether
any such transaction described in clause (1) or (2) above is to be settled by
delivery of Common Stock or such other securities, in cash or otherwise, without
the prior written consent of the Placement Agents, other than (i) the Shares to
be sold hereunder, (ii) securities issued pursuant to stock option plans,
deferred compensation plans, restricted stock plans and employee stock purchase
plans existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement; (iii) the
issuance by the Company of any shares of Common Stock as consideration for
mergers, acquisitions, other business combinations, or strategic alliances,
occurring after the date of this Agreement; (iv) options issued to new employees
of the Company pursuant to the provisions of NASD Marketplace Rule
4350(i)(1)(A)(iv); or (v) the offer, issuance or sale of any securities of the
Company in exchange for any "underwater" options of the Company.
5. Expenses. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay
all costs and expenses incident to the performance of the obligations of the
Company under this Agreement, including but not limited to costs and expenses of
or relating to (1) the preparation, printing and filing of the Registration
Statement (including each pre- and post-effective amendment thereto) and
exhibits thereto, each Preliminary Prospectus, the Prospectus and any amendment
or supplement to the Prospectus, (2) the preparation and delivery of
certificates representing the Shares, (3) furnishing (including costs of
shipping and mailing) such copies of the Registration Statement (including all
pre- and post-effective amendments thereto), the Prospectus and any Preliminary
Prospectus, and all amendments and supplements to the Prospectus, as may be
requested for use in connection with the direct placement of the Shares, (4) the
listing of the Common Stock on the Exchange, (5) the registration or
qualification of the Shares for offer and sale under the securities or Blue Sky
laws of such jurisdictions designated pursuant to Section 4(g), including the
reasonable fees, disbursements and other charges of counsel to the Placement
Agents in connection therewith and the preparation and printing of preliminary,
supplemental and final Blue Sky memoranda, (6) fees, disbursements and other
charges of counsel to the Company, (7) fees and disbursements of the Accountants
incurred in delivering the letter(s) described in 6(f) of this Agreement and (8)
the fees of the Escrow Agent. The Company shall reimburse the Placement Agents,
upon request, for the Placement Agents' reasonable expenses, up to an aggregate
of $25,000.
6. Conditions of the Obligations of the Placement Agents. The obligations
of the Placement Agents hereunder are subject to the following conditions:
12
(a) (i) No stop order suspending the effectiveness of the Registration
Statement or the qualification or registration of the Shares under the
securities or Blue Sky laws of any jurisdiction shall be in effect and no
proceedings for that purpose shall be pending or threatened by any securities or
other governmental authority (including, without limitation, the Commission),
(ii) any request for additional information on the part of the staff of any
securities or other governmental authority (including, without limitation, the
Commission) shall have been complied with to the satisfaction of the staff of
the Commission or such authorities and (iii) after the date hereof no amendment
or supplement to the Registration Statement or the Prospectus shall have been
filed unless a copy thereof was first submitted to the Placement Agents and the
Placement Agents did not reasonably object thereto in good faith.
(b) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) there shall not have been a
Material Adverse Change whether or not arising from transactions in the ordinary
course of business, in each case other than as set forth in or contemplated by
the Registration Statement or the Prospectus, and (ii) the Company shall not
have sustained any material loss or interference with its business or properties
from fire, explosion, flood or other casualty, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other
governmental action, order or decree, which is not set forth in the Registration
Statement or the Prospectus, if in the judgment of the Placement Agents any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares to Investors at the public offering price.
(c) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there shall have been no litigation
or other proceeding instituted against the Company or any of its officers or
directors in their capacities as such, before or by any federal, state or local
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, which litigation or proceeding is reasonably expected
by management to have a Material Adverse Effect.
(d) Each of the representations and warranties of the Company contained
herein shall be true and correct in all material respects at the Closing Date,
as if made on such date, and all covenants and agreements herein contained to be
performed on the part of the Company and all conditions herein contained to be
fulfilled or complied with by the Company at or prior to the Closing Date shall
have been duly performed, fulfilled or complied with in all material respects.
(e) The Placement Agents shall have received an opinion, dated the Closing
Date, of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., outside counsel to
the Company, in form and substance reasonably satisfactory to the Placement
Agents, with respect to the matters set forth in Exhibit C hereto.
(f) At the Closing Date, the Accountants shall have furnished to the
Placement Agents a letter, dated October 3, 2003, addressed to the Placement
Agents and in form and substance reasonably satisfactory to the Placement
Agents, containing statements and information of the type customarily included
in accountants' "comfort letters" to underwriters.
(g) At the Closing Date, there shall be furnished to the Placement Agents
a certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the
13
Chief Financial Officer of the Company, each in his capacity as such, in form
and substance reasonably satisfactory to the Placement Agents to the effect that
each signer has carefully examined the Registration Statement and the Prospectus
and that to each of such person's knowledge:
(i) (A) As of the date of such certificate, (x) the Registration
Statement does not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading and (y) the Prospectus
does not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which
they were made, not misleading and (B) no event has occurred as a result
of which it is necessary to amend or supplement the Prospectus in order to
make the statements therein not untrue or misleading in any material
respect.
(ii) Each of the representations and warranties of the Company
contained in this Agreement are true and correct in all material respects
as if such representations and warranties were made on the Closing Date.
(iii) Each of the covenants and agreements required in this
Agreement to be performed by the Company on or prior to the Closing Date
and each condition required herein to be fulfilled or complied with by the
Company on or prior to the Closing Date has been duly performed, fulfilled
or complied with in all material respects.
(iv) No stop order suspending the effectiveness of the Registration
Statement or of any part thereof has been issued and no proceedings for
that purpose have been instituted or are contemplated by the Commission.
(v) Subsequent to the date of the most recent financial statements
in the Prospectus, there has been no material adverse change in the
financial position or results of operations of the Company, except as set
forth in or contemplated by the Prospectus.
(h) The Shares shall be qualified for sale in such states as the Placement
Agents may reasonably request and each such qualification shall be in effect and
not subject to any stop order or other proceeding on the Closing Date; provided
that in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to taxation or general service of process in any jurisdiction where
it is not now so subject.
(i) The Company shall have furnished or caused to be furnished to the
Placement Agents such certificates, in addition to those specifically mentioned
herein, as the Placement Agents may have reasonably requested as to the accuracy
and completeness, in all material respects, at the Closing Date of any statement
in the Registration Statement or the Prospectus, as to the accuracy, in all
material respects, at the Closing Date of the representations and warranties of
the Company, as to the performance by the Company of its obligations hereunder,
or as to the fulfillment of the conditions concurrent and precedent to the
obligations hereunder of the Placement Agents.
14
(j) The Placement Agents shall have received executed "lock-up"
agreements, each substantially in the form of Exhibit B hereto, from the
executive officers and directors of the Company relating to sales and certain
other dispositions of shares of Common Stock or certain other securities, and
such lock-up agreements shall be full force and effect on the Closing Date.
7. Indemnification and Contribution.
(a) Indemnification of the Placement Agents. The Company agrees to
indemnify and hold harmless each Placement Agent, their affiliates, directors,
officers, employees, agents and each person, if any, who controls such Placement
Agent within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities, joint
or several (including, without limitation, reasonable fees of outside legal
counsel and other expenses reasonably incurred in connection with any suit,
action or proceeding or any claim asserted, as such fees and expenses are
incurred) that arise out of, or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (or any amendment or supplement thereto) or any Preliminary
Prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with any information furnished to the Company in writing by any Placement Agent
expressly for use therein, it being understood and agreed that the only such
information furnished by any Placement Agent consists of the information
described as such in subsection (b) below; provided, that with respect to any
such untrue statement in or omission from any Preliminary Prospectus, the
indemnity agreement contained in this paragraph (a) shall not inure to the
benefit of any Placement Agent to the extent that the sale to the person
asserting any such loss, claim, damage or liability was an initial sale by such
Placement Agent and any such loss, claim, damage or liability of or with respect
to such Placement Agent results from the fact that both (i) to the extent
required by applicable law, a copy of the Prospectus was not sent or given to
such person at or prior to the written confirmation of the sale of such Shares
to such person and (ii) the untrue statement in or omission from such
Preliminary Prospectus was corrected in the Prospectus unless, in either case,
such failure to deliver the Prospectus was a result of non-compliance by the
Company with the provisions of Section 4 hereof.
(b) Indemnification of the Company. Each Placement Agent agrees to
indemnify and hold harmless the Company, its affiliates, directors and officers
who signed the Registration Statement and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act to the same extent as the indemnity set forth in paragraph (a)
above, but only with respect to any losses, claims, damages or liabilities that
arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with any
information furnished to the Company in writing by such Placement Agent
expressly for use in the Registration Statement or the Prospectus (or any
amendment or supplement thereto) or any Preliminary Prospectus, it being
understood and agreed upon that the only such information furnished by the
Placement Agents consists of the following: the statements set forth (i) under
the heading "Plan of Distribution,"
15
(ii) on the cover page and (iii) on the back cover in any Preliminary Prospectus
and the Prospectus.
(c) Notice and Procedures. If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought,
threatened or asserted against any person in respect of which indemnification
may be sought pursuant to either paragraph (a) or (b) above, such person (the
"Indemnified Person") shall promptly notify the person against whom such
indemnification may be sought (the "Indemnifying Person") in writing; provided
that the failure to notify the Indemnifying Person shall not relieve it from any
liability that it may have under this Section 7 except to the extent that it has
been prejudiced thereby; and provided, further, that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have to
an Indemnified Person otherwise than under this Section 7. If any such
proceeding shall be brought, threatened or asserted against an Indemnified
Person and it shall have notified the Indemnifying Person thereof, the
Indemnifying Person shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others entitled
to indemnification pursuant to this Section 7 that the Indemnifying Person may
designate in such proceeding and shall pay the fees and expenses of such counsel
related to such proceeding, as incurred. In any such proceeding, any Indemnified
Person shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary; (ii) the Indemnifying Person has failed within a reasonable time
to retain counsel reasonably satisfactory to the Indemnified Person; (iii) the
Indemnified Person shall have reasonably concluded that there may be legal
defenses available to it that are different from or in addition to those
available to the Indemnifying Person; or (iv) the named parties in any such
proceeding (including any impleaded parties) include both the Indemnifying
Person and the Indemnified Person and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them. It is understood and agreed that the Indemnifying Person shall
not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such fees and expenses shall be paid or reimbursed as they are incurred. Any
such separate firm for each Placement Agent, their affiliates, directors,
officers, employees and agents and any control persons of such Placement Agent
shall be designated in writing by ▇▇▇▇▇▇ Brothers Inc. or ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
Inc., respectively, and any such separate firm for the Company, its directors,
its officers who signed the Registration Statement and any control persons of
the Company shall be designated in writing by the Company. The Indemnifying
Person shall not be liable for any settlement of any proceeding with respect to
which indemnification is available hereunder effected without its written
consent, but if any such proceeding is settled with such consent or if there be
a final judgment in any such proceeding for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and
expenses of counsel in connection with any such proceeding as contemplated by
this paragraph, the Indemnifying Person shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by the Indemnifying Person of such
request and (ii) the Indemnifying Person shall not have reimbursed the
Indemnified Person in accordance with such request prior to the date of
16
such settlement. No Indemnifying Person shall, without the written consent of
the Indemnified Person (which consent shall not be unreasonably withheld,
conditioned or delayed), effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Person is or could have been a
party and indemnification could have been sought hereunder by such Indemnified
Person, unless such settlement (x) includes an unconditional release of such
Indemnified Person, in form and substance reasonably satisfactory to such
Indemnified Person, from all liability on claims that are the subject matter of
such proceeding and (y) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.
(d) Contribution. If the indemnification provided for in paragraphs (a)
and (b) above is unavailable to an Indemnified Person or insufficient in respect
of any losses, claims, damages or liabilities referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Placement Agents on the
other from the offering of the Shares or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
but also the relative fault of the Company on the one hand and the Placement
Agents on the other in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company on the
one hand and the Placement Agents on the other shall be deemed to be in the same
respective proportions as the net proceeds (before deducting expenses) received
by the Company from the sale of the Shares and the total fee received by the
Placement Agents in connection therewith, in each case as set forth in the table
on the cover of the Prospectus, bear to the aggregate offering price of the
Shares. The relative fault of the Company on the one hand and the Placement
Agents on the other shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Placement Agents and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) Limitation on Liability. The Company and the Placement Agents agree
that it would not be just and equitable if contribution pursuant to this Section
7 were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in
paragraph (d) above. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in paragraph
(d) above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Person in
connection with any such action or claim. Notwithstanding the provisions of this
Section 7, in no event shall any Placement Agent be required to contribute any
amount in excess of the fee received by it with respect to the offering of the
Shares exceeds the amount of any damages that such Placement Agent has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. The obligations of each Placement Agent hereunder
are several and not joint with the obligations of the other Placement Agent
hereunder, and no Placement Agent shall be responsible in any way for the
performance of the obligations of the other Placement Agent
17
hereunder. Nothing contained herein or in any other agreement or document
delivered at any closing, and no action taken by any Placement Agent pursuant
hereto or thereto, shall be deemed to constitute the Placement Agents as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Placement Agents are in any way acting in concert
with respect to such obligations or the transactions contemplated by this
Agreement. Each Placement Agent shall be entitled to protect and enforce its
rights arising out of this Agreement, and it shall not be necessary for the
other Placement Agent to be joined as an additional party in any proceeding for
such purpose. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Placement
Agents' obligations in subsection (d) to contribute are several in proportion to
the respective agency fee received by each of them and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 7
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any Indemnified Person at law or in equity.
8. Termination.
(a) The obligations of the Placement Agents under this Agreement may be
terminated, in the absolute discretion of the Placement Agents, at any time
prior to the Closing Date, by notice to the Company from the Placement Agents,
without liability on the part of the Placement Agents to the Company if, prior
to delivery and payment for the Shares, (i) trading generally shall have been
suspended or materially limited on or by any of the New York Stock Exchange, the
American Stock Exchange, the National Association of Securities Dealers, Inc.,
the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade; (ii) trading of any securities issued or guaranteed by
the Company shall have been suspended on any exchange or in any over-the-counter
market; (iii) a general moratorium on commercial banking activities shall have
been declared by federal or New York State authorities; or (iv) there shall have
occurred any outbreak or escalation of hostilities within or outside the United
States, that, in the judgment of the Placement Agents, is material and adverse
and makes it impracticable or inadvisable to proceed with the offering, sale or
delivery of the Shares on the Closing Date on the terms and in the manner
contemplated by this Agreement and Prospectus.
(b) The obligations of the parties under this Agreement shall be
automatically terminated in the event that notice is given by the Escrow Agent
that the Requisite Funds have not been deposited by the Investors into the
Escrow Account by the close of business on the Closing Date.
(c) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to Section 8(b) and other than a
termination of the Placement Agents' engagement pursuant to Section 8(a)), or if
the sale of the Shares provided for herein is not consummated because any
condition to the obligations of the Placement Agents set forth herein is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof, the
Company will, subject to demand by the Placement Agents, reimburse you for all
reasonable out-of-pocket expenses incurred in connection herewith up to an
aggregate of $25,000.
18
9. Notices. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq. (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇), or (b) if to the
Placement Agents, at the office of ▇▇▇▇▇▇ Brothers Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇) and at
the office of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇ (facsimile: (▇▇▇) ▇▇▇-▇▇▇▇). Any such
notice shall be effective only upon receipt. Any notice under Section 7 may be
made by facsimile or telephone, but if so made shall be subsequently confirmed
in writing.
10. Survival. The respective representations, warranties, agreements,
covenants, indemnities and other statements of the Company and the Placement
Agents set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement shall remain in full force and effect,
regardless of (i) any investigation made by or on behalf of the Company, any of
its officers or directors, the Placement Agents or any controlling person
referred to in Section 7 hereof and (ii) delivery of and payment for the Shares.
The respective agreements, covenants, indemnities and other statements set forth
in Sections 5, 7 and 8 hereof shall remain in full force and effect, regardless
of any termination or cancellation of this Agreement.
11. Successors. This Agreement shall inure to the benefit of and shall be
binding upon the Placement Agents, the Company and their respective successors
and legal representatives, and nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other person any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person except that (i) the
indemnification and contribution contained in Sections 7(a) and (d) of this
Agreement shall also be for the benefit of the directors, officers, employees
and agents of the Placement Agents and any person or persons who control the
Placement Agents within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and (ii) the indemnification and contribution contained in
Sections 7(b) and (d) of this Agreement shall also be for the benefit of the
directors of the Company, the officers of the Company who have signed the
Registration Statement and any person or persons who control the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No
purchaser of Shares shall be deemed to be a successor Investor by reason merely
of such purchase.
12. APPLICABLE LAW. THE VALIDITY AND INTERPRETATIONS OF THIS AGREEMENT,
AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAWS PROVISIONS THEREOF.
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13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14. Entire Agreement. This Agreement constitutes the entire understanding
between the parties hereto as to the matters covered hereby and supersedes all
prior understandings, written or oral, relating to such subject matter
(including without limitation that certain engagement letter between the
Placement Agents and the Company dated October 2, 2003).
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Please confirm that the foregoing correctly sets forth the agreement
between the Company and the Placement Agents.
Very truly yours,
ARIAD PHARMACEUTICALS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:Chairman and CEO
Confirmed as of the date first above mentioned:
▇▇▇▇▇▇ BROTHERS INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
