PRAECIS PHARMACEUTICALS INCORPORATED
6,250,000 Shares(1)
Common Stock
($.01 par value)
Underwriting Agreement
New York, New York
February __2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Credit Suisse First Boston Corporation
CIBC World Markets Corp.
As Representatives of the several Underwriters,
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
PRAECIS PHARMACEUTICALS INCORPORATED, a corporation organized under the
laws of the State of Delaware (the "COMPANY"), proposes to sell to the several
underwriters named in Schedule I hereto (the "UNDERWRITERS"), for whom you (the
"REPRESENTATIVES") are acting as representatives, 5,500,000 shares of Common
Stock, $.01 par value ("COMMON STOCK") of the Company, and the entity named in
Schedule II hereto (the "Selling Stockholder") proposes to sell to the several
Underwriters 750,000 shares of Common Stock (said shares to be issued and sold
by the Company and shares to be sold by the Selling Stockholder collectively
being hereinafter called the "UNDERWRITTEN SECURITIES"). The Company also
proposes to grant to the Underwriters an option to purchase up to 937,500
additional shares of Common Stock to cover over-allotments (the "OPTION
SECURITIES"; the Option Securities, together with the Underwritten Securities,
being hereinafter called the "SECURITIES"). To the extent there are no
additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Certain terms used herein are defined in Section 17 hereof.
1. REPRESENTATIONS AND WARRANTIES.
(i) The Company represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1.
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(1) Plus an option to purchase from the Company, up to 937,500 additional
Securities to cover over-allotments.
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-54342) on Form S-1, including a related
preliminary prospectus, for registration under the Act of the offering and sale
of the Securities. The Company has filed one or more amendments thereto,
including a related preliminary prospectus where appropriate, each of which has
previously been furnished to you. The Company will next file with the Commission
either (1) prior to the Effective Date of such registration statement, a further
amendment to such registration statement (including the form of final
prospectus) or (2) after the Effective Date of such registration statement, a
final prospectus in accordance with Rules 430A and 424(b). In the case of clause
(2), the Company has included in such registration statement, as amended at the
Effective Date, all information (other than Rule 430A Information) required by
the Act and the rules thereunder to be included in such registration statement
and the Prospectus. As filed, such amendment and form of final prospectus, or
such final prospectus, shall contain all Rule 430A Information, together with
all other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution Time
or, to the extent not completed at the Execution Time, shall contain only such
specific additional information and other changes (beyond that contained in the
latest Preliminary Prospectus) as the Company has advised you, prior to the
Execution Time, will be included or made therein.
(b) On the Effective Date, the Registration Statement did or
will, and when the Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date (as defined herein) and on any date on which
Option Securities are purchased, if such date is not the Closing Date (a
"SETTLEMENT DATE"), the Prospectus (and any supplements thereto) will, comply in
all material respects with the applicable requirements of the Act and the rules
thereunder. On the Effective Date and at the Execution Time, the Registration
Statement did not or will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading. On the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), will not, and on the date of
any filing pursuant to Rule 424(b) and on the Closing Date and any settlement
date, the Prospectus (together with any supplement thereto) will not, 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. Notwithstanding
anything in this Agreement to the contrary, the Company makes no representations
or warranties as to the information contained in or omitted from the
Registration Statement, or the Prospectus (or any supplement thereto) in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the Prospectus (or
any supplement thereto).
(c) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the jurisdiction in
which it is chartered or organized with full corporate power and authority to
own or lease, as the case may be, and to operate its properties and conduct its
business as described in the Prospectus. The subsidiary of the Company
identified in Exhibit 21 to Item 16(a) of the Registration Statement (the
"Subsidiary") has been duly organized and is validly existing as a limited
liability company in
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good standing under the laws of the jurisdiction of its organization, with full
power and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus. Each of the
Company and the Subsidiary is duly qualified to do business in and is in good
standing under the laws of each jurisdiction which requires such qualification,
except where the failure to be so qualified would not, individually or in the
aggregate, have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and the
Subsidiary taken as a whole, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(d) The Subsidiary is and as of the Closing Date will be the
only subsidiary of the Company.
(e) The Company's authorized equity capitalization is as set
forth in the Prospectus; the capital stock of the Company conforms in all
material respects to the description thereof contained in the Prospectus; the
outstanding shares of Common Stock have been duly and validly authorized and
issued and are fully paid and nonassessable; the Securities to be purchased by
the Underwriters from the Company have been duly and validly authorized, and,
when issued and delivered to and paid for by the Underwriters pursuant to this
Agreement, will be fully paid and nonassessable; the Securities to be purchased
by the Underwriters from the Selling Stockholder, when issued, were validly
issued, fully paid and nonassessable; the Securities are duly listed, and
admitted and authorized for trading, subject to official notice of issuance and
evidence of satisfactory distribution, on the Nasdaq National Market; the
certificates for the Securities are in valid and sufficient form in accordance
with applicable laws; the holders of outstanding shares of capital stock of the
Company are not entitled to preemptive or other rights to subscribe for the
Securities; and, except as set forth in the Prospectus, no options, warrants or
other rights to purchase, agreements or other obligations to issue, or rights to
convert any obligations into or exchange any securities for, shares of capital
stock of or ownership interests in the Company are outstanding.
(f) There is no franchise, contract or other document of a
character required to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit thereto, which is not described or filed as
required.
(g) This Agreement has been duly authorized, executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company enforceable in accordance with its terms.
(h) The Company is not and, after giving effect to the offering
and sale of the Securities and the application of the proceeds thereof as
described in the Prospectus, will not be an "investment company" as defined in
the Investment Company Act of 1940, as amended.
(i) No consent, approval, authorization, filing with or order
of any court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained under the
Act and the Exchange Act, and such as may be required (i) under the state
securities or blue sky laws of any jurisdiction in
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connection with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated herein and in the Prospectus, or (ii) in
connection with the listing of the Securities on the Nasdaq National Market.
(j) Neither the issuance and sale of the Securities nor the
consummation by the Company, of any other transactions herein contemplated nor
the fulfillment by the Company of the terms hereof will 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 the Subsidiary pursuant to (i) the
certificate of incorporation or by-laws of the Company, (ii) the certificate of
formation or operating agreement of the Subsidiary, (iii) 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 the Subsidiary is a party or bound or to which its
property, as applicable, is subject, or (iv) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company or the Subsidiary of any
court, regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or the Subsidiary or any of
its properties, except, with respect to clauses (iii) and (iv) above, for such
conflicts, breaches, violations and impositions which would not, individually or
in the aggregate, have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and the
Subsidiary taken as a whole.
(k) Except as described in the Prospectus, no holders of
securities of the Company have rights to the registration of such securities
under the Registration Statement.
(l) The historical financial statements and schedules of the
Company and the Subsidiary included in the Prospectus and the Registration
Statement present fairly in all material respects the financial condition,
results of operations and cash flows of the Company and the Subsidiary as of the
dates and for the periods indicated, comply as to form with the applicable
accounting requirements of the Act and have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as otherwise noted therein). The
selected financial data set forth under the caption "SELECTED FINANCIAL DATA" in
the Prospectus and Registration Statement fairly present, on the basis stated in
the Prospectus and the Registration Statement, the information included therein.
(m) Except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), no action, suit or proceeding by or
before any court or governmental agency, authority or body or any arbitrator
involving the Company or the Subsidiary or either entity's property is pending
or, to the best knowledge of the Company and the Subsidiary, threatened that (i)
could reasonably be expected to have a material adverse effect on the
performance by the Company of this Agreement or the consummation by the Company
of any of the transactions contemplated hereby or (ii) could reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and the
Subsidiary taken as a whole.
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(n) Except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), each of the Company and the Subsidiary
owns or leases all such properties as are necessary to the conduct of its
operations as presently conducted.
(o) Neither the Company nor the Subsidiary is in violation or
default of (i) any provision of its certificate of incorporation, by-laws,
certificate of formation or operating agreement, as applicable, (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 bound or to which its property is subject, or (iii) any
statute, law, rule, regulation, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body, arbitrator or other
authority having jurisdiction over the Company, the Subsidiary, or any of such
entities' respective properties, as applicable, except, in the case of clauses
(ii) and (iii) above, for such violations or defaults which would not,
individually or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties
of the Company and the Subsidiary taken as a whole.
(p) Ernst & Young LLP, who have certified certain financial
statements of the Company and delivered their report with respect to the audited
financial statements and schedules included in the Prospectus, are independent
public accountants with respect to the Company within the meaning of the Act and
the applicable published rules and regulations of the Commission thereunder.
(q) There are no 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 or the issuance or sale by the Company of the Securities.
(r) Each of the Company and the Subsidiary has filed all
foreign, federal, state and local tax returns that are required to be filed or
has requested extensions thereof, except in any case in which the failure so to
file would not have a material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company and the
Subsidiary taken as a whole, and each of the Company and the Subsidiary has paid
all taxes required to be paid by it and any other assessment, fine or penalty
levied against it, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties
of the Company and the Subsidiary taken as a whole.
(s) No labor problem or dispute with the employees of the
Company exists or, to the best knowledge of the Company, is threatened or
imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its principal suppliers, contractors or
customers, that would have a material adverse effect on the condition (financial
or otherwise), prospects, earnings, business or properties of the Company,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
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(t) Each of the Company and the Subsidiary is insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses (and at the
stage of such business) in which they are engaged. All policies of insurance and
fidelity or surety bonds insuring the Company and the Subsidiary or any of its
businesses, assets, employees, officers and directors are in full force and
effect. Each of the Company and the Subsidiary is in compliance with the terms
of such policies and instruments in all material respects. There are no claims
by either the Company or the Subsidiary under any such policy or instrument as
to which any insurance company is denying liability or defending under a
reservation of rights clause. Neither the Company nor the Subsidiary has been
refused any insurance coverage sought or applied for; and each of the Company
and the Subsidiary has no reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not have a material adverse effect on the
condition (financial or otherwise), prospects, earnings, business or properties
of the Company and the Subsidiary taken as a whole, except as set forth in or
contemplated in the Prospectus (exclusive of any supplement thereto).
(u) Except as set forth in or contemplated in the Prospectus
(exclusive of any supplement thereto), each of the Company and the Subsidiary
possess all licenses, certificates, permits and other authorizations issued by
the appropriate federal, state or foreign regulatory authorities necessary to
conduct its business. Each of the Company and the Subsidiary has not received
any notice of proceedings relating to the revocation or modification of any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a material
adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company and the Subsidiary taken as a whole.
(v) The Company maintains a system 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 as
applied in the United States 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.
(w) The Company has not taken, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(x) Each of the Company and the Subsidiary is (i) in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) has received and is in
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compliance with all permits, licenses or other approvals required of it under
applicable Environmental Laws to conduct business, and (iii) has 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 where such non-compliance with Environmental
Laws, failure to receive required permits, licenses or other approvals, or
liability would not, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), prospects, earnings, business
or properties of the Company and the Subsidiary taken as a whole, except as set
forth in or contemplated in the Prospectus (exclusive of any supplement
thereto). Neither the Company nor the Subsidiary has been named as a
"potentially responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(y) The Company has fulfilled its obligations, if any, under
the minimum funding standards of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee
Retirement Income Security Act of 1974 ("ERISA") and the regulations and
published interpretations thereunder with respect to each "plan" (as defined in
Section 3(3) of ERISA and such regulations and published interpretations) in
which employees of the Company are eligible to participate and each such plan is
in compliance in all material respects with the presently applicable provisions
of ERISA and such regulations and published interpretations. The Company has not
incurred any unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA.
(z) The Company owns, possesses, licenses or has other rights
to use, all patents, patent rights, inventions, know-how, technology, trade
secrets (including other unpatentable proprietary or confidential information,
systems or procedures), copyrights, trademarks, service marks, trade names,
trade dress, logos, and all applications for any of the foregoing necessary for
the conduct of the Company's business in all material respects as now conducted
as described in the Prospectus (collectively, the "INTELLECTUAL PROPERTY").
Except as set forth in the Prospectus, (a) there are no third parties, other
than parties to agreements whereby the Company licenses Intellectual Property,
that have rights to any such Intellectual Property; (b) there is no material
infringement by third parties of any such Intellectual Property; (c) there is no
pending or, to the Company's knowledge, threatened action, suit, proceeding or
claim by others challenging the Company's rights in or to any such Intellectual
Property, and the Company is unaware of any facts which would form a reasonable
basis for any such claim; (d) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others challenging
the validity or scope of any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any such claim; (e)
there is no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others that the Company infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary rights of
others, and the Company is unaware of any other fact which would form a
reasonable basis for any such claim; (f) there is no U.S. patent or published
U.S. patent application which contains claims that dominate or may dominate any
Intellectual Property described in the Prospectus as being owned by or licensed
to the Company or that interferes with the issued or pending claims of any such
Intellectual Property; and (g) there is no prior art of which the Company is
aware that may render any U.S. patent held by the Company invalid or
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any U.S. patent application held by the Company unpatentable which has not been
disclosed to the U.S. Patent and Trademark Office; except, in each case, other
than such rights, infringements, actions, suits proceedings or claims that,
individually and in the aggregate, would not have a material adverse effect on
the condition (financial or otherwise), prospects, earnings, business or
properties of the Company.
(aa) The statements contained in (A) the "PROSPECTUS SUMMARY"
section of the Prospectus under the caption "OUR CORPORATE COLLABORATORS," (B)
the "RISK FACTORS" section of the Prospectus under the captions "IF OUR CLINICAL
TRIALS ARE NOT SUCCESSFUL, OR IF WE ARE OTHERWISE UNABLE TO OBTAIN AND MAINTAIN
THE REGULATORY APPROVAL REQUIRED TO MARKET AND SELL OUR PRODUCTS, WE WOULD INCUR
INCREASING OPERATING LOSSES," "IF OUR CORPORATE COLLABORATORS REDUCE, DELAY OR
TERMINATE THEIR FINANCIAL SUPPORT, WE MAY BE UNABLE TO SUCCESSFULLY DEVELOP,
MARKET, DISTRIBUTE OR SELL OUR PRODUCTS," "IF WE ARE UNABLE TO OBTAIN AND
ENFORCE VALID PATENTS, WE COULD LOSE ANY COMPETITIVE ADVANTAGE WE MAY HAVE," and
"ANTI-TAKEOVER PROVISIONS IN OUR CHARTER AND BY-LAWS, OUR RIGHTS AGREEMENT AND
UNDER DELAWARE LAW MAY MAKE AN ACQUISITION OF US MORE DIFFICULT, EVEN IF AN
ACQUISITION WOULD BE BENEFICIAL TO OUR STOCKHOLDERS," (C) the "BUSINESS" section
of the Prospectus under the captions "CORPORATE COLLABORATIONS," "TECHNOLOGY
LICENSES," "MANUFACTURING," "PATENTS AND PROPRIETARY RIGHTS," and "GOVERNMENT
REGULATION," (D) the "MANAGEMENT" section of the Prospectus under the caption
"INCENTIVE PLANS," and (E) the "DESCRIPTION OF CAPITAL STOCK" and "SHARES
ELIGIBLE FOR FUTURE SALE" sections of the Prospectus, insofar as such statements
summarize legal or regulatory matters, agreements, documents, or proceedings
discussed therein, are accurate and fair summaries of such legal or regulatory
matters, agreements, documents or proceedings.
(bb) The Company (i) does not have any material lending or
other relationship (other than the Company's existing investments account with
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.) with any bank or lending institution, which to the
best knowledge of the Company, is an affiliate of ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Holdings
Inc. and (ii) does not intend to use any of the proceeds from the sale of the
Securities hereunder to repay any outstanding debt owed to any person or entity,
which to the best knowledge of the Company, is an affiliate of ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Holdings Inc.
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed to be a representation and warranty by the
Company, as to matters covered thereby, to each Underwriter.
(ii) The Selling Stockholder represents and warrants to, and agrees
with, each Underwriter that:
(a) The Selling Stockholder is the record and beneficial owner
of the Securities to be sold by it hereunder, free and clear of all liens,
encumbrances, equities and claims, and has duly endorsed such Securities, or a
stock power accompanying such Securities, in blank, and, assuming that (1) the
Underwriters purchase such Securities from the Selling
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Stockholder without notice of any adverse claim (within the meaning of
Section 8-105 of the New York Uniform Commercial Code ("UCC")), (2) the
Underwriters make payment therefor as provided herein, (3) such Securities
are delivered to the Representatives in accordance with the provisions of the
Custody Agreement (as defined below), and (4) the Underwriters obtain control
of the Securities (within the meaning of Section 8-106 of the UCC), the
Underwriters will acquire all of the Selling Stockholder's rights and
interest in such Securities free of any adverse claim (within the meaning of
Section 8-105 of the UCC).
(b) The Selling Stockholder has not taken, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(c) Certificates in negotiable form for the Selling
Stockholder's Securities have been placed in custody, for delivery pursuant to
the terms of this Agreement, under an Irrevocable Power of Attorney and Custody
Agreement for Sale of Shares of Common Stock, Par Value $.01 per Share of
PRAECIS PHARMACEUTICALS INCORPORATED, which has been duly authorized, executed
and delivered by the Selling Stockholder, in the form heretofore furnished to
you (the "Custody Agreement") with American Stock Transfer & Trust Company, as
Custodian (the "Custodian"); the Securities represented by the certificates so
held in custody for the Selling Stockholder are subject to the interests
hereunder of the Underwriters; the arrangements for custody and delivery of such
certificates, made by the Selling Stockholder hereunder and under the Custody
Agreement, are not subject to termination by any acts of the Selling
Stockholder, or by operation of law or the occurrence of any other event; and if
any act or any other such event shall occur before the delivery of such
Securities hereunder, certificates for such Securities will be delivered by the
Custodian in accordance with the terms and conditions of this Agreement and the
Custody Agreement as if such act or other event had not occurred, regardless of
whether or not the Custodian shall have received notice of such act or other
event.
(d) No consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation by the Selling
Stockholder of the transactions contemplated herein, except such as may have
been obtained under the Act and such as may be required under the blue sky laws
of any jurisdiction in connection with the purchase and distribution of the
Securities by the Underwriters and such other approvals as have been obtained.
(e) Neither the sale of the Securities being sold by the
Selling Stockholder hereunder nor the consummation of any other of the
transactions herein contemplated by the Selling Stockholder or the fulfillment
of the terms hereof by the Selling Stockholder will conflict with, result in a
breach or violation of, or constitute a default under any law or the certificate
of formation or operating agreement of the Selling Stockholder or the terms of
any indenture or other material agreement or instrument to which the Selling
Stockholder is a party or bound, or any judgment, order or decree applicable to
the Selling Stockholder of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Selling
Stockholder.
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(f) Solely in respect of any statements in or omissions from
the Registration Statement or the Prospectus or any supplements thereto made in
reliance upon and in conformity with information furnished in writing to the
Company by the Selling Stockholder specifically for use in connection with the
preparation thereof (the "Selling Stockholder Information"), the Selling
Stockholder hereby makes the same representations and warranties concerning the
Selling Stockholder Information to each Underwriter as the Company makes to each
Underwriter under paragraph (i)(b) of this Section 1.
Any certificate signed by any officer of the Selling Stockholder and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by the Selling Stockholder, as to matters covered thereby, to each
Underwriter.
2. PURCHASE AND SALE.
(a) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company and the Selling
Stockholder agree, severally and not jointly, to sell to each Underwriter, and
each Underwriter agrees, severally and not jointly, to purchase from the Company
and the Selling Stockholder, at a purchase price of $_____ per share, the amount
of the Underwritten Securities set forth opposite such Underwriter's name in
Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase from the Company, severally
and not jointly, up to 937,500 Option Securities at the same purchase price per
share as the Underwriters shall pay for the Underwritten Securities. Said option
may be exercised only to cover over-allotments in the sale of the Underwritten
Securities by the Underwriters. Said option may be exercised in whole or in part
at any time (but not more than once) on or before the 30th day after the date of
the Prospectus upon written or telegraphic notice by the Representatives to the
Company setting forth the number of shares of the Option Securities as to which
the several Underwriters are exercising the option and the settlement date. The
maximum number of Option Securities to be sold by the Company is 937,500. The
number of Option Securities to be purchased by each Underwriter shall be the
same percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Underwritten Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Underwritten
Securities and the Option Securities (if the option provided for in Section 2(b)
hereof shall have been exercised on or before the third Business Day prior to
the Closing Date) shall be made at 10:00 AM, New York City time, on February __,
2001, or at such time on such later date not more than three Business Days after
the foregoing date as the Representatives shall designate, which date and time
may be postponed by agreement between the Representatives, the Company and the
Selling Stockholder or as provided in Section 9 hereof (such date and time of
delivery
10
and payment for the Securities being herein called the "Closing Date"). Delivery
of the Securities shall be made to the Representatives for the respective
accounts of the several Underwriters against payment by the several Underwriters
through the Representatives of the respective aggregate purchase prices of the
Securities being sold by the Company and the Selling Stockholder to or upon the
order of the Company and the Selling Stockholder, as applicable, by wire
transfer payable in same-day funds to the respective accounts specified by the
Company and the Selling Stockholder. Delivery of the Underwritten Securities and
the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct.
The Selling Stockholder will pay all applicable state transfer taxes, if
any, involved in the transfer to the several Underwriters of the Securities to
be purchased by them from the Selling Stockholder and the respective
Underwriters will pay any additional stock transfer taxes involved in further
transfers.
If the option provided for in Section 2(b) hereof is exercised after the
third Business Day prior to the Closing Date, the Company will deliver the
Option Securities (at the expense of the Company) to the Representatives, at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ the date specified by the
Representatives (which shall be within three Business Days after exercise of
said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to an account specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. AGREEMENTS.
(i) The Company agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective as soon as practicable following the
Execution Time and not later than the time set forth in Section 6(a) below.
Prior to the termination of the offering of the Securities, the Company will not
file any amendment of the Registration Statement or supplement to the Prospectus
or any Rule 462(b) Registration Statement unless the Company has furnished you a
copy for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the foregoing
sentence, if the Registration Statement has become or becomes effective pursuant
to Rule 430A, or filing of the Prospectus is otherwise required under Rule
424(b), the Company will cause the Prospectus, properly completed, and any
supplement thereto to be filed with the Commission pursuant to the applicable
paragraph of
11
Rule 424(b) within the time period prescribed and will provide evidence
reasonably satisfactory to the Representatives of such timely filing. The
Company will promptly advise the Representatives (1) when the Registration
Statement, if not effective at the Execution Time, shall have become effective,
(2) when the Prospectus, and any supplement thereto, shall have been filed (if
required) with the Commission pursuant to Rule 424(b) or when any Rule 462(b)
Registration Statement shall have been filed with the Commission, (3) when,
prior to termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (4) of any
request by the Commission or its staff for any amendment of the Registration
Statement, or any Rule 462(b) Registration Statement, or for any supplement to
the Prospectus or for any additional information, (5) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that purpose
and (6) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction
or the institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such stop order
or the suspension of any such qualification and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein in the light of the circumstances under which they
were made not misleading, or if it shall be necessary to amend the Registration
Statement or supplement the Prospectus to comply with the Act or the rules
thereunder, the Company shall promptly (1) notify the Representatives of any
such event, (2) prepare and file with the Commission, subject to the second
sentence of paragraph (i)(a) of this Section 5, an amendment or supplement which
will correct such statement or omission or effect such compliance, and (3)
supply any supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and the Subsidiary which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel
for the Underwriters one signed copy of the Registration Statement (including
exhibits thereto) and to each other Underwriter a copy of the Registration
Statement (without exhibits thereto) and, so long as delivery of a prospectus by
an Underwriter or dealer may be required by the Act, as many copies of each
Preliminary Prospectus and the Prospectus and any supplement thereto as the
Representatives may reasonably request.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such jurisdictions as
the Representatives may designate and will maintain such qualifications in
effect so long as required for the distribution of the Securities; provided that
in no event shall the Company be obligated to qualify to do business, or
12
subject itself to taxation in respect thereof, in any jurisdiction where it is
not now so qualified or taxed, or to take any action that would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Securities, in any jurisdiction where it is not now so subject.
(f) Except as expressly contemplated hereby, the Company will
not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., offer,
sell, contract to sell, pledge, or otherwise dispose of, (or enter into any
transaction which is designed to, or might reasonably 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 any person in privity with the Company or any affiliate of the
Company) directly or indirectly, including the filing (or participation in the
filing) of a registration statement with the Commission in respect of, or
establish or increase a put equivalent position or liquidate or decrease a call
equivalent position within the meaning of Section 16 of the Exchange Act, any
other shares of Common Stock, or any securities convertible into, or exercisable
or exchangeable for, shares of Common Stock, or publicly announce an intention
to effect any such transaction, for a period of 90 days after the date of the
Underwriting Agreement; PROVIDED, HOWEVER, that the Company may (i) grant
options to purchase common stock and issue and sell Common Stock pursuant to any
employee stock option plan, stock ownership plan or dividend reinvestment plan
of the Company in effect at the Execution Time, and (ii) issue Common Stock
issuable upon the conversion of securities or the exercise of warrants
outstanding at the Execution Time.
(g) The Company will not take, directly or indirectly, any
action designed to or which has constituted or which might reasonably be
expected to cause or result in, under the Exchange Act or otherwise,
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(h) The Company agrees to pay the costs and expenses relating
to the following matters: (i) the preparation, printing or reproduction and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), each Preliminary Prospectus, the Prospectus,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, each
Preliminary Prospectus, the Prospectus, and all amendments or supplements to any
of them, as may, in each case, be reasonably requested for use in connection
with the offering and sale of the Securities; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Securities,
including any stamp or transfer taxes in connection with the original issuance
and sale of the Securities; (iv) the printing (or reproduction) and delivery of
this Agreement, any blue sky memorandum and all other agreements or documents
printed (or reproduced) and delivered in connection with the offering of the
Securities; (v) the registration of the Securities under the Exchange Act and
the listing of the Securities on the Nasdaq National Market; (vi) any
registration or qualification of the Securities for offer and sale under the
securities or blue sky laws of the several states (including filing fees and the
13
reasonable fees and expenses of counsel for the Underwriters relating to such
registration and qualification); (vii) any filings required to be made with the
National Association of Securities Dealers, Inc. (including filing fees and the
reasonable fees and expenses of one counsel for the Underwriters relating to
such filings); (viii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Securities; (ix) the fees and expenses of the
Company's accountants and the fees and expenses of counsel (including local and
special counsel) for the Company; (x) the costs and expenses incident to the
performance by the Selling Stockholder of its obligations hereunder (including
counsel fees and expenses), exclusive of underwriting discounts and commissions
and transfer taxes, up to a maximum amount of $20,000 for all such costs and
expenses, provided that such costs and expenses shall not be payable by the
Company and, in such case, shall be the responsibility of and shall be paid by
the Selling Stockholder, if the Securities to be sold by the Selling Stockholder
to the Underwriters hereunder are not sold (other than by reason of failure by
the Company or the Underwriters to perform their obligations hereunder or the
non-satisfaction of a condition contemplated herein to be satisfied by or on
behalf of the Company); and (xi) all other costs and expenses incident to the
performance by the Company of its obligations hereunder.
(ii) The Selling Stockholder agrees with the several Underwriters
that:
(a) Except as expressly contemplated hereby, the Selling
Stockholder will not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Inc., offer, sell, contract to sell, pledge or otherwise dispose of (or enter
into any transaction which is designed to, or might reasonably be expected to,
result in the disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Selling Stockholder),
directly or indirectly, or file (or participate in the filing of) a registration
statement with the Commission in respect of, or establish or increase a put
equivalent position or liquidate or decrease a call equivalent position within
the meaning of Section 16 of the Exchange Act with respect to, any shares of
Common Stock of the Company or any securities convertible into or exercisable or
exchangeable for shares of Common Stock, or publicly announce an intention to
effect any such transaction, for a period of 60 days after the date of this
Agreement, other than shares of Common Stock disposed of either (i) as bona fide
gifts or (ii) as a distribution to the Selling Stockholder's partners, members
or shareholders of such entities, provided that the donee(s) or such partners,
members or shareholders agree in writing prior to such disposition to be bound
by the restrictions set forth in this Section 5(ii).
(b) The Selling Stockholder will not take, directly or
indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(c) The Selling Stockholder will advise you promptly, and if
requested by you, will confirm such advice in writing, so long as delivery of a
prospectus relating to the Securities by an underwriter or dealer may be
required under the Act, of (i) any change in information in the Registration
Statement or the Prospectus relating to the Selling Stockholder Information or
(ii) any new material information relating to the Company or relating to any
matter stated in the Prospectus which comes to the attention of the Selling
Stockholder.
14
(d) The Selling Stockholder agrees to pay the costs and
expenses relating to the following matters: (i) underwriting discounts and
commissions and transfer taxes, if any, with respect to the Securities sold by
the Selling Stockholder to the Underwriters, and (ii) subject to the proviso of
clause (x) of Section 5(i)(h) hereof, all costs and expenses incident to the
performance by the Selling Stockholder of the performance of its obligations
hereunder in excess of the $20,000 maximum amount to be paid by the Company for
such costs and expenses pursuant to clause (x) of Section 5(i)(h) hereof.
(iii) Each of the Company and the Selling Stockholder agree with the
several Underwriters that said Underwriters are third party beneficiaries to
Custody Agreement.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase the Underwritten Securities and the Option
Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the Company and the Selling
Stockholder contained herein as of the Execution Time, the Closing Date and any
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company and the Selling Stockholder made in any certificates pursuant to
the provisions hereof, and to the performance by the Company and the Selling
Stockholder of their respective obligations hereunder (the Company and the
Selling Stockholder agreeing with one another to perform such respective
obligations and to use all reasonable efforts to satisfy all conditions to the
obligations of the Underwriters to purchase the Underwritten Securities
contemplated herein to be satisfied by the Company and the Selling Stockholder,
as applicable). The obligations of the Underwriters to purchase the Underwritten
Securities and the Option Securities, as the case may be, shall also be subject
to the following additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in writing to a
later time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time on the date of determination of the public offering
price, if such determination occurred at or prior to 3:00 PM New York City time
on such date or (ii) 9:30 AM on the Business Day following the day on which the
public offering price was determined, if such determination occurred after 3:00
PM New York City time on such date; if filing of the Prospectus, or any
supplement thereto, is required pursuant to Rule 424(b), the Prospectus, and any
such supplement, will be filed in the manner and within the time period required
by Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Company shall have requested and caused Skadden, Arps,
Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel for the Company, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed to the
Representatives, substantially in the form of EXHIBIT A attached hereto. In
rendering the opinion contained in EXHIBIT A, such counsel may rely as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials.
15
(c) The Company shall have requested and caused Lahive and
▇▇▇▇▇▇▇▇▇, LLP, special patent counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that the statements contained in (A) the "RISK
FACTORS" section of the Prospectus under the caption "IF WE ARE UNABLE TO OBTAIN
AND ENFORCE VALID PATENTS, WE COULD LOSE ANY COMPETITIVE ADVANTAGE WE MAY HAVE,"
and (B) the "BUSINESS" section of the Prospectus under the captions "TECHNOLOGY
LICENSES," "PATENTS AND PROPRIETARY RIGHTS," and "LEGAL PROCEEDINGS," in each
case, insofar as such statements constitute matters of law or legal conclusions
or summarize legal or regulatory matters or proceedings, have been reviewed by
them and are accurate and fair descriptions of such matters of law or legal
conclusions or summaries of such legal or regulatory matters or proceedings.
In rendering such opinion such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
Commonwealth of Massachusetts or the federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion of other
counsel of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Underwriters and (B) as to matters of fact, to
the extent they deem proper, on certificates of responsible officers of the
Company and public officials.
(d) The Company shall have requested and caused ▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, P.C., special regulatory counsel for the Company, to have furnished to
the Representatives their opinion, dated the Closing Date and addressed to the
Representatives, to the effect that the statements contained in (A) the "RISK
FACTORS" section of the Prospectus under the caption "IF OUR CLINICAL TRIALS ARE
NOT SUCCESSFUL, OR IF WE ARE OTHERWISE UNABLE TO OBTAIN AND MAINTAIN REGULATORY
APPROVAL REQUIRED TO MARKET AND SELL OUR PRODUCTS, WE WOULD INCUR INCREASING
OPERATING LOSSES" AND (B) the "BUSINESS" section of the Prospectus under the
caption "GOVERNMENT REGULATION," insofar as such statements constitute matters
of law or legal conclusions or summarize legal or regulatory matters or
proceedings, have been reviewed by them and are accurate and fair descriptions
of such matters of law or legal conclusions or summaries of such legal or
regulatory matters or proceedings.
(e) The Selling Stockholder shall have requested and caused
▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP, special counsel for the Selling Stockholder,
to have furnished to the Representatives their opinion dated the Closing Date
and addressed to the Representatives, substantially to the effect that:
(i) this Agreement has been duly authorized, executed and
delivered by the Selling Stockholder pursuant to such Selling Stockholder's
power of attorney and the Selling Stockholder has the requisite power and
authority to sell, transfer and deliver in the manner provided in this Agreement
the Securities being sold by the Selling Stockholder hereunder;
(ii) assuming that (1) the Underwriters purchase such
Securities from the Selling Stockholder without notice of any adverse claim
(within the meaning of Section 8-105 of the UCC), (2) the Underwriters make
payment therefor as provided herein, (3) such
16
Securities are delivered to the Representatives in accordance with the
provisions of the Custody Agreement, and (4) the Underwriters obtain control
of the Securities (within the meaning of Section 8-106 of the UCC), the
Underwriters will acquire all of the Selling Stockholder's rights and
interest in such Securities free of any adverse claim (within the meaning of
Section 8-105 of the UCC);
(iii) no consent, approval, authorization or order of any
federal or New York court or governmental agency or body is required for the
consummation by the Selling Stockholder of the transactions contemplated herein,
except such as may have been obtained under the Act and such as may be required
under the securities or blue sky laws of any jurisdiction and the rules of the
National Association of Securities Dealers Inc. in connection with the purchase
and distribution of the Securities by the Underwriters and such other approvals
(specified in such opinion) as have been obtained; and
(iv) neither the sale of the Securities being sold by the
Selling Stockholder nor the consummation of any other of the transactions herein
contemplated by the Selling Stockholder or the fulfillment of the terms hereof
by the Selling Stockholder will conflict with, result in a breach or violation
of, or constitute a default under any Applicable Law or the certificate of
formation or operating agreement of the Selling Stockholder or any judgment,
order or decree known to such counsel to be applicable to the Selling
Stockholder or of any New York or federal court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction over the Selling
Stockholder.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of New York or the
federal laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing whom they
believe to be reliable and who are satisfactory to counsel for the Underwriters,
and (B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Selling Stockholder and public officials.
(f) The Representatives shall have received from ▇▇▇▇▇▇▇
Procter LLP, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the issuance
and sale of the Securities, the Registration Statement, the Prospectus (together
with any supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company and the Selling Stockholder shall have
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(g) The Company shall have furnished to the Representatives a
certificate of the Company, signed by (i) the Chief Executive Officer and
President of the Company and (ii) the Chief Financial Officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement, the Prospectus, any supplements
to the Prospectus, and this Agreement and that:
(i) the representations and warranties of the Company in
this Agreement are true and correct on and as of the Closing Date with the same
effect as if made on
17
the Closing Date 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 Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or, to the Company's knowledge, threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any supplement thereto),
there has been no material adverse effect on the condition (financial or
otherwise), prospects, earnings, business or properties of the Company, except
as set forth in or contemplated in the Prospectus (exclusive of any supplement
thereto).
(h) The Selling Stockholder shall have furnished to the
Representatives a certificate of the Selling Stockholder, signed by an
authorized representative of the Selling Stockholder, dated the Closing Date, to
the effect that the signer of such certificate has carefully examined the
Registration Statement, the Prospectus, any supplements to the Prospectus, this
Agreement and the Irrevocable Power of Attorney and Custody Agreement and that
the representations and warranties of the Selling Stockholder in this Agreement
and the Irrevocable Power of Attorney and Custody Agreement are true and correct
on and as of the Closing Date with the same effect as if made on the Closing
Date.
(i) The Company shall have requested and caused Ernst & Young
LLP to have furnished to the Representatives letters, at the Execution Time and
at the Closing Date, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Representatives,
confirming that they are independent accountants within the meaning of the Act
and the applicable rules and regulations adopted by the Commission thereunder
and that they have performed a review of the unaudited interim financial
information of the Company for the nine-month period ended September 30, 1999
and September 30, 2000, and as of September 30, 2000, in accordance with
Statement on Auditing Standards No. 71, and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules included in the Registration Statement and the
Prospectus and reported on by them comply as to form in all material respects
with the applicable accounting requirements of the Act and the related rules and
regulations adopted by the Commission;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its subsidiaries; their
limited review, in accordance with standards established under Statement on
Auditing Standards No. 71, of the unaudited interim financial information for
the nine-month period ended September 30, 1999 and September 30, 2000, and as of
September 30, 2000; carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the meetings of
the stockholders, directors and audit and compensation committees of the Company
and meetings of the Member of the Subsidiary; and
18
inquiries of certain officials of the Company who have responsibility for
financial and accounting matters of the Company and the Subsidiary as to
transactions and events subsequent to December 31, 1999, nothing came to their
attention which caused them to believe that:
(1) [Intentionally left blank]
(2) with respect to the period subsequent to
September 30, 2000, there were any changes, at a specified date not more
than five days prior to the date of the letter, in the capital stock of
the Company or decreases in the stockholders' equity of the Company as
compared with the amounts shown on the September 30, 2000 balance sheet
included in the Registration Statement and the Prospectus; or for the
period from October 1, 2000 to such specified date there were any
decreases, as compared with the period from October 1, 1999 to February
9, 2000 in income before income taxes or in total or per share amounts of
net income of the Company, except in all instances for changes or
decreases set forth in such letter, in which case the letter shall be
accompanied by an explanation by the Company as to the significance
thereof unless said explanation is not deemed necessary by the
Representatives; and
(3) the information included in the Registration
Statement and Prospectus in response to Regulation S-K, Item 301
(Selected Financial Data), is not in conformity with the applicable
disclosure requirements of Regulation S-K; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general accounting records
of the Company and the Subsidiary) set forth in the Registration Statement and
the Prospectus, including the information set forth under the captions "SELECTED
FINANCIAL DATA" and "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS" in the Prospectus, agrees with the accounting records
of the Company and the Subsidiary, excluding any questions of legal
interpretation.
References to the Prospectus in this paragraph (i) include any supplement
thereto at the date of the letter.
(j) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Prospectus (exclusive of any supplement thereto),
there shall not have been (i) any change or decrease specified pursuant to
paragraph (i)(ii)(1) in the letter or letters referred to in paragraph (i) of
this Section 6 or (ii) any change, or any development involving a prospective
change, in or affecting the condition (financial or otherwise), prospects,
earnings, business or properties of the Company and the Subsidiary taken as a
whole, except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with the
offering or
19
delivery of the Securities as contemplated by the Registration Statement
(exclusive of any amendment thereof) and the Prospectus (exclusive of any
supplement thereto).
(k) On or prior to the Closing Date, the Company and the
Selling Stockholder shall have furnished to the Representatives such further
information, certificates and documents as the Representatives may reasonably
request.
Except as otherwise expressly provided in this Section 6, if any of the
conditions specified in this Section 6 shall not have been fulfilled in all
material respects when and as provided in this Agreement, this Agreement and all
obligations of the Underwriters hereunder may be canceled at, or at any time
prior to, the Closing Date by the Representatives. Notice of such cancellation
shall be given to the Company in writing or by telephone or facsimile confirmed
in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of ▇▇▇▇▇▇▇ Procter LLP, counsel for the Underwriters, at
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or the Boston, Massachusetts,
office of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel to the
Company), on the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth in Section 6 hereof is not satisfied, because of
any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company or the Selling Stockholder to
perform any agreement herein or comply with any provision hereof other than by
reason of a default by any of the Underwriters, the Company will reimburse the
Underwriters severally through ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. on demand for all
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of counsel) that shall have been incurred by them solely in connection with the
proposed purchase and sale of Securities. If the Company is required to make any
payments to the Underwriters under this Section 7 because of the Selling
Stockholder's refusal, inability or failure to satisfy any condition to the
obligations of the Underwriters set forth in Section 6, the Selling Stockholder
shall reimburse the Company on demand for all amounts so paid.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each
Underwriter and each person who controls any Underwriter within the meaning
of either the Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
a material fact contained in the registration statement for the registration
of the Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in the case of the
20
Preliminary Prospectus or the Prospectus, in light of the circumstances in which
they were made, not misleading, and agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon any such untrue statement or alleged untrue
statement or omission or alleged omission made therein in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
any Underwriter through the Representatives specifically for inclusion therein;
PROVIDED FURTHER, that with respect to any untrue statement or omission of
material fact made in any Preliminary Prospectus, the indemnity agreement
contained in this Section 8(a) shall not inure to the benefit of any Underwriter
from whom the person asserting any such loss, claim, damage or liability
purchased the Securities concerned, to the extent that any such loss, claim,
damage or liability of such Underwriter occurs under the circumstance where it
shall have been determined by a court of competent jurisdiction by final and
nonappealable judgment that (w) the Company had previously furnished copies of
the Prospectus to the Representatives, (x) delivery of the Prospectus was
required by the Act to be made to such person, (y) the untrue statement or
omission of a material fact contained in the Preliminary Prospectus was
corrected in the Prospectus and (z) there was not sent or given to such person,
at or prior to the written confirmation of the sale of such securities to such
person, a copy of the Prospectus. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) The Selling Stockholder agrees to indemnify and hold
harmless the Company, each of its directors, each of its officers who signs the
Registration Statement, each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person who controls the Company or any
Underwriter within the meaning of either the Act or the Exchange Act (i) to the
same extent as the foregoing indemnity from the Company to each Underwriter, but
only with reference to written information furnished to the Company by or on
behalf of the Selling Stockholder specifically for inclusion in the documents
referred to in the foregoing indemnity and (ii) against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other federal or state
statutory law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any breach by the Selling Stockholder of any representation,
warranty, covenant or agreement contained in the Custody Agreement (other than,
in the case of the Company, its directors, officers and controlling persons, any
such loss, claim, damage or liability resulting from the negligence or willful
misconduct of any Attorney-in-Fact under the Custody Agreement). This indemnity
agreement will be in addition to any liability which the Selling Stockholder may
otherwise have.
(c) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signs the Registration Statement, each person who controls the
Company within the meaning of either the Act or the Exchange Act, and the
Selling Stockholder, to the same extent as the foregoing indemnity from the
Company to each Underwriter, but only with reference to written information
relating to such
21
Underwriter furnished to the Company by or on behalf of such Underwriter through
the Representatives specifically for inclusion in the documents referred to in
the foregoing indemnity. This indemnity agreement will be in addition to any
liability which any Underwriter may otherwise have. The Company and the Selling
Stockholder acknowledge that the statements set forth in the last paragraph of
the cover page regarding delivery of the Securities, and, under the heading
"UNDERWRITING," (i) the list of Underwriters and their respective participation
in the sale of the Securities, (ii) the sentences related to concessions and
reallowances, (iii) the paragraph related to stabilization, syndicate covering
transactions and penalty bids, and (iv) the paragraph relating to electronic
distributions of the Common Stock in any Preliminary Prospectus and the
Prospectus constitute the only information furnished in writing by or on behalf
of the several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a), (b) or (c) above unless
and to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a), (b) or (c) above. The indemnifying party
shall be entitled to appoint counsel of the indemnifying party's choice at the
indemnifying party's expense to represent the indemnified party in any action
for which indemnification is sought (in which case the indemnifying party shall
not thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
PROVIDED, HOWEVER, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded 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, (iii) 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 the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
22
(e) In the event that the indemnity provided in paragraph (a),
(b) or (c) of this Section 8 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the Company, the Selling Stockholder and
the Underwriters severally agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending the same) (collectively "LOSSES")
to which the Company, the Selling Stockholder and one or more of the
Underwriters may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company, by the Selling Stockholder, and by
the Underwriters from the offering of the Securities; PROVIDED, HOWEVER, that in
no case shall any Underwriter (except as may be provided in any agreement among
underwriters relating to the offering of the Securities) be responsible for any
amount in excess of the underwriting discount or commission applicable to the
Securities purchased by such Underwriter hereunder. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the
Company, the Selling Stockholder and the Underwriters severally shall contribute
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company, of the Selling Stockholder and of
the Underwriters in connection with the statements or omissions which resulted
in such Losses as well as any other relevant equitable considerations. Benefits
received by the Company and by the Selling Stockholder shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by each of them, as applicable, and benefits received by the
Underwriters shall be deemed to be equal to the total underwriting discounts and
commissions, in each case as set forth on the cover page of the Prospectus.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company, the Selling Stockholders or the Underwriters, the intent of the parties
and their relative knowledge, access to information and opportunity to correct
or prevent such untrue statement or omission. The Company, the Selling
Stockholder and the Underwriters agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (e), 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. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (e).
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail
to purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite
23
the names of all the remaining Underwriters) the Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase; provided, however,
that in the event that the aggregate amount of Securities which the defaulting
Underwriter or Underwriters agreed but failed to purchase shall exceed 10% of
the aggregate amount of Securities set forth in Schedule I hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter, the Selling Stockholder or
the Company. In the event of a default by any Underwriter as set forth in this
Section 9, the Closing Date shall be postponed for such period, not exceeding
five Business Days, as the Representatives shall determine in order that the
required changes in the Registration Statement and the Prospectus or in any
other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the Company and any nondefaulting Underwriter for damages occasioned by its
default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company prior
to delivery of and payment for the Securities, if at any time prior to such time
(i) trading in the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally on
the New York Stock Exchange or the Nasdaq National Market shall have been
suspended or limited or minimum prices shall have been established on such
exchange or the Nasdaq National Market, (ii) a banking moratorium shall have
been declared either by Federal or New York State authorities or (iii) there
shall have occurred any outbreak or escalation of hostilities, declaration by
the United States of a national emergency or war, or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Representatives, impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Prospectus
(exclusive of any supplement thereto).
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers, of the Selling Stockholder and of the Underwriters 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 Underwriter,
the Selling Stockholder or the Company or any of the officers, directors,
employees, agents or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to the ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. General Counsel (fax
no.: (▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc., at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel; or, if
sent to the Company, will be mailed, delivered or telefaxed to PRAECIS
PHARMACEUTICALS INCORPORATED, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇), attention of the Legal Department and
confirmed to
24
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (fax no.: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: ▇▇▇▇ ▇. ▇▇▇▇,
Esq.; or if sent to the Selling Stockholder, will be mailed, delivered or
telefaxed and confirmed to it at the address set forth in Schedule II hereto.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 8 hereof, and no other person will have any right or obligation
hereunder.
14. APPLICABLE LAW.. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for convenience only
and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended, and the rules
and regulations of the Commission promulgated thereunder.
"Business Day" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York, New York, or Boston,
Massachusetts.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Preliminary Prospectus" shall mean any preliminary prospectus referred
to in paragraph 1(i)(a) above and any preliminary prospectus included in the
Registration Statement at the Effective Date that omits Rule 430A Information.
25
"Prospectus" shall mean the prospectus relating to the Securities that is
first filed pursuant to Rule 424(b) after the Execution Time or, if no filing
pursuant to Rule 424(b) is required, shall mean the form of final prospectus
relating to the Securities included in the Registration Statement at the
Effective Date.
"Registration Statement" shall mean the registration statement referred
to in paragraph 1(i)(a) above, including exhibits and financial statements, as
amended at the Execution Time (or, if not effective at the Execution Time, in
the form in which it shall become effective) and, in the event any
post-effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date, shall also mean such registration
statement as so amended or such Rule 462(b) Registration Statement, as the case
may be. Such term shall include any Rule 430A Information deemed to be included
therein at the Effective Date as provided by Rule 430A.
"Rule 424", "Rule 430A" and "Rule 462" refer to such rules under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration statement
and any amendments thereto filed pursuant to Rule 462(b) relating to the
offering covered by the registration statement referred to in Section 1(a)
hereof.
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company, the Selling Stockholder and the several Underwriters.
Very truly yours,
PRAECIS PHARMACEUTICALS INCORPORATED
By:
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer and
President
▇.▇. ▇▇▇▇▇▇ PARTNERS (SBIC), LLC
By:
--------------------------------------
Name:
Title:
27
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Credit Suisse First Boston Corporation
CIBC World Markets Corp.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
By:
-----------------------------------------
Name:
Title:
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
28
SCHEDULE I
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
------------ --------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Credit Suisse First Boston Corporation
CIBC WORLD MARKETS CORP.
ABN AMRO Incorporated
Dain Raushcer ▇▇▇▇▇▇▇
First Union Securities, Inc.
▇▇ ▇▇▇▇▇ Securities Corporation
UBS Warburg LLC
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc.
▇.▇. ▇▇▇▇ & Company
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co., LLC
▇▇▇▇▇▇/Hunter Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Incorporated
TOTAL (14)
SCHEDULE II
--------------------------------------------------------------------------------
NUMBER OF UNDERWRITTEN
SELLING STOCKHOLDER SECURITIES TO BE SOLD
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
▇.▇. ▇▇▇▇▇▇ Partners (SBIC), LLC
c/o ▇.▇. ▇▇▇▇▇▇ Partners, LLC
1221 Avenue of the Americas
Attention: Official Notices Clerk
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EXHIBIT A
Form of Opinion of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
1. The Company has been duly incorporated and is existing and in good
standing under the laws of the State of Delaware. The Company has the status as
of the respective dates in the respective jurisdictions set forth on Schedule I
hereto.
2. The Company has the corporate power and corporate authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectus.
3. The authorized capital stock of the Company is as set forth in the
Prospectus and conforms in all material respects to the description thereof
contained in the Prospectus under the caption "Description of Capital Stock."
4. The Secondary Shares have been duly authorized and validly issued and
are fully paid and nonassessable, and were not issued in violation of any
preemptive rights arising under the General Corporation Law of the State of
Delaware (the "DGCL") or under any Applicable Contract. In rendering the opinion
set forth in this paragraph 4, we have relied solely on the Officer's
Certificate as to the receipt by the Company of the consideration referred to
therein in respect of the issuance of the shares of Convertible Preferred Stock
of the Company which were converted into the Secondary Shares in connection with
the Company's initial public offering.
5. Except as described or referred to in the Prospectus or the
Registration Statement, no options, warrants or other similar rights to
purchase, agreements or other obligations to issue, or rights to convert any
obligation into or exchange any securities for, shares of capital stock of the
Company, in each case pursuant to any Applicable Contract, are outstanding.
6. The Primary Shares to be issued and sold by the Company pursuant to
the Underwriting Agreement have been duly authorized by the Company, and, when
issued and delivered against payment therefor in accordance with the terms of
the Underwriting Agreement, will be validly issued, fully paid and
nonassessable. The issuance of the Primary Shares is not subject to any
preemptive or other similar rights to subscribe to purchase any such Primary
Shares arising under the Certificate of Incorporation, the By-Laws, the DGCL or
under any Applicable Contract.
7. The Specimen Certificates comply with all applicable statutory
requirements under the DGCL.
8. The Company has the corporate power and corporate authority to enter
into the Underwriting Agreement and to perform its obligations thereunder and to
consummate the transactions contemplated thereby, including the issuance, sale
and delivery of the Primary Shares to be issued, delivered and sold by it to the
Underwriters.
9. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
10. No Governmental Approval is legally required to be obtained or made
by the Company for the Company to execute and deliver the Underwriting
Agreement, or for the issuance or sale to the Underwriters of the Primary Shares
as provided in the Underwriting Agreement, except such as have been obtained or
made.
11. The execution and delivery by the Company of the Underwriting
Agreement, and the performance by the Company of its obligations thereunder,
including the issuance and sale to the Underwriters of the Primary Shares as
provided therein, does not breach or violate, or impose any lien, charge or
encumbrance upon any property or assets of the Company pursuant to, (i) the
Restated Certificate of Incorporation or By-Laws, (ii) the terms of any
Applicable Contract (except that we do not express any opinion as to any
covenant, restriction or provision of any such agreement or instrument with
respect to financial covenants, ratios or tests or any aspect of the financial
condition or results of operations of the Company) or (iii) any Applicable Law
or any Applicable Order.
12. The Registration Statement, as of its effective date, and the
Prospectus, as of its date, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Act and the Rules
and Regulations, except that, in each case, we express no opinion as to the
financial statements, schedules and other financial and statistical data
included or excluded therefrom or the exhibits to the Registration Statement,
and we do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or the
Prospectus, except to the extent specifically stated in paragraphs 14 and 15
below.
13. To our knowledge, there are no contracts or documents of a character
required to be filed as exhibits to the Registration Statement which are not
filed as required.
14. The descriptions in the Prospectus of certain provisions of the DGCL,
Certificate of Incorporation and By-Laws set forth under the caption
"Description of Capital Stock," to the extent that such descriptions purport to
summarize such provisions (or portions thereof) referred to therein, fairly
summarize such provisions (or portions thereof) in all material respects.
15. The descriptions in the Prospectus of certain provisions of Rules 144
and 701 under the Act set forth under the caption "Shares Eligible for Future
Sale," to the extent that such descriptions purport to summarize such provisions
(or portions thereof) referred to therein, fairly summarize such provisions (or
portions thereof) in all material respects.
16. To our knowledge, there are no legal or governmental proceedings
pending against the Company of a nature required to be described in the
Registration Statement or the Prospectus that are not described as required.
17. The Company is not required to be registered as an "investment
company" as such term is defined under the Investment Company Act of 1940, as
amended.
18. To our knowledge, no holders of securities of the Company have rights
under any Applicable Contract to have shares of Common Stock or other securities
of the Company registered pursuant to the Registration Statement, except for
registration rights set forth in the Stock and Warrant Purchase Agreement which
have been waived pursuant to the Waiver and Amendment.
We have been orally advised by the Commission that the Registration
Statement was declared effective under the Act at [ ], Washington, D.C. time, on
February [ ], 2001. We have been orally advised by the Commission that no stop
order suspending the effectiveness of the Registration Statement has been issued
and, to the best of our knowledge, no proceedings for that purpose have been
instituted or are pending or threatened by the Commission. The Prospectus was
filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations
within the time period required by Rule 424(b).
In addition, we have participated in conferences with officers and other
representatives of the Company, representatives of the Selling Stockholder,
representatives of the independent public accountants of the Company, counsel
for the Selling Stockholder, your counsel and you, at which the contents of the
Registration Statement and the Prospectus and related matters were discussed
and, although we are not passing upon, and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and have made no independent check or
verification thereof (except, to the extent covered by our opinions in
paragraphs 3 and 14, for those statements made under the caption "Description of
Capital Stock" in the Prospectus, insofar as they relate to provisions (or
portions thereof) of the DGCL, the Restated Certificate of Incorporation or
By-Laws described therein and, except to the extent covered by our opinion in
paragraph 15, for those statements made under the caption "Shares Eligible for
Future Sale" in the Prospectus, insofar as they relate to certain provisions (or
portions thereof) of Rules 144 and 701 under the Act), on the basis of the
foregoing, no facts have come to our attention that have led us to believe that
the Registration Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, as of its date, contained an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, except that, in each case, we express no opinion or belief with
respect to the financial statements, including any related notes or schedules or
other financial, statistical, or numerical data included therein or excluded
therefrom or the exhibits to the Registration Statement.