Myogen, Inc. 4,675,082 Shares of Common Stock, par value $0.001 per share Underwriting Agreement
Exhibit 1.1
Myogen, Inc.
4,675,082 Shares of Common Stock,
par value $0.001 per share
par value $0.001 per share
September 15, 2005
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
As representatives of the several Underwriters
named in Schedule A hereto,
c/o Goldman, Sachs & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
named in Schedule A hereto,
c/o Goldman, Sachs & Co.,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Myogen, Inc., a Delaware corporation (the “Company”), proposes, subject to the terms and
conditions stated herein, to issue and sell to the Underwriters named in Schedule A hereto (the
“Underwriters”) an aggregate of 4,675,082 shares (the “Firm Shares”) of common stock,
par value $0.001 per share (“Common Stock”), of the Company and, at the election of the
Underwriters, up to 701,262 additional shares (the “Optional Shares”) of Common
Stock. The Firm Shares and the Optional Shares, if any, which the Underwriters elect to purchase
pursuant to Section 2 hereof are herein collectively called the “Shares”. “Subsidiary” shall refer
herein to Myogen GmbH, a German corporation.
1. The Company represents and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-125497) (the “Initial Registration
Statement”), including a related base prospectus in respect of the Shares, has been filed with the
Securities and Exchange Commission (the “Commission”); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto but including all documents incorporated by reference in the prospectus contained
therein, to you for each of the other Underwriters have been declared effective by the Commission
in such form; the base prospectus included in the Initial Registration Statement at the time the
Initial Registration Statement was declared effective is herein after called the “Base Prospectus”;
other than a registration statement, if any, increasing the size of the offering (a “Rule 462(b)
Registration Statement”), filed pursuant to Rule 462(b) under the Securities Act of 1933, as
amended (the “Act”), which became effective upon filing, no other document with respect to the
Initial Registration Statement or document incorporated by reference therein has heretofore been
filed with the Commission (other than prospectuses filed
pursuant to Rule 424(b) of the rules and
regulations of the Commission under the Act, each in the form heretofore delivered to you); and no
stop order suspending the effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has
been issued and no proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Registration Statement or filed with
the Commission pursuant to Rule 424(b) under the Act and used prior to the filing of the Prospectus
(herein defined) is hereinafter called a “Preliminary Prospectus”; the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits
thereto and the documents incorporated by reference in the prospectus contained in the Initial
Registration Statement at the time such part of the Initial Registration Statement became
effective, each as amended at the time such part of the Initial Registration Statement became
effective, are hereinafter collectively called the “Registration Statement”; the final prospectus
supplement relating to the Shares, in the form first filed, or transmitted for filing, with the
Commission pursuant to Rule 424(b) under the Act, together with the Base Prospectus, is hereinafter
called the “Prospectus”; any reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Act, as of the date of such Preliminary Prospectus or Prospectus, as the
case may be; any reference to any amendment or supplement to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include any documents filed after the date of such
Preliminary Prospectus or Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and incorporated by reference in such Preliminary Prospectus
or Prospectus, as the case may be; and any reference to any amendment to the Registration Statement
shall be deemed to refer to and include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the Initial Registration Statement
that is incorporated by reference in the Registration Statement;
(b) The Company meets and, as of the effective date of the Initial Registration Statement met,
the requirements for use of Form S-3 under the Act;
(c) No order preventing or suspending the use of any Preliminary Prospectus has been issued by
the Commission, and each Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by an Underwriter through
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein;
(d) The documents incorporated by reference in the Prospectus, when they became effective or
were filed with the Commission, as the case may be, conformed in all material respects to the
requirements of the Act or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents 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, in the light of the circumstances under which they were
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made, not misleading;
and any further documents so filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the requirements of the
Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through ▇▇▇▇▇▇▇, Sachs & Co. expressly for
use therein;
(e) The Registration Statement conforms, and any further amendments or supplements to the
Registration Statement will conform, in all material respects to the requirements of the Act and
the rules and regulations of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any amendment thereto, contain an
untrue statement of a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the Company by an Underwriter through
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for use therein;
(f) The Prospectus and any further amendments or supplements to the Prospectus will conform,
in all material respects to the requirements of the Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the Company by an
Underwriter through ▇▇▇▇▇▇▇, Sachs & Co. expressly for use therein;
(g) Since the date of the most recent financial statements of the Company included or
incorporated by reference in the Prospectus, (i) there has not been any change in the capital stock
or long-term debt of the Company or the Subsidiary, or any dividend or distribution of any kind
declared, set aside for payment, paid or made by the Company on any class of capital stock, or any
material adverse change, or any development involving a prospective material adverse change, in or
affecting the business, properties, management, financial position, stockholders’ equity or results
of operations of the Company and the Subsidiary taken as a whole; (ii) neither the Company nor the
Subsidiary has entered into any transaction or agreement that is material to the Company and the
Subsidiary taken as a whole or incurred any liability or obligation, direct or contingent, that is
material to the Company and the Subsidiary taken as a whole; and (iii) neither the Company nor the
Subsidiary has sustained any material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor disturbance or
dispute or any action, order or decree of
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any court or arbitrator or governmental or regulatory
authority, except in each case in (i) through (iii) as otherwise set forth or contemplated in the
Prospectus;
(h) This Agreement has been duly authorized, executed and delivered by the Company;
(i) The Company has full right, power and authority to execute and deliver this Agreement and
to perform its obligations hereunder and thereunder; and all action required to be taken for the
due and proper authorization, execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby has been duly and validly taken;
(j) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as described in the Prospectus, and has been duly
qualified as a foreign corporation for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties or conducts any business
so as to require such qualification, or is subject to no material liability or disability by reason
of the failure to be so qualified in any such jurisdiction, except where the failure to be so
qualified or have such power or authority would not, individually or in the aggregate, have a
material adverse effect on the business, properties, financial position, or results of operations
of the Company and the Subsidiary taken as a whole (a “Material Adverse Effect”). Myogen GmbH is
the only subsidiary of the Company. The jurisdictions listed on Schedule B hereto are the only
jurisdictions in which the Company maintains an office, leases property or conducts business;
(k) The Company and its Subsidiary have good and marketable title in fee simple to, or have
valid rights to lease or otherwise use, all items of real and personal property that are material
to the respective businesses of the Company and its Subsidiary, in each case free and clear of all
liens, encumbrances, claims and defects and imperfections of title except those that (i) do not
materially interfere with the use made and proposed to be made of such property by the Company and
its Subsidiary or (ii) would not reasonably be expected, individually or in the aggregate, to have
a Material Adverse Effect;
(l) The Company and the Subsidiary own or possess adequate rights to use all material patents,
patent applications, trademarks, service marks, trade names, trademark registrations, service ▇▇▇▇
registrations, copyrights, licenses and know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems, processes or procedures)
(collectively, the “Intellectual Property Rights”) necessary for the conduct of their respective
businesses; and the conduct of their respective businesses will not conflict in any material
respect with any such rights of others, and the Company and the Subsidiary have not received any
notice of any claim of infringement or conflict with any such rights of others. The Company has
not received any notice of infringement of or conflict with, and the Company has no knowledge of
any infringement of or conflict with, asserted rights of others with respect to its Intellectual
Property Rights which could reasonably be expected to result in a Material Adverse Effect; the
discoveries, inventions, products or processes of the Company referred to in the Registration
Statement and the Prospectus do not, to the knowledge of the Company, infringe or conflict with any
right or patent of any third party, or any discovery,
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invention, product or process which is the
subject of a patent application filed by any third party. Further, except as described in the
Prospectus, or as would not reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect, the Company is not obligated to pay a royalty, grant a license or provide
other consideration to any third party in connection with its patents, patent rights, licenses,
inventions, trademarks, service marks, trade names, copyrights and know-how; and no third party,
including any academic or governmental organization,
possesses rights to the Intellectual Property Rights which, if exercised, could enable such
third party to develop products competitive with those of the Company or its subsidiaries or could
reasonably be expected to have a Material Adverse Effect;
(m) The Subsidiary of the Company is not currently prohibited, directly or indirectly, under
any agreement or other instrument to which it is a party or is subject, from paying any dividends
to the Company, from making any other distribution on the Subsidiary’s capital stock, from repaying
to the Company any loans or advances to the Subsidiary from the Company or from transferring any of
such Subsidiary’s properties or assets to the Company;
(n) The Subsidiary has been duly incorporated and is validly existing as a corporation in good
standing under the laws of Germany with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and has been duly qualified as
a foreign corporation or other legal entity for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no material liability or disability
by reason of the failure to be so qualified in any such jurisdiction, except where the failure to
be so qualified or have such power or authority would not, individually or in the aggregate, have a
Material Adverse Effect;
(o) The Company has an authorized capitalization as set forth in the Prospectus, and all of
the issued shares of capital stock of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable and are not subject to any pre-emptive or similar rights; except
as described in or expressly contemplated by the Prospectus, there are no outstanding rights
(including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or other equity interest in the
Company or the Subsidiary, or any contract, commitment, agreement, understanding or arrangement of
any kind relating to the issuance of any capital stock of the Company or the Subsidiary, any such
convertible or exchangeable securities or any such rights, warrants or options. The capital stock
of the Company conforms to the description of the Stock contained in the Prospectus. All of the
issued shares of capital stock of the Subsidiary have been duly and validly authorized and issued,
are fully paid and non-assessable and (except for directors’ qualifying shares and except as set
forth in the Prospectus) are owned directly or indirectly by the Company, free and clear of all
liens, encumbrances, equities or claims;
(p) The Company is in compliance with the requirements of the Nasdaq National Market for
continued listing of the Common Stock thereon and has not received any notification that, and has
no knowledge that, the Nasdaq National Market is contemplating terminating such listing nor, to the
Company’s knowledge, is there any basis therefor. The Shares have been duly authorized for listing
on the Nasdaq National Market and the transactions
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contemplated by this Agreement will not
contravene the rules and regulations of the Nasdaq National Market;
(q) The unissued Shares to be issued and sold by the Company to the Underwriters hereunder
have been duly and validly authorized and, when issued and delivered against payment therefor as
provided herein, will be duly and validly issued and fully paid and non-assessable and will conform
to the description of the Common Stock contained in the Prospectus and there are no preemptive
rights with respect to the Shares;
(r) The issue and sale of the Shares to be sold by the Company and the compliance by the
Company with all of the provisions of this Agreement and the consummation of the transactions
herein contemplated will not conflict with or result in a breach or violation of any of the terms
or provisions of, or constitute a default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or the Subsidiary pursuant
to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or the Subsidiary is a party or by which the Company or the Subsidiary is bound
or to which any of the property or assets of the Company or the Subsidiary is subject, nor will
such action result in any violation of the provisions of the Certificate of Incorporation or
By-laws of the Company or any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or the Subsidiary or any of their properties;
and no consent, approval, authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of the Shares or the
consummation by the Company of the transactions contemplated by this Agreement, except the
registration under the Act of the Shares and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the Underwriters;
(s) Neither the Company nor the Subsidiary is (i) in violation of its Certificate of
Incorporation or By-laws; (ii) in default, and no event has occurred that, with notice or lapse of
time or both, would constitute such a default, in the performance or observance of any material
obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust,
loan agreement, lease or other agreement or instrument to which it is a party or by which it or any
of its properties may be bound; or (iii) in violation of any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over the Company or the
Subsidiary or any of their properties; except, in the case of clauses (ii) and (iii) above, for any
such default or violation that would not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect;
(t) The Company and the Subsidiary possess all licenses, certificates, permits and other
authorizations issued by, and have made all declarations and filings with, the appropriate federal,
state, local or foreign governmental or regulatory authorities that are necessary for the ownership
or lease of their respective properties or the conduct of their respective businesses as described
in the Prospectus, except where the failure to possess or make the same would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect; and except as
described in the Prospectus, neither the Company nor the Subsidiary has received notice of any
revocation or modification of any such license, certificate,
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permit or authorization or has any
reason to believe that any such license, certificate, permit or authorization will not be renewed
in the ordinary course;
(u) The statements set forth in the Prospectus under the caption “Description of Capital
Stock”, insofar as they purport to constitute a summary of the terms of the Common Stock and under
the caption “Underwriting”, insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair;
(v) Except as described in the Prospectus, there are no legal, governmental or regulatory
investigations, actions, suits or proceedings pending to which the Company or the Subsidiary is or
may be a party or to which any property of the Company or the
Subsidiary is or may be subject that, individually or in the aggregate, if determined
adversely to the Company or the Subsidiary, could reasonably be expected to have a Material Adverse
Effect or materially and adversely affect the ability of the Company to perform its obligations
under this Agreement; no such investigations, actions, suits or proceedings are to the knowledge of
the Company threatened or contemplated by any governmental or regulatory authority or threatened by
others; and (i) there are no current or pending legal, governmental or regulatory actions, suits or
proceedings that are required under the Act to be described in the Prospectus that are not so
described and (ii) there are no statutes, regulations or contracts or other documents that are
required under the Act to be filed as exhibits to the Registration Statement or described in the
Registration Statement or the Prospectus that are not so filed or described;
(w) The Company is not and, after giving effect to the offering and sale of the Shares, will
not be an “investment company”, as such term is defined in the Investment Company Act of 1940, as
amended (the “Investment Company Act”);
(x) The Company and the Subsidiary have paid all federal, state, local and foreign taxes and
filed all tax returns required to be paid or filed through the date hereof except to the extent
that such taxes are being contested in good faith and any reserves required under GAAP have been
made; and except as otherwise disclosed in the Prospectus, there is no tax deficiency that has
been, or could reasonably be expected to be, asserted against the Company or the Subsidiary or any
of their respective properties or assets;
(y) The financial statements and the related notes thereto included in the Prospectus comply
in all material respects with the applicable requirements of the Act and the Exchange Act, and the
rules and regulations of the Commission thereunder, as applicable, and present fairly the financial
position of the Company and the Subsidiary as of the dates shown and their results of operations
and cash flows for the periods shown, and, except as otherwise disclosed in the Prospectus, such
financial statements have been prepared in conformity with the generally accepted accounting
principles in the United States applied on a consistent basis and the schedules included in the
Registration Statement present fairly the information required to be stated therein. The summary
historical financial information set forth in the Registration Statement, the Preliminary
Prospectus and the Prospectus (and any amendment or supplement thereto) under the captions “Summary
Consolidated Financial Data” presents fairly the information shown thereby in all material respects
and prepared on a basis consistent with the audited and unaudited historical consolidated financial
statements from which it has been derived. The pro forma capitalization table included in the
Registration Statement, the
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Preliminary Prospectus and the Prospectus has been prepared on a basis
consistent with such historical consolidated financial statements of the Company, except for the
pro forma adjustments specified therein, and give effect to assumptions made on a reasonable basis
and in good faith and fairly present the significant financial effects directly attributable to the
proposed transactions under this Agreement. Other financial and statistical information and data
included in, or incorporated by reference in, the Registration Statement or Prospectus, historical
and pro forma, presents fairly the information shown thereby and, in the case of financial
information and data, is prepared on a basis consistent with such financial statements and/or the
books and records of the Company and the Subsidiary. Nothing has come to the attention of the
Company that has caused the Company to believe that the statistical and market-related data
included in the Registration Statement and the Prospectus is not based on or derived from sources
that are reliable and accurate in
all material respects. All non-GAAP financial information included in the Registration
Statement and the Prospectus complies with the requirements of Regulation G and Item 10 of
Regulation S-K under the Securities Act;
(z) No forward-looking statement (within the meaning of Section 27A of the Act and Section 21E
of the Exchange Act) contained in the Prospectus has been made or reaffirmed without what the
Company believes to be a reasonable basis or has been disclosed other than in good faith;
(aa) PricewaterhouseCoopers LLP and Ernst & Young LLP, who have each certified or reviewed, as
applicable, certain financial statements of the Company and the Subsidiary, and in the case of
PricewaterhouseCoopers LLP, have audited the Company’s internal control over financial reporting
and management’s assessment thereof, are each independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder;
(bb) No labour dispute with the employees of the Company or the Subsidiary exists or, to the
knowledge of the Company, is contemplated or threatened;
(cc) The clinical trials conducted by or on behalf of the Company that are described in the
Prospectus, or the results of which are referred to in the Prospectus, if any, are the only
clinical trials currently being conducted by or on behalf of the Company. Nothing has come to the
attention of the Company that has caused the Company to believe that such studies and tests were
and, if still pending, are being, conducted not in accordance with experimental protocols,
procedures and controls pursuant to accepted professional scientific standards; the descriptions of
the results of such studies, tests and trials contained in the Prospectus, if any, are not
inconsistent with such results in any material respects. Except as described in the Prospectus, no
results of any other studies or tests have come to the attention of the Company that have caused
the Company to believe that such results call into question the results described in the Prospectus
of the clinical trials. The Company has not received any notices or correspondence from the Food
and Drug Administration or any other governmental agency requiring the termination, suspension or
modification of any clinical trials currently conducted by, or on behalf of, the Company or in
which the Company has participated that are described in the Prospectus, if any, or the results of
which are referred to in the Prospectus. Nothing has come to the attention of the Company that has
caused the Company to believe that the clinical trials previously conducted by or on behalf of the
Company while conducted by or on behalf of
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the Company, were not conducted in accordance with
experimental protocols, procedures and controls pursuant to accepted professional scientific
standards; the descriptions of the results of such studies, tests and trials contained in the
Prospectus, if any, are not inconsistent with such results. None of the clinical research
organizations or other thirds parties utilized by the Company to provide services in connection
with any of its clinical trials has any financial or other relationship with the Company or any of
its affiliates that would cause such organization or third party not to be deemed independent of
the Company or that would otherwise compromise the integrity of the results of such trials, based
on applicable industry standards;
(dd) The Company and the Subsidiary have insurance covering their respective properties,
operations, personnel and businesses, including business interruption insurance, which insurance is
in such amounts and insures against such losses and risks as would customarily be obtained by other
companies similarly situated and in a similar
business; and neither the Company nor the Subsidiary has (i) received notice from any insurer
or agent of such insurer that capital improvements or other expenditures are required or necessary
to be made in order to continue such insurance or (ii) any reasonable belief that it will not be
able to renew its existing insurance coverage as and when such coverage expires or to obtain
similar coverage at reasonable cost from similar insurers as may be necessary to continue its
business;
(ee) The Company and the Subsidiary (i) make and keep accurate books, records and accounts,
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of
assets of the Company and the Subsidiary and (ii) maintain internal accounting controls sufficient
to provide reasonable assurances that (A) transactions are executed in accordance with management’s
general or specific authorization, (B) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting principles and to maintain
asset accountability, (C) access to assets is permitted only in accordance with management’s
general or specific authorization and (D) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences;
(ff) There is and has been no failure on the part of the Company and any of the Company’s
directors or officers, in their capacities as such, to comply in all material respects with any
provision of the Sarbanes Oxley Act of 2002 (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”) and the rules and
regulations promulgated in connection therewith, including Section 402 related to loans and
Sections 302 and 906 related to certifications; the chief executive officer and the chief financial
officer of the Company have made all certifications required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and any
related rules and regulations promulgated by the Commission, and the statements contained in any
such certification are complete and correct;
(gg) The Company has established and maintains “disclosure controls and procedures” (as
defined in Rule 13a-15e and Rule 15d-15e under the Exchange Act) that comply with the requirements
of the Exchange Act and are effective; such disclosure controls and procedures are designed to
ensure that material information relating to the Company and the Subsidiary, is made known to the
Company’s chief executive officer and its chief financial officer by others within those entities;
the Company’s auditors and the audit committee of the board of directors of the Company have been
advised of: (1) any significant deficiencies in the design or operation of internal controls which
could adversely affect the Company’s ability to
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record, process, summarize and report financial
data; and (2) any fraud, whether or not material, that involves management or other employees who
have a role in the Company’s internal controls; any material weaknesses in internal controls have
been identified for the Company’s auditors; and since the date of the most recent evaluation of
such disclosure controls and procedures, there have been no significant changes in internal
controls or in other factors that could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and weaknesses;
(hh) No relationship, direct or indirect, exists between or among the Company or the
Subsidiary, on the one hand, and the directors, officers, stockholders, customers or suppliers of
the Company or the Subsidiary, on the other, that is required by the Act to be described in the
Registration Statement and the Prospectus and that is not so described;
(ii) Except as described in the Prospectus, each of the Company and the Subsidiary (A) is in
compliance with any and all applicable federal, state and local laws and regulations relating to
the protection of human health and safety, the environment or hazardous or toxic substances or
waste, pollutants or contaminants (“Environmental Laws”), (B) has received all permits, licenses or
other approvals required of it under applicable Environmental Laws to conduct its business and (C)
is in compliance with all terms and conditions of any such permit, license or approval, except for
such noncompliance with Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits, licenses or approvals
that would not, individually or in the aggregate, have a Material Adverse Effect. Except as
described in the Registration Statement or Prospectus, there has been no storage, disposal,
generation, transportation, handling or treatment of hazardous substances or solid wastes by the
Company or the Subsidiary (or to the knowledge of the Company or the Subsidiary, any of their
respective predecessors in interest for whose acts or omissions the Company would reasonably be
expected to be liable) at, upon or from any of the property now or previously owned or leased by
the Company or any of its subsidiaries in violation of any applicable law, ordinance, rule,
regulation, order, judgment, decree or permit or which would require remedial action by the Company
or the Subsidiary under any applicable law, ordinance, rule, regulation, order, judgment, decree or
permit, except for any violation or remedial action which would not result in, or which would not
be reasonably likely to result in, individually or in the aggregate with all such violations and
remedial actions, a Material Adverse Effect; and there has been no spill, discharge, leak,
emission, injection, escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any solid wastes or hazardous substances due to or caused
by the Company or the Subsidiary, except for any such spill, discharge, leak, emission, injection,
escape, dumping or release which would not result in or would not be reasonably likely to result
in, individually or in the aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings and releases, a Material Adverse Effect. The terms “Hazardous
Substances” and “Solid Wastes” as used herein shall have the meanings specified in any applicable
Environmental Law;
(jj) Neither the Company nor any of its affiliates has taken, directly or indirectly, any
action which is designed to or which has constituted or which might reasonably be expected to cause
or result in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or the resale of the Shares;
- 10 -
2. Subject to the terms and conditions herein set forth, (a) the Company agrees to issue and
sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Company, at a purchase price per share of $21.855, the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule A hereto and (b) in the
event and to the extent that the Underwriters shall exercise the election to purchase Optional
Shares as provided below, the Company agrees to sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at the purchase price
per share set forth in clause (a) of this paragraph, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as to eliminate
fractional shares) determined by multiplying such number of Optional Shares by a fraction, the
numerator of which is the maximum number of Optional Shares which such Underwriter is entitled to
purchase as set forth opposite the name of such Underwriter in Schedule A hereto and the
denominator of which is the maximum number of Optional Shares that all of the Underwriters are entitled to
purchase hereunder.
The Company hereby grants to the Underwriters the right (an “Additional Shares Option”) to
purchase at their election up to 701,262 Optional Shares, at the purchase price per
share set forth in the paragraph above, for the sole purpose of covering sales of shares in excess
of the number of Firm Shares. Any such election to purchase Optional Shares may be exercised only
by written notice from you to the Company, given within a period of thirty (30) calendar days after
the date of this Agreement, setting forth the aggregate number of Optional Shares to be purchased
and the date on which such Optional Shares are to be delivered, as determined by ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co. but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or,
unless you and the Attorneys-in-Fact otherwise agree in writing, earlier than two or later than ten
business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the several Underwriters
propose to offer the Firm Shares for sale upon the terms and conditions set forth in the
Prospectus.
4. (a) The Firm Shares and the Optional Shares to be purchased by each Underwriter hereunder,
in definitive form, and in such authorized denominations and registered in such names as ▇▇▇▇▇▇▇,
Sachs & Co. may request upon at least forty-eight hours’ prior notice to the Company shall be
delivered by or on behalf of the Company to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., through the facilities of The
Depository Trust Company (“DTC”), for the account of such Underwriter, against payment by or on
behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day)
funds to the account specified by the Company to ▇▇▇▇▇▇▇, Sachs & Co. at least forty-eight hours in
advance. If requested by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., the Company will cause the certificates
representing the Shares to be made available for checking and packaging at least twenty-four hours
prior to the Time of Delivery (as defined below) with respect thereto at the office of DTC or its
designated custodian (the “Designated Office”). The time and date of such delivery and payment
shall be, with respect to the Firm Shares, 9:30 a.m., New York time, on September 21, 2005 or
such other time and date as ▇▇▇▇▇▇▇, Sachs & Co. and the Company may agree upon in writing, and,
with respect to the Optional Shares, 9:30 a.m., New York time, on the date specified by ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. in the written notice given by ▇▇▇▇▇▇▇, Sachs & Co. of the Underwriters’ election to
purchase such Optional Shares, or such other time and date as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and the Company
may
-11-
agree upon in writing. Such time and date for delivery of the Firm Shares is herein called the
“First Time of Delivery”, such time and date for delivery of the Optional Shares, if not the First
Time of Delivery, is herein called the “Second Time of Delivery”, and each such time and date for
delivery is herein called a “Time of Delivery”.
(b) The documents to be delivered at each Time of Delivery by or on behalf of the parties
hereto pursuant to Section 7 hereof, including the cross receipt for the Shares and any additional
documents requested by the Underwriters pursuant to Section 7(p) hereof, will be delivered at the
offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
“Closing Location”), and the Shares will be delivered at the Designated Office, all at such Time of
Delivery. A meeting will be held at the Closing Location at 4:00 p.m., New York City time, on the
New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of
the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For
the purposes of this Section 4, “New York Business Day” shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking institutions in New York are generally
authorized or obligated by law or executive order to close.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus in a form approved by ▇▇▇▇▇▇▇, Sachs & Co. and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission’s close of business
on the second business day following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no
further amendment or any supplement to the Registration Statement or Prospectus prior to the last
Time of Delivery which shall be reasonably disapproved by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. promptly after
reasonable notice thereof; to advise ▇▇▇▇▇▇▇, Sachs & Co., promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus has been filed and to
furnish ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. with copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and
for so long as the delivery of a prospectus is required in connection with the offering or sale of
the Shares; to advise ▇▇▇▇▇▇▇, Sachs & Co., promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or suspending the use of
any Preliminary Prospectus or Prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any
such purpose, or of any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in the event of the
issuance of any stop order or of any order preventing or suspending the use of any Preliminary
Prospectus or Prospectus relating to the Shares or suspending any such qualification, promptly to
use its best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. may reasonably
request to qualify the Shares for offering and sale under the securities laws of such jurisdictions
as ▇▇▇▇▇▇▇, Sachs & Co. may request and to comply with such laws so as to
-12-
permit the continuance of
sales and dealings therein in such jurisdictions for as long as may be necessary to complete the
distribution of such Shares, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to service of process in
any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York Business Day next succeeding the
date of this Agreement and from time to time, to furnish the Underwriters with written and
electronic copies of the Prospectus in New York City in such quantities as ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. may
reasonably request, and, if the delivery of a prospectus is required at any time prior to the
expiration of nine months after the time of issues of the Prospectus in connection with the
offering or sale of the Shares and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during such period to amend or
supplement the Prospectus or to file under the Exchange Act any document incorporated by reference
in the Prospectus in order to comply with the Act or the Exchange Act, to notify ▇▇▇▇▇▇▇, Sachs &
Co. and upon their request to file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many written and electronic copies as ▇▇▇▇▇▇▇, ▇▇▇▇▇
& Co. may from time to time reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of any of the Shares at
any time nine months or more after the time of issue of the Prospectus, upon your request but at
the expense of such Underwriter to prepare and deliver to such Underwriter as many written and
electronic copies as you may request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Act;
(d) To make generally available to its security holders as soon as practicable, but in any
event not later than eighteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the rules and regulations
of the Commission thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and including the date
90 days after the date of this Agreement (the initial “Lock-Up Period”), not to offer, sell,
contract to sell or otherwise dispose of, except as provided hereunder any securities of the
Company that are substantially similar to the Shares, including but not limited to any securities
that are convertible into or exchangeable for, or that represent the right to receive, Stock or any
such substantially similar securities (other than pursuant to employee stock option plans existing
on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of,
the date of this Agreement), without the prior written consent of ▇▇▇▇▇▇▇, Sachs & Co.; provided,
however, that if (1) during the last 17 days of the initial Lock-Up Period, the Company releases
earnings results or announces material news or a material event or (2) prior to the expiration of
the initial Lock-Up period, the Company announces that it will release earnings results during the
15-day period following the last day of the initial Lock-Up Period,
-13-
then in each case the Lock-Up
Period will be automatically extended until the expiration of the 18-day period beginning on the
date of release of the earnings results or the announcement of the material news or material event,
as applicable, unless ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. waives, in writing, such extension; and the Company will
provide ▇▇▇▇▇▇▇, Sachs & Co. and any co-managers and each stockholder subject to the Lock-Up Period
pursuant to the lockup letters described in Section 7(l) of this Agreement with prior notice of any
such announcement that gives rise to an extension of the Lock-up Period;
(f) To furnish to its stockholders as soon as practicable after the end of each fiscal year an
annual report (including a balance sheet and statements of income, stockholders’ equity and cash
flows of the Company and its consolidated subsidiaries certified by independent public accountants)
and, as soon as practicable after the end of each of the first three quarters of each fiscal year
(beginning with the fiscal quarter ending after the effective date of the Registration Statement),
to make available to its stockholders consolidated summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) During a period of five years from the effective date of the Registration Statement, to
furnish to you copies of all reports or other communications (financial or other) furnished to
stockholders, and to deliver to you (i) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national securities exchange
on which any class of securities of the Company is listed; and (ii) such additional information
concerning the business and financial condition of the Company as you may from time to time
reasonably request (such financial statements to be on a consolidated basis to the extent the
accounts of the Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission); it being understood that a filing of a report or
other communication with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system (“▇▇▇▇▇”) shall constitute delivery under this clause (g);
(h) To use the net proceeds received by it from the sale of the Shares pursuant to this
Agreement in the manner specified in the Prospectus under the caption “Use of Proceeds”;
(i) To use its best efforts to list for quotation the Shares on the Nasdaq National Market and
to maintain compliance in all material respects with the Company’s reporting, filing and other
obligations under the rules of the Nasdaq National Market.
(j) If the Company elects to rely upon Rule 462(b), the Company shall file a Rule 462(b)
Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M.,
Washington, D.C. time, on the date of this Agreement, and the Company shall at the time of filing
either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give
irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act; and
(k) Upon request of any Underwriter, to furnish, or cause to be furnished, to such Underwriter
an electronic version of the Company’s trademarks, servicemarks and corporate logo for use on the
website, if any, operated by such Underwriter for the purpose of facilitating the on-line offering
of the Shares (the “License”); provided, however, that the
-14-
License shall be used solely for the
purpose described above, is granted without any fee and may not be assigned or transferred.
6. The Company covenants and agrees with the several Underwriters that the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the Company’s counsel
and accountants in connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing
and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum, closing
documents (including any compilations thereof) and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iii) all fees and expenses in connection with
listing the Shares on the Nasdaq National Market; (iv) the filing fees incident to, and the fees
and disbursements of counsel for the Underwriters in connection with, securing any required
review by the National Association of Securities Dealers, Inc. of the terms of the sale of the
Shares; (v) the cost of preparing stock certificates; (vi) the cost and charges of any transfer
agent or registrar or dividend disbursing agent; and (vii) all other costs and expenses incident to
the performance of its obligations hereunder and under any Additional Shares Options which are not
otherwise specifically provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on resale of any of the
Shares by them, and any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder as to the Shares to be delivered at each Time
of Delivery, shall be subject, in the discretion of ▇▇▇▇▇▇▇, Sachs & Co., to the condition that all
representations and warranties and other statements of the Company herein are, at and as of such
Time of Delivery, true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within
the applicable time period prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 4(a) hereof; if the Company has elected to rely upon Rule 462(b),
the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M., Washington, D.C.
time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.’s reasonable
satisfaction;
(b) ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ llp, counsel for the Underwriters, shall have furnished
to ▇▇▇▇▇▇▇, Sachs & Co. such written opinion or opinions, dated such Time of Delivery, in form and
substance satisfactory to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such matters;
-15-
(c) ▇▇▇▇▇▇ Godward llp, counsel for the Company, shall have furnished to ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. their written opinion (drafts of such opinions are attached as Annex I(a) hereto),
dated such Time of Delivery, in form and substance satisfactory to ▇▇▇▇▇▇▇, Sachs & Co.;
(d) Fulbright & ▇▇▇▇▇▇▇▇ L.L.P., intellectual property counsel for the Company, shall have
furnished to ▇▇▇▇▇▇▇, Sachs & Co. their written opinion (drafts of such opinions are attached as
Annex I(b) hereto), dated such Time of Delivery, in form and substance satisfactory to ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co.;
(e) ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP, regulatory counsel for the Company, shall have furnished to ▇▇▇▇▇▇▇,
Sachs & Co. their written opinion (drafts of such opinions are attached as Annex I(c) hereto),
dated such Time of Delivery, in form and substance satisfactory to ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.;
(f) ▇▇▇▇▇-▇▇▇▇▇▇ v.Danwitz Privat, counsel to the Subsidiary, shall have furnished to ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co. their written opinion (drafts of such opinions are
attached as Annex I(d) hereto), dated such Time of Delivery, in form and substance
satisfactory to ▇▇▇▇▇▇▇, Sachs & Co.;
(g) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30
a.m., New York City time, on the effective date of any post-effective amendment to the Registration
Statement filed subsequent to the date of this Agreement and also at each Time of Delivery, each of
PricewaterhouseCoopers LLP and Ernst & Young LLP shall have furnished to you a letter or letters,
dated the respective dates of delivery thereof, in form and substance satisfactory to you, to the
effect set forth in Annex II hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex II(a) hereto and a draft of the form of letter to
be delivered on the effective date of any post-effective amendment to the Registration Statement
and as of each Time of Delivery is attached as Annex II(b) hereto);
(h) Neither the Company nor the Subsidiary shall have sustained since the date of the latest
audited financial statements included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus, and (ii) since the respective dates
as of which information is given in the Prospectus there shall not have been any change in the
capital stock or long-term debt, or any decreases in consolidated net current assets, of the
Company or the Subsidiary or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, stockholders’ equity or results of
operations of the Company and the Subsidiary, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause (i) or (ii), is in the
judgment of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. so material and adverse as to make it impracticable or inadvisable
to proceed with the public offering or the delivery of the Shares being delivered at such Time of
Delivery on the terms and in the manner contemplated in the Prospectus;
-16-
(i) To the extent any of the securities of the Company are subject to rating by any
“nationally recognized statistical rating organization”, as such term is defined by the Commission
for purposes of Rule 436(g)(2) under the Securities Act, subsequent to the execution and delivery
of this Agreement, (i) no downgrading shall have occurred in the rating accorded any securities or
preferred stock of or guaranteed by the Company or the Subsidiary by any such organization and (ii)
no such organization shall have publicly announced that it has under surveillance or review, or has
changed its outlook with respect to, its rating of any securities or preferred stock of or
guaranteed by the Company or the Subsidiary (other than an announcement with positive implications
of a possible upgrading).
(j) On or after the date hereof there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New York Stock Exchange
or the Nasdaq National Market; (ii) a suspension or material limitation in trading in the Company’s
securities on the Nasdaq National Market; (iii) a general moratorium on commercial banking
activities declared by either Federal, New York or Colorado State authorities or a material
disruption in commercial banking or securities settlement or clearance services in the United
States; (iv) the outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war or (v) the occurrence of any other
calamity or crisis or any change in financial, political or economic conditions in the United
States or elsewhere, if the effect of any such event specified in clause (iv) or (v) in the judgment of ▇▇▇▇▇▇▇, Sachs & Co. makes
it impracticable or inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(k) The Shares to be sold at such Time of Delivery shall have been duly listed, subject to
notice of issuance, on the Nasdaq National Market;
(l) The Company has obtained and delivered to the Underwriters executed copies of an agreement
(each a “Lock-Up Agreement”) from each executive officer, director and stockholder of the Company
listed on Schedule C hereto, substantially to the effect set forth Annex III hereto;
(m) The Company shall have complied with the provisions of Section 5(c) hereof with respect to
the furnishing of prospectuses on the New York Business Day next succeeding the date of this
Agreement;
(n) ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. shall have received on and as of each Time of Delivery, a certificate
of the chief financial officer or chief accounting officer of the Company and one additional senior
executive officer of the Company who is reasonably satisfactory to ▇▇▇▇▇▇▇, Sachs & Co. (i)
confirming that such officers have carefully reviewed the Registration Statement and the Prospectus
and, to the best knowledge of such officers, the representation set forth in Section 1(c) hereof is
true and correct, (ii) confirming that to the best of such Officer’s knowledge after due
investigation the other representations and warranties of the Company in this Agreement are true
and correct and that the Company has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to such Time of Delivery and (iii) to
the effect set forth in paragraphs (a), (h) and (i) above;
-17-
(o) No action shall have been taken and no statute, rule, regulation or order shall have been
enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority
that would, as of the applicable Time of Delivery prevent the issuance or sale of the Shares; and
no injunction or order of any federal, state or foreign court shall have been issued that would, as
of the applicable Time of Delivery prevent the issuance or sale of the Shares; and
(p) On or prior to the applicable Time of Delivery the Company shall have furnished to
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. such further certificates and documents as ▇▇▇▇▇▇▇, Sachs & Co. may reasonably
request.
8. (a) The Company will indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of
a material fact contained in any Preliminary Prospectus, the Registration Statement, the Base
Prospectus or the Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement, the Base Prospectus or the
Prospectus or any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. expressly for
use therein.
(b) Each Underwriter severally and not jointly, will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration Statement, the Base
Prospectus or the Prospectus or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case to the extent, but
only to the extent, that such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, the Registration Statement, the Base Prospectus or
the Prospectus or any such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through ▇▇▇▇▇▇▇, Sachs & Co. expressly for
use therein; and will reimburse the Company for any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such action or claim as such expenses
are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice
of the commencement of any action, such indemnified party shall, if a claim in
-18-
respect thereof is
to be made against the indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to any indemnified party otherwise than under such
subsection. In case any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified party, be counsel to
the indemnifying party), and, after notice from the indemnifying party to such indemnified party of
its election so to assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying party shall, without
the written consent of the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or claim in respect of
which indemnification or contribution may be sought hereunder (whether or not the indemnified party
is an actual or potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from all liability arising
out of such action or claim and (ii) does not include any statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party. The indemnifying person
shall not be liable for any settlement of any
proceeding effected without its written consent (such consent not unreasonably withheld), but
if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying
person agrees to indemnify each indemnified person from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified person shall have requested that an indemnifying person reimburse the indemnified
person for fees and expenses of counsel as contemplated by this paragraph, the indemnifying person
shall be liable for any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by the indemnifying person of such
request and (ii) the indemnifying person shall not have reimbursed the indemnified person in
accordance with such request prior to the date of such settlement.
(d) If the indemnification provided for in this Section 8 is unavailable to or insufficient to
hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other from the offering of the Shares. If, however, the
allocation provided by the immediately preceding sentence is not permitted by applicable law or if
the indemnified party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or liabilities (or actions
in respect thereof), as well as any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Underwriters on the other shall be deemed to
-19-
be in
the same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company on the one hand or the Underwriters on the
other and the parties’ relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations referred to above
in this subsection (d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages which such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in
this subsection (d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in addition to any liability
which the Company may otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of
the Underwriters under this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Company (including any person who, with his or her consent, is named in
the Registration Statement as about to become director of the Company) and to each person, if any,
who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the Shares which it has
agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you or
another party or other parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such
Shares, then the Company shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such Shares on such terms.
In the event that, within the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Shares, or the Company notifies ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. that they
have so arranged for the purchase of such Shares, you or the Company shall have the right to
postpone the Time of Delivery for such Shares for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the
-20-
Prospectus which in your opinion may thereby be
made necessary. The term “Underwriter” as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had originally been a party to
this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by you and the Company, as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased does not exceed one-eleventh of the
aggregate number of all the Shares to be purchased at such Time of Delivery, then the Company shall
have the right to require each non-defaulting Underwriter to purchase the number of Shares which
such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require
each non-defaulting Underwriter to purchase its pro rata share (based on the number of Shares which
such Underwriter agreed to purchase hereunder) of the Shares, as the case may be, of such
defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Shares of a defaulting
Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased exceeds one-eleventh of the aggregate
number of all the Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or
Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations
of the Underwriters to purchase and of the Company to sell the Optional Shares) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or the Company, except
for the expenses to be borne by the Company and the Underwriters as provided in Section 6 hereof
and the indemnity and contribution agreements in Section 8 hereof; but nothing herein shall relieve
a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and other statements
of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, the Company or any officer or
director or controlling person of the Company and shall survive delivery of and payment for the
Shares.
11. If this Agreement or Additional Shares Option shall be terminated pursuant to Section 9
hereof, the Company shall then be under no liability to any Underwriter except as provided in
Sections 6 and 8 hereof; but, if for any other reason, the Shares are not delivered by or on behalf
of the Company as provided herein, the Company will reimburse the Underwriters through ▇▇▇▇▇▇▇,
Sachs & Co. for all documented out-of-pocket expenses approved in writing by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
including fees and disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company
shall then be under no further liability to any Underwriter in respect of the Shares not so
delivered except as provided in Sections 6 and 8 hereof.
- 21 -
12. In all dealings hereunder, ▇▇▇▇▇▇▇, Sachs & Co. shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.
All statements, requests, notices and agreements hereunder shall be in writing, and if to the
Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the
representatives of the Underwriters at ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇, Attention: Registration Department, copy to ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (fax: (▇▇▇) ▇▇▇-▇▇▇▇), Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.; and
if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the
address of the Company set forth in the Registration Statement, Attention: Secretary; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof shall be delivered or
sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its
Underwriters’ Questionnaire, or telex constituting such Questionnaire, which address will be
supplied to the Company by you on request provided, however, that notices under subsection 5(e)
shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives of the Underwriters at ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Control Room. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters
and the Company and, to the extent provided in Sections 8 and 10 hereof, the officers and directors
of the Company and each person who controls the Company or any Underwriter, and their respective
heirs, executors, administrators, successors and assigns, and no other person shall acquire or have
any right under or by virtue of this Agreement. No purchaser of any of the Shares from any
Underwriter shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the term “business day”
shall mean any day when the Commission’s office in Washington, D.C. is open for business.
15. The Company acknowledges and agrees that (i) the purchase and sale of the Shares pursuant
to this Agreement is an arm’s-length commercial transaction between the Company on the one hand,
and the several Underwriters, on the other, (ii) in connection therewith and with the process
leading to such transaction each Underwriter is acting solely as a principal and not the agent or
fiduciary of the Company, (iii) no Underwriter has assumed an advisory or fiduciary responsibility
in favor of the Company with respect to the offering contemplated hereby or the process leading
thereto (irrespective of whether such Underwriter has advised or is currently advising the Company
on other matters) or any other obligation to the Company except the obligations expressly set forth
in this Agreement and (iv) the Company has consulted its own legal and financial advisors to the
extent it deemed appropriate. The Company agrees that it will not claim that the Underwriters, or
any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or
similar duty to the Company, in connection with such transaction or the process leading thereto.
- 22 -
16. This Agreement supersedes all prior agreements and understandings (whether written or
oral) between the Company and the Underwriters, or any of them, with respect to the subject matter
hereof.
17. The Company and each of the Underwriters hereby irrevocably waives, to the fullest extent
permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby.
- 23 -
If the foregoing is in accordance with your understanding, please sign and return to us five
(5) counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the
Underwriters, this letter and such acceptance hereof shall constitute a binding agreement between
each of the Underwriters and the Company. It is understood that your acceptance of this letter on
behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement
among Underwriters, the form of which shall be submitted to the Company for examination upon
request, but without warranty on your part as to the authority of the signers thereof.
| Very truly yours, MYOGEN, INC. |
||||
| By: | /s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |||
| Name: | J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Ph.D. | |||
| Title: | CEO & President | |||
Accepted as of the date hereof:
▇▇▇▇▇▇▇, Sachs & Co.
| By: | /s/ ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. | |||
| (▇▇▇▇▇▇▇, Sachs & Co.) | ||||
- 24 -
SCHEDULE A
| Maximum Number of | ||||
| Number of Firm | Optional Shares | |||
| Shares to be | Which May be | |||
| Underwriter | Purchased | Purchased | ||
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co |
2,571,295 | 385,694 | ||
CIBC World Markets Corp. |
935,017 | 140,252 | ||
First Albany Capital Inc. |
584,385 | 87,658 | ||
Lazard Frères & Co. LLC |
584,385 | 87,658 | ||
Total |
4,675,082 | 701,262 | ||
SCHEDULE B
Jurisdictions
Colorado
Germany
Germany
SCHEDULE C
Officers, Directors and Stockholders Subject to Lock-Up Agreement
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Sequel Limited Partnership
Sequel Limited Partnership III
Sequel Euro Limited Partnership
Sequel Entrepreneurs’ Fund III, LP
InterWest Partners VI LP
InterWest Investors VI LP
InterWest Partners VIII LP
InterWest Investors VIII
InterWest Investors Q VIII
New Enterprise Associates 9, Limited Partnership
New Enterprise Associates 10, Limited Partnership
NEA Ventures 1999 Limited Partnership
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
Sequel Limited Partnership
Sequel Limited Partnership III
Sequel Euro Limited Partnership
Sequel Entrepreneurs’ Fund III, LP
InterWest Partners VI LP
InterWest Investors VI LP
InterWest Partners VIII LP
InterWest Investors VIII
InterWest Investors Q VIII
New Enterprise Associates 9, Limited Partnership
New Enterprise Associates 10, Limited Partnership
NEA Ventures 1999 Limited Partnership
ANNEX I(a)
Form of Opinion of ▇▇▇▇▇▇ Godward LLP
1. The Registration Statement was declared effective under the Securities Act of 1933, as
amended (the “Securities Act”); and to our knowledge, no order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has been instituted or
overtly threatened by the Commission.
2. The Registration Statement and the Prospectus (other than the financial statements and
notes thereto or other financial or statistical data derived therefrom contained or incorporated by
reference therein, as to which we express no opinion) comply as to form in all material respects
with the applicable requirements of the Securities Act.
3. The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware with requisite corporate power to own or lease, as
the case may be, and to operate its properties and conduct its business as described in the
Prospectus. The Company is duly qualified to do business as a foreign corporation and is in good
standing under the laws of the State of Colorado.
4. The authorized, issued and outstanding capital stock of the Company was as set forth in the
Prospectus under the caption “Capitalization” as of the date stated therein and all of the issued
shares of capital stock of the Company have been duly and validly authorized and issued and are
fully paid and nonassessable.
5. The Securities have been duly authorized and, when issued and paid for by the Underwriters
pursuant to the Agreement, will be validly issued, fully paid and nonassessable; and the issuance
of the Securities is not subject to any preemptive or similar rights under the Company’s charter or
bylaws or the DGCL or any Material Contract.
6. To our knowledge, there is (i) no action, suit or proceeding by or before any court or
other governmental agency, authority or body or any arbitrator pending against the Company or its
properties by a third party of a character required to be disclosed in the Prospectus that is not
disclosed in the Prospectus as required by the Act and the rules thereunder, and (ii) no indenture,
contract, lease, mortgage, deed of trust, note agreement, loan or other agreement or instrument of
a character required to be filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus, which is not filed or incorporated by reference as
required by the Act and the rules thereunder.
7. The statements in the Prospectus under the heading “Description of Capital Stock,” insofar
as such statements purport to summarize the terms of the Common Stock, fairly present, to the
extent required by the Act and the rules thereunder, in all material respects, such terms.
8. The Agreement has been duly authorized by all necessary corporate action on the part of the
Company and has been duly executed and delivered by the Company.
9. 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 1940 Act.
10. No consent, approval, authorization or filing with or order of any court or governmental
agency or body in the United States having jurisdiction over the Company is required for the
consummation by the Company of the transactions contemplated by the Agreement, except such as have
been obtained or made under the Act and except 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 in the manner contemplated in the Agreement and in the Prospectus, or under the
bylaws, rules and regulations of the NASD.
11. The execution and delivery of the Agreement and the performance by the Company of its
obligations set forth in the Agreement to be performed at the Closing and the issuance and sale of
the Securities pursuant to the Agreement do not (i) result in a breach or violation of the charter
or bylaws of the Company, (ii) result in a breach or violation of any of the terms or provisions
of, constitute a default under or result in the creation or imposition of any lien upon any
property or assets of the Company pursuant to, any Material Contract; or (iii) result in a
violation of any statute, law, rule, or regulation that, in our experience, is typically applicable
to transactions of the nature contemplated by the Agreement and is applicable to the Company, or
any order, writ, judgment, injunction, decree, or award that has been entered against the Company
or any of its properties and of which we are aware, in the case of clauses (ii) and (iii) above,
the breach or violation of which would, individually or in the aggregate, materially and adversely
affect the Company.
12. The Registration Statement and the Prospectus (other than the financial statements and
schedules, related notes, other financial and accounting data and statistical data derived from
financial data or accounting data contained or incorporated by reference therein, as to which we
express no opinion), comply as to form in all material respects with the applicable requirements of
the Act and the rules and regulations thereunder.
***********************
In connection with the preparation of the Registration Statement and the Prospectus, we have
participated in conferences with officers and other representatives of the Company and with its
independent registered public accounting firm, as well as with representatives of the Underwriters
and their counsel. At such conferences, the contents of the Registration Statement and the
Prospectus and related matters were discussed. We participated on only a limited basis in the
preparation of the reports filed by the Company with the Commission that are incorporated by
reference in the Registration Statement (the “Exchange Act Reports”), but during the course of the
preparation of the Registration Statement and Prospectus we reviewed the Exchange Act Reports and
participated in conferences with you and your counsel and with officers and other representatives
of the Company at which the contents of the Exchange Act Reports were discussed. We have not
independently verified, and accordingly are not confirming and assume no responsibility for, the
accuracy, completeness or fairness of the statements contained in the Registration Statement or the
Prospectus, except to the extent otherwise stated herein. On the basis of the foregoing, no facts
have come to our attention that have caused us to believe that: (i)
as of its effective date, the
Registration Statement or any further amendment thereto made by the Company prior to the date
hereof (including the Exchange Act documents incorporated by reference therein) 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; (ii) as of its date, the Prospectus
(including the Exchange Act documents incorporated by reference therein) contained an untrue
statement of a material fact or omitted to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not misleading; (iii) as of
the date hereof, the Registration Statement contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein not misleading; or (iv) as
of the date hereof, the Prospectus contains an untrue statement of a material fact or omits to
state a material fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that we express no opinion with respect to the
financial statements and schedules, related notes, other financial and accounting data and
statistical data derived from financial data or accounting data contained or incorporated by
reference in the Registration Statement or the Prospectus.
ANNEX I(b)
Form of Opinion of Fulbright & ▇▇▇▇▇▇▇▇ L.L.P.
| (1) | IP Counsel (a) represents the Company in matters relating to intellectual property, including patents, (b) is familiar with the technology for which patents have been sought by or licensed to the Company for use in its business and the manner of such use, and (c) has read the IP Portions. |
| (2) | To the best of IP Counsel’s knowledge, the statements in the IP Portions are true, correct and complete statements or summaries. |
| (3) | IP Counsel has reviewed the Company’s patents and patent applications filed in the U.S. and foreign counterparts thereto and other patents and patent applications designated by the Company, including U.S. and English-language foreign counterparts thereto licensed to the Company (collectively, the “Patents”), which Patents are described in the IP Portions. The Patents owned by the Company, in IP Counsel’s opinion, have been properly prepared and filed on behalf of the Company and are being diligently prosecuted by the Company. To the best of IP Counsel’s knowledge, and limited by the extent of IP Counsel’s review, the reviewed Patents licensed to the Company have been properly prepared and filed and are being diligently prosecuted by the licensor. To the best of IP Counsel’s knowledge, the inventions described in the Patents are assigned or licensed to the Company. To the best of IP Counsel’s knowledge, no other entity or individual has any right or claim in any of the Company’s rights to Patents other than as described in the IP Portions. In IP Counsel’s opinion, each of the Patents owned by the Company discloses patentable subject matter. In IP Counsel’s opinion, and limited by the extent of IP Counsel’s review, each of the Patents licensed to the Company discloses patentable subject matter. |
| (4) | To the best of IP Counsel’s knowledge, there are no pending legal, governmental or administrative agency proceedings relating to Patents, nor are there any such proceedings being threatened by such agencies or others. |
| (5) | To the best of IP Counsel’s knowledge, the Company is the licensee of, or is listed in the records of the appropriate Patent Office(s) as the owner of record of, the Patents that the Company represents that it licenses or owns. For inventions that are the subject of non-provisional applications and issued patents that the Company represents that it solely owns, the Company has obtained an assignment of all right, title and interest from all named inventors. |
| (6) | During the course of our work for the Company, no information has come to the attention of IP Counsel that causes IP Counsel to believe that the Company is infringing or otherwise violating any patents rights of others, nor has any information come to the attention of IP Counsel regarding patent rights of others that causes IP Counsel to believe that the Company will infringe or otherwise |
| violate such patent rights in conducting its business as described in the Prospectus. |
| (7) | The Company owns or possesses rights to its issued patents and the issued patents licensed to the Company for the purpose of excluding others from conducting the business now being proposed to be conducted by the Company as described in the Prospectus. To IP Counsel’s knowledge, and other than as set forth in the IP Portions, no third party, including any academic or governmental organization, possesses rights to the Company’s patents, patent applications or patent rights. |
| (8) | IP Counsel has no reason to believe that the information in the IP Portions, at the time the Registration Statement became effective, contained any untrue statement of fact or omitted to state any fact necessary to make the statements therein not misleading or that, at the Closing Date, the information in the IP Portions contained any untrue statement of fact or omits to state a fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. |
ANNEX I(c)
Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇ LLP
(1) The statements under the captions “Risk Factors — Risks Related to Our Business — We may
experience delays in our clinical trials that could adversely affect our financial position and our
commercial prospects”; “Risk Factors — Risks Related to Our Business — Adverse events in our
clinical trials may force us to stop development of our product candidates or prevent regulatory
approval of our product candidates”; “Risk Factors — Risks Related to Our Business — Our
applications for regulatory approval could be delayed or denied due to problems with studies
conducted before we in-licensed our product candidates”; “Risk Factors — Risks Related to Our
Business — If our product candidates do not meet safety or efficacy endpoints in clinical
evaluations, they will not receive regulatory approval and we will be unable to market them”;
“Risk Factors — Risks Related to Our Business — Even if our products meet safety and efficacy
endpoints in clinical trials, regulatory authorities may not approve them or we may face
post-approval problems that require withdrawal of our products from the market”; “Risk Factors —
Risk Related to Our Business — If approved, our products may be subject to significant
restrictions or we may be subject to stringent post-marketing commitments that could affect our
ability to market our products”; “Risk Factors — Risks Related to Our Business — Our third-party
manufacturers and their manufacturing facilities and processes are subject to regulatory review,
which may delay or disrupt our development and commercialization efforts”; “Risk Factors — Risks
Related to Our Business — Even if we receive regulatory approval for our product candidates, we
will be subject to ongoing regulatory obligations and review”; “Risk Factors —Risks Related to Our
Business —ERAs, including ambrisentan and darusentan, have demonstrated toxicity in animals”;
“Risk Factors — Risks Related to Our Business — Since we rely on third-party manufacturers, we
may be unable to control the availability of producing our products”; “Risk Factors —Risks Related
to Our Business — Due to our reliance on contract research organizations and other third parties
to conduct clinical trials, we are unable to directly control the timing, conduct and expense of
our clinical trials”; “Risk Factors — Risks Related to Our Industry — Health care reform measures
could adversely affect our business”; “Risk Factors — Risks Related to Our Industry — Failure to
obtain regulatory approval in international jurisdictions would prevent us from marketing our
products abroad”; “Risk Factors — Risks Related to Our Industry — Ambrisentan’s orphan drug
designation may be challenged by competitors or withdrawn by the FDA or the EMEA”; and “Business —
Governmental Regulation and Product Approval” in the Prospectus, insofar as such statements
constitute a summary of documents referred to therein, or matters of law, are accurate and complete
summaries and fairly and correctly present, in all material respects, the information called for
with respect to such documents and matters and all claims in such statements relating to the status
of human drugs and drug product candidates regulated by the FDA;
(2) To our knowledge, there is no investigation, warning letter, lawsuit or other material
regulatory action by FDA or by the Department of Health and Human Services Office of Inspector
General pending or threatened against the Company;
(3) No facts have come to our attention that cause us to believe that the portions of the
Prospectus under the captions referred to in paragraph one above, as of the effective date of the
Registration Statement, contained any 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, solely with respect to the statements under the
captions set forth in paragraph one hereof, contained any untrue statement of a material fact or
omitted to state any material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made;
(4) The statements in the Prospectus summarizing statutes, rules and regulations, solely with
respect to the statements under the captions set forth in paragraph one hereof, are accurate and
complete and fairly and correctly present the information required to be presented by the 1933 Act
or the rules and regulations thereunder, in all material respects and we do not know of any
statutes, rules and regulations required to be described or referred to in the Prospectus, solely
with respect to the matters addressed under the captions set forth in paragraph one hereof, that
are not described or referred to therein as required; and
(5) To our knowledge, there are no legal or governmental proceedings pending or threatened
required to be described in the Prospectus, solely with respect to the statements under the
captions set forth in paragraph one hereof, which are not described as required, nor any contracts
or documents, solely with respect to the statements under the captions set forth in paragraph one
hereof, of a character required to be described in the Prospectus which are not described or filed,
as required.
ANNEX I(d)
Form of Opinion of ▇▇▇▇▇-▇▇▇▇▇▇ v.Danwitz Privat
| 1. | The GmbH has been duly incorporated and organized and is validly existing as a corporation or limited liability company (Gesellschaft mit beschränkter Haftung) with power and authority (corporate and other) to own or hold its properties and to conduct its business as described in the Prospectus. |
| 2. | The authorized capital stock of the GmbH consists of one (1) share (Geschäftsanteil) in the nominal value of 25,000.00 EUR (Euros, the lawful currency of Germany), held by the Company as sole shareholder of the GmbH. Said share has been duly and validly authorized and issued, and is fully paid and non-assessable, and (except as otherwise set forth in the Prospectus) is owned directly by the Company. By agreement dated December @, 2002, and recorded by ▇▇. ▇▇▇▇▇ ▇▇▇▇, Notary Public with official seat in Bonn, Germany, said share was pledged to GATX Ventures, Inc., of @, California, U.S.A., and the Silicon Valley Bank, of @, California, U.S.A. To the best of our knowledge, the share is otherwise free and clear of all liens, encumbrances, equities or claims. |
| 3. | To the best of our knowledge and other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the GmbH is a party or of which any property of the GmbH is the subject which, if determined adversely to the GmbH, would individually or in the aggregate have a Material Adverse Effect; and, to the best of our knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; |
| 4. | The GmbH is not and, after the execution, delivery and performance by the Company of the Agreement and the issuance and sale of the shares being delivered on the Time of Delivery, will not be in violation of its Articles of Association or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound or material statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the GmbH or any of its properties; |
ANNEX II
Pursuant to Section 7(h) of the Underwriting Agreement, the accountants shall furnish
letters to the Underwriters to the effect that:
(a) They are an independent registered public accounting firm with respect to the Company and
the Subsidiary within the meaning of the Act and the applicable rules and regulations thereunder
adopted by the Commission.
(b) In their opinion, the financial statements and any supplementary financial information
and schedules (and, if applicable, financial forecasts and/or pro forma financial information)
examined by them and included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable accounting requirements
of the Act or the Exchange Act, as applicable, and the related rules and regulations thereunder
adopted by the Commission; and, if applicable, they have made a review in accordance with standards
established by the Public Company Accounting Oversight Board of the consolidated interim financial
statements, selected financial data, pro forma financial information, financial forecasts and/or
condensed financial statements derived from audited financial statements of the Company for the
periods specified in such letter, as indicated in their reports thereon, copies of which have been
furnished to ▇▇▇▇▇▇▇, Sachs & Co.;
(c) They have made a review in accordance with standards established by the Public Company
Accounting Oversight Board of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows included in the Prospectus
and/or included in the Company’s quarterly report on Form 10-Q incorporated by reference into the
Prospectus as indicated in their reports thereon copies of which [have been separately furnished to
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.][are attached hereto]; and on the basis of specified procedures including
inquiries of officials of the Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in the related in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and the related rules and
regulations adopted by the Commission, nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the Act and the Exchange Act and
the related rules and regulations adopted by the Commission;
(d) The unaudited selected financial information with respect to the consolidated results of
operations and financial position of the Company for the five most recent fiscal years included in
the Prospectus and included or incorporated by reference in Item 6 of the Company’s Annual Report
on Form 10-K for the most recent fiscal year agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial statements for such five fiscal
years which were included or incorporated by reference in the Company’s Annual Reports on Form 10-K
for such fiscal years;
(e) They have compared the information in the Prospectus under selected captions with the
disclosure requirements of Regulation S-K and on the basis of limited procedures specified in such
letter nothing came to their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation S-K;
(f) On the basis of limited procedures, not constituting an examination in accordance with
generally accepted auditing standards, consisting of a reading of the unaudited financial
statements and other information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention that caused them to
believe that:
(A) (i) the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the Prospectus
and/or included or incorporated by reference in the Company’s Quarterly Report on
Form 10-Q incorporated by reference in the Prospectus do not comply as to form in
all material respects with the applicable accounting requirements of the Exchange
Act and the related rules and regulations adopted by the Commission, or (ii) any
material modifications should be made to the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included in the Company’s Quarterly Report
on Form 10-Q incorporated by reference in the Prospectus, for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet items included
in the Prospectus do not agree with the corresponding items in the unaudited
consolidated financial statements from which such data and items were derived, and
any such unaudited data and items were not determined on a basis substantially
consistent with the basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the Company’s Annual
Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial statements
referred to in clause (A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in clause (B) were not determined
on a basis substantially consistent with the basis for the audited financial
statements included or incorporated by reference in the Company’s Annual Report on
Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial statements
included or incorporated by reference in the Prospectus do not comply as to
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form in
all material respects with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma adjustments have not
been properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than three days prior to the date of such
letter, there have been any changes in the consolidated capital stock (other than
issuances of capital stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of convertible securities,
in each case which were outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases in consolidated
net current assets or stockholders’ equity or other items specified by ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Co., or any increases in any items specified by ▇▇▇▇▇▇▇, Sachs & Co., in
each case as compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(F) for the period from the date of the latest financial statements included or
incorporated by reference in the Prospectus to the specified date referred to in
clause (E) there were any decreases in consolidated net revenues or operating profit
or the total or per share amounts of consolidated net income or other items
specified by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., or any increases in any items specified by
▇▇▇▇▇▇▇, Sachs & Co., in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length specified by
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in such
letter; and
(g) In addition to the examination referred to in their report(s) included or incorporated
by reference in the Prospectus and the limited procedures, inspection of minute books, inquiries
and other procedures referred to in paragraphs (iii) and (vi) above, they have carried out certain
specified procedures, not constituting an examination in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and financial information
specified by ▇▇▇▇▇▇▇, Sachs & Co. which are derived from the general accounting records of the
Company and its subsidiaries, which appear in the Prospectus (excluding documents incorporated by
reference) or in Part II of, or in exhibits and schedules to, the Registration Statement specified
by ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. or in documents incorporated by reference in the Prospectus specified by
▇▇▇▇▇▇▇, Sachs & Co., and have compared certain of such amounts, percentages and financial
information with the accounting records of the Company and its subsidiaries and have found them to
be in agreement.
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