EXHIBIT 1.1
DEALER MANAGER AGREEMENT
November 26, 2002
U.S. BANCORP XXXXX XXXXXXX, INC.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Ladies/Gentlemen:
1. General. Alkermes, Inc., a Pennsylvania corporation (the "Company"),
proposes to offer to exchange $200,000,000 aggregate principal amount of its
outstanding 3.75% Convertible Subordinated Existing Notes due 2007 (the
"Existing Notes") that are convertible into common stock, par value $0.01 per
share, (the "Shares") of the Company for $115,000,000 aggregate principal amount
of 6.52% Convertible Senior Subordinated Notes due December 31, 2009 (the "New
Notes"). The New Notes issued in the Exchange Offer are to be issued pursuant to
an Indenture, dated as of December __ 2002, as amended or modified from time to
time (the "Indenture"), between the Company and State Street Bank and Trust
Company, as Trustee (the "Trustee"). Capitalized terms used herein without
definition shall have their respective meanings set forth in or pursuant to the
Exchange Offer Materials (as defined herein).
2. Engagement as Dealer Manager. By this Dealer Manager Agreement (the
"Agreement"), the Company hereby engages and appoints you as the exclusive
Dealer Manager for the Exchange Offer and authorizes you to act as such in
connection with the Exchange Offer.
As Dealer Manager you agree, in accordance with your customary practice,
to use reasonable efforts to perform in connection with the Exchange Offer those
services as are customarily performed by investment banking concerns in
connection with similar offers, including, without limitation, soliciting from
individuals and institutions the tender of the Existing Notes pursuant to and in
accordance with the terms and conditions of the Exchange Offer. You shall act as
an independent contractor in connection with the Exchange Offer with duties
solely to the Company, and nothing herein contained shall constitute you as an
agent of the Company in connection with the solicitation of the tender of
Existing Notes pursuant to and in accordance with the terms and conditions of
the Exchange Offer; provided, however, that the Company hereby authorizes the
Dealer Manager and/or one or more registered brokers or dealers chosen by the
Dealer Manager, to act as the Company's agent in making the Exchange Offer to
residents of any jurisdiction in which such agent designation may be necessary
to comply with applicable law. Nothing in this Agreement shall constitute the
Dealer Manager a partner or joint venturer with the Company or any of its
subsidiaries. On the basis of the representations and warranties and agreements
of the Company contained herein and subject to and in accordance with the terms
and conditions hereof and of the Exchange Offer, the Dealer Manager agrees to
act in such capacity.
3. Registration Statement, Prospectus and Offering Materials.
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission"), under the Securities Act of 1933, as
amended (the "Securities Act"), the Trust Indenture Act of 1939, as amended (the
"TIA"), and applicable rules and regulations (the "Rules and Regulations") of
the Commission under the Securities Act, the TIA and the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), a registration statement on Form S-4
(File No. 333-101059), including a Prospectus, covering the registration of the
offer and sale of the New Notes in the Exchange Offer; the Shares issuable upon
conversion of the New Notes issued in the Exchange Offer; and the Shares that
may be issued solely at the Company's option as payment of interest on the New
Notes issued in the Exchange Offer. The term "Registration Statement" as used in
this Agreement shall mean such registration statement, including financial
statements, schedules and exhibits, in the form in which it becomes effective
and, in the event of any amendment thereto or the filing of any abbreviated
registration statement pursuant to Rule 462(b) of the Rules and Regulations
relating thereto after the effective date of such registration statement, shall
also mean (from and after the effectiveness of such amendment or the filing of
such abbreviated registration statement) such registration statement as so
amended, together with any such abbreviated registration statement. The term
"Prospectus" as used in this Agreement shall mean the final prospectus included
in the Registration Statement. Notwithstanding the foregoing, if any revised
Prospectus shall be provided to you by the Company for use in connection with
the Exchange Offer that differs from the Prospectus referred to in the
immediately preceding sentence (whether or not such revised Prospectus is
required to be filed with the Commission pursuant to Rule 424(b) of the Rules
and Regulations), the term "Prospectus" shall refer to such revised Prospectus
from and after the time it is first provided to you for such use.
(b) The Company has prepared and filed, or agrees that prior to or
on the date of commencement of the Exchange Offer (the "Commencement Date") it
will file, with the Commission under the Exchange Act and the Rules and
Regulations of the Commission promulgated thereunder a Statement on Schedule TO
with respect to the Exchange Offer, including the exhibits thereto. The term
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"Schedule TO" as used in this Agreement shall mean such Schedule TO, including
any amendment or supplement thereto.
(c) The Registration Statement, Prospectus, Schedule TO, the related
letters from the Dealer Manager to securities brokers, dealers, commercial
banks, trust companies and other nominees that have been approved for use by the
Company, which approval shall not be unreasonably withheld, letters to
beneficial owners of Existing Notes, the Letter of Transmittal and any newspaper
announcements, if any, press releases and other exchange offer solicitation
materials and information the Company may prepare, approve, publicly
disseminate, provide to registered or beneficial holders of Existing Notes or
authorize for public dissemination or use by registered or beneficial holders of
Existing Notes in connection with the Exchange Offer, are collectively referred
to as the "Exchange Offer Materials."
4. Use of Exchange Offer Materials.
(a) The Exchange Offer Materials have been or will be prepared and
approved by, and are the sole responsibility of, the Company. The Company shall
disseminate or, to the extent permitted by law use its best efforts to
disseminate, the Exchange Offer Materials to each registered Holder of any
Existing Notes, as soon as is practicable on the Commencement Date, pursuant to
Rule 13e-4 under the Exchange Act, and comply with its obligations thereunder.
Thereafter, to the extent practicable, until three days prior to the expiration
date of the Exchange Offer (the "Expiration Date"), the Company shall use its
best efforts to cause copies of such Exchange Offer Materials and a return
envelope to be mailed to each person who becomes a Holder of record of any
Existing Notes. The Company acknowledges and agrees that you may use the
Exchange Offer Materials, as specified herein without assuming any
responsibility for independent verification on your part other than information
about the Dealer Manager supplied by you in writing; and the Company represents
and warrants to you that you may rely on the accuracy and completeness of any
information delivered to you by or on behalf of the Company without assuming any
responsibility for independent verification of such information and without
performing or receiving any appraisal or evaluation of the assets or liabilities
of the Company.
(b) The Company agrees to provide you with as many copies as you may
reasonably request of the Exchange Offer Materials. The Company agrees that
within a reasonable time prior to using or filing with the Commission or any
governmental or regulatory entity or agency (an "Other Agency"), including the
National Association of Securities Dealers, Inc. (the "NASD"), of any Exchange
Offer Materials, it will submit copies of such materials to you and your counsel
and will give reasonable consideration to your and your counsel's comments, if
any, thereon. The Company agrees prior to the termination of the Exchange Offer,
before amending or supplementing the Registration Statement or the Prospectus,
to furnish copies of drafts to, and consult with, you and your counsel within a
reasonable time in advance of filing with the Commission of any amendment or
supplement to the Registration Statement, the Prospectus or the other Exchange
Offer Materials and will give reasonable consideration to your and your
counsel's comments, if any, thereon.
(c) The Company has furnished or shall use its best efforts to
furnish to you, or cause the transfer agents or registrars for the Existing
Notes to furnish to you, as soon as
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practicable after the date hereof (to the extent not previously furnished),
cards or lists in reasonable quantities or copies thereof showing the names of
persons who were the holders of record or, to the extent available, the
beneficial owners of the Existing Notes as of a recent date, together with their
addresses and the aggregate principal amount at maturity of the Existing Notes
held by them. Additionally, the Company shall update, or cause the transfer
agents or registrars referred to above to update, such information from time to
time during the term of this Agreement as may be reasonably requested by you.
Except as otherwise provided herein, you agree to use such information only in
connection with the Exchange Offer and in connection with the offer of
additional New Notes for cash (the "Cash Offer") pursuant to the terms of a
placement agreement, dated as of the date hereof, between the Company and U.S.
Bancorp Xxxxx Xxxxxxx, Inc.
(d) The Company authorizes the Dealer Manager to use the Exchange
Offer Materials in connection with the Exchange Offer for such period of time as
any such materials are required by law to be delivered in connection therewith.
The Dealer Manager shall not have any obligation to cause any Exchange Offer
Materials to be transmitted generally to the holders of Existing Notes.
(e) The Company authorizes the Dealer Manager to communicate with
the information agent identified in the Prospectus (the "Information Agent") or
the exchange agent identified in the Prospectus (the "Exchange Agent") appointed
by the Company to act in such capacity in connection with the Exchange Offer.
The Company will arrange for the Information Agent and/or Exchange Agent to
advise you, as necessary and at least daily, as to such matters relating to the
Exchange Offer as you may reasonably request.
(f) The Company agrees that any reference to the Dealer Manager in
any Exchange Offer Materials or in any newspaper announcement or press release
or other document or communication is subject to the Dealer Manager's prior
consent, which consent shall not be unreasonably withheld.
5. Withdrawal. In the event that the Company: (i) uses or permits the use
of, or files with the Commission or any Other Agency, any Exchange Offer
Materials or any amendment or supplement to the Registration Statement or the
Prospectus, and such document (a) has not been submitted to you previously for
your and your counsel's comments; or (b) has been so submitted, and you or your
counsel have made comments which have not been reflected in a manner reasonably
satisfactory to you or your counsel; (ii) breaches, in any material respect, any
of its representations, warranties, agreements or covenants herein; or (iii)
amends or revises the Exchange Offer in a manner not reasonably acceptable to
you, then you shall be entitled to withdraw as Dealer Manager in connection with
the Exchange Offer without any liability or penalty to you and without loss of
any right to indemnification or contribution provided in Section 11 or to the
payment of all fees and expenses payable under Sections 6 and 7 below which have
accrued to the date of such withdrawal (it being agreed that in the event of any
such withdrawal, for the purpose of determining the fees payable to you pursuant
to Section 6, the aggregate principal amount of Existing Notes tendered pursuant
to the Exchange Offer as of the close of business on the date of such withdrawal
that are thereafter acquired by the Company or
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any of its subsidiaries or affiliates pursuant to the Exchange Offer or
otherwise shall be deemed to have been acquired as of the date of such
withdrawal).
6. Fees. As compensation for your services in connection with the Exchange
Offer, the Company will pay you a graduated fee determined in accordance with
the fee schedule set forth below as of the Expiration Date with regard to the
Existing Notes validly tendered and accepted for exchange pursuant to the
Exchange Offer:
Aggregate Principal Amount
of Existing Notes
Exchanged (in millions) Graduated Fee Maximum Cumulative Fee
----------------------- ------------- ----------------------
$0.00- $45.0 0.70% $320,000
$45.001-$90.0 0.80% $670,000
$90.001-$135.0 0.90% $1,080,000
$135.001-$180.0 1.00% $1,530,000
$180.001-$200.0 0.00% $1,530,000
The total fee due and payable by the Company on the date when the Exchange Offer
is consummated (the "Closing Date") will be paid in cash in accordance with the
fee table above.
7. Expenses. The Company agrees that it will pay the costs and expenses
incident to the performance of the obligations hereunder whether or not any New
Notes are issued in exchange for Existing Notes in the Exchange Offer,
including, without limitation (i) all costs and expenses incurred by dealers and
brokers (including yourself), commercial banks, trust companies and nominees for
their customary mailing and handling expenses incurred in forwarding the
Exchange Offer Materials to their customers, (ii) the filing fees and expenses,
if any, incurred with respect to any filing with The Nasdaq National Market
("Nasdaq"), (iii) all costs and expenses incident to the preparation, issuance,
execution and delivery of the New Notes upon exchange of the Existing Notes,
(iv) all costs and expenses incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and the Prospectus
(including, without limitation, in each case all exhibits, amendments and
supplements thereto), (v) all costs and expenses incurred in connection with the
registration or qualification of the New Notes issuable upon exchange of the
Existing Notes under the laws of such jurisdictions as the Dealer Manager may
designate, if any (including, without limitation, reasonable fees of counsel for
the Dealer Manager and its reasonable disbursements), (vi) all costs and
expenses incurred in connection with the printing (including word processing and
duplication costs) and delivery of all Exchange Offer Materials (including,
without limitation, any preliminary and supplemental Blue Sky memoranda)
including, without limitation, mailing and shipping, (vii) all advertising
expenses related to the Exchange Offer and the fees and expenses of the Exchange
Agent and the
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Information Agent, (viii) all fees and expenses incurred in marketing the
Exchange Offer, including but not limited to road show presentations, if any,
and (ix) the fees and disbursements of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP,
counsel to the Company, and Deloitte & Touche LLP, auditors to the Company. In
addition, the Company agrees to reimburse the reasonable out-of-pocket expenses
of the Dealer Manager in connection with the Exchange Offer, including without
limitation, reasonable legal fees and expenses of your counsel in connection
with the Exchange Offer.
8. Representations, Warranties and Agreements of the Company. The Company
represents and warrants to you, and agrees with you, that:
(a) The Registration Statement, including the Prospectus, has been
prepared by the Company in conformity with the requirements of the Securities
Act and the Rules and Regulations thereunder and has been filed with the
Commission; such amendments to such Registration Statement and Prospectus and
such abbreviated registration statements pursuant to Rule 462(b) of the Rules
and Regulations as may have been required prior to the date hereof have been
similarly prepared and filed with the Commission; and the Company will file such
additional amendments to such Registration Statement and Prospectus and such
abbreviated registration statements as may hereafter be required. Copies of such
Registration Statement and Prospectus, including all amendments thereto and of
any abbreviated registration statement pursuant to Rule 462(b) of the Rules and
Regulations have been or, if filed after the Commencement Date, will be,
delivered or made available to you and your counsel.
(b) The Schedule TO has been prepared by the Company in conformity
with the requirements of the Exchange Act and the Rules and Regulations of the
Commission thereunder and has been filed with the Commission; such amendments to
such Schedule TO as may have been required prior to the date hereof have been
similarly prepared and filed with the Commission; and the Company will file such
additional amendments to such Schedule TO as may hereafter be required. Copies
of such Schedule TO, including all amendments thereto and all documents
incorporated by reference therein have been or, if filed after the Commencement
Date will be, delivered made available to you and your counsel.
(c) The Registration Statement, including the Prospectus, has been
filed as of the Commencement Date and will become effective not later than the
Expiration Date; and the Commission has not issued any order refusing or
suspending the effectiveness of the Registration Statement or preventing or
suspending the use of any Prospectus or instituted proceedings for that purpose.
The Exchange Offer Materials, including the Registration Statement, the Schedule
TO and the Prospectus, comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act, the Exchange Act
and the TIA, and the applicable Rules and Regulations of the Commission
thereunder. The Registration Statement, when it becomes effective, will not
contain and, as amended or supplemented, if applicable, will not contain, any
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.
Neither the Prospectus nor the other Exchange Offer Materials contain, and, as
amended or supplemented, if applicable, will contain, any untrue statement of a
material fact or omit to state a material fact necessary to
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make the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that none of the representations
and warranties contained in this subparagraph (c) shall apply to information
contained in or omitted from the Exchange Offer Materials or the Registration
Statement or Prospectus, or any amendment or supplement thereto, in reliance
upon, and in conformity with, written information relating to you furnished to
the Company by you specifically for use in the preparation thereof.
(d) Subsequent to the respective dates as of which information is
given in the Prospectus: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse
change, in the condition, financial or otherwise, or in the earnings, business,
operations or prospects, whether or not arising from transactions in the
ordinary course of business, of the Company and its subsidiaries, considered as
one entity, or any change which would adversely affect the power and ability of
the Company to perform its obligations under this Agreement, the Indenture, or
the New Notes (any such change or effect, where the context so requires, is
called a "Material Adverse Change" or a "Material Adverse Effect"); (ii) the
Company and its subsidiaries, considered as one entity, have not incurred any
material liability or obligation, indirect, direct or contingent, not in the
ordinary course of business nor entered into any material transaction or
agreement not in the ordinary course of business; and (iii) there has been no
dividend or distribution of any kind declared, paid or made by the Company or,
except for dividends paid to the Company or other subsidiaries, by any of its
subsidiaries on any class of capital stock or no repurchase or redemption by the
Company or any of its subsidiaries of any class of capital stock.
(e) The Company has been duly incorporated and is validly subsisting
as a corporation under the laws of the jurisdiction of its incorporation with
full power and authority (corporate and other) to own, lease and 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 in each jurisdiction in which the ownership or leasing of its
properties or the conduct of its business requires such qualification, except
where the failure to be so qualified or be in good standing would not have a
Material Adverse Effect.
(f) The Company does not own or control, directly or indirectly, any
corporation, association or other entity other than the subsidiaries listed in
Exhibit 21 to the Registration Statement, except for Alkermes Acquisition Corp.,
a Delaware corporation, Alkermes Clinical Partners, L.P., a Delaware limited
partnership, New Alkermes, Inc., a Pennsylvania corporation, Xxxxx
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Acquisition Sub, Inc., a Pennsylvania corporation, Revere Acquisition Sub, LLC,
a Delaware limited liability company, and Versant Acquisition LLC, a Delaware
limited liability company.
(g) Each of the Company's subsidiaries has been duly organized and
is validly existing or subsisting as a corporation in good standing under the
laws of the jurisdiction in which it was organized (except Alkermes Europe, Ltd.
or the corporations organized on the Commonwealth of Pennsylvania); has the
corporate power to own, lease and operate its properties and conduct its
business as described in the Prospectus; is qualified to do business as a
foreign corporation and is in good standing in each jurisdiction, if any, in
which the ownership and leasing of its properties or the conduct of its business
requires such qualification, except where the failure to be so qualified or be
in good standing would not have a Material Adverse Effect.
(h) As of November 15, 2002, Alkermes Europe, Ltd. ceased all
operations, currently has no employees, and has no significant liabilities,
contingent or otherwise that would have a Material Adverse Effect.
(i) All of the issued and outstanding shares of capital stock of
each of the subsidiaries have been duly authorized and validly issued and are
fully paid and nonassessable, and, except as disclosed in the Registration
Statement, Prospectus and Exchange Offer Materials, are owned by the Company
directly or through wholly-owned subsidiaries (except for directors' qualifying
shares), free and clear of any lien, security interest, encumbrance or claim.
(j) No subsidiary of the Company is currently prohibited, directly
or indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company.
(k) The Company has full legal right, power and authority to enter
into and perform its obligations under this Agreement, the Indenture and the New
Notes and to consummate the Exchange Offer and all other transactions
contemplated in the Exchange Offer Materials. The Exchange Offer and all other
actions by the Company contemplated in the Exchange Offer Materials have been
duly and validly authorized by all necessary corporate action by the Company,
and except for authorization of final terms of the New Notes by the Pricing
Committee of the Board of Directors, no other corporate proceedings by the
Company are necessary to authorize such actions. This Agreement has been duly
authorized, executed and delivered by the Company and is a legal, valid and
binding agreement on the part of the Company, enforceable in accordance with its
terms, except as rights to indemnification hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or by general equitable
principles. The execution and delivery by the Company of, and the performance by
the Company of its obligations under this Agreement, the issuance and delivery
by the Company of the New Notes pursuant to the Exchange Offer, the consummation
of the Exchange Offer, and the other transactions contemplated in the Exchange
Offer Materials, and the fulfillment of the terms hereof and
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thereof, do not and will not result in a breach or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, (i) the charter or by-laws of the Company or any of
its subsidiaries, (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which the Company or any of its
subsidiaries is a party or is bound or to which its or their property is
subject; provided, however, that the Company must obtain the consent of Fleet
National Bank under existing bank loans prior to consummation of the Exchange
Offer, or (iii) to the best knowledge of the Company, any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency, governmental
body, arbitrator or other authority having jurisdiction over the Company or any
of its subsidiaries or any of its or their properties; except where any breach,
violation, or default described in (i), (ii) or (iii) would not singly or in the
aggregate have a Material Adverse Effect. No consent, approval, authorization,
filing with or order of any court, or governmental agency or regulatory body, is
required in connection with the transactions contemplated by this Agreement, the
Indenture, the issuance and delivery of the New Notes pursuant to the Exchange
Offer, and the consummation by the Company or any of its subsidiaries of the
transactions contemplated herein or in the Exchange Offer Materials, except such
as may be required under the Securities Act, the Exchange Act, the TIA or under
state or other securities, or Blue Sky laws, all of which requirements have been
satisfied other than as contemplated by such agreements or except where such
requirement would not have a material adverse effect on the execution and
delivery of this Agreement, the Indenture, the issuance of the New Notes or the
consummation of the transactions contemplated herein or in the Exchange Offer
Materials.
(l) Except as disclosed in the Prospectus, there is not any action,
suit or proceeding by or before any court or governmental agency, authority or
body or any arbitrator involving the Company or any of its subsidiaries or its
or their property that is pending or, to the best knowledge of the Company,
threatened that (i) could reasonably be expected to have a Material Adverse
Effect on the consummation of the Exchange Offer, the transactions contemplated
hereby or thereby or the other transactions contemplated in the Exchange Offer
Materials that has not been accurately described in all material respects in the
Registration Statement or the Prospectus, or (ii) could reasonably be expected
to result in a Material Adverse Change.
(m) To the best of the Company's knowledge, after due inquiry, the
Company is not in violation of any domestic or foreign law, ordinance,
administrative or governmental rule or regulation (including without limitation,
those of the United States Food and Drug Administration (the "FDA") and any
corresponding foreign agencies) or court decree applicable to it, is not in
violation of any term or condition of, and has not failed to obtain, any
license, claim, permit, franchise or other administrative or governmental
authorization necessary, whether domestic or foreign, from any regulatory body
or administrative agency or other governmental body having jurisdiction over it
(including without limitation, the FDA and any corresponding foreign agencies)
to the ownership or lease of its properties and assets or to the conduct of its
business as it is presently conducted, which violation, or failure to obtain
would, individually or in the aggregate, have a Material Adverse Effect, or
which might, if determined adversely to the Company, materially and adversely
affect the execution, delivery or performance by the
9
Company of this Agreement. All such licenses, claims, permits, franchises or
other administrative or governmental authorizations which are so required are,
and on the Closing Date will be, valid and subsisting and in good standing.
(n) There are no agreements, contracts, leases or documents of the
Company or any of its subsidiaries of a character required to be described or
referred to in the Registration Statement or the Prospectus or to be filed as an
exhibit to the Registration Statement by the Securities Act or the Rules and
Regulations thereunder or by the Exchange Act or the Rules and Regulations of
the Commission thereunder which have not been accurately described in all
material respects in the Registration Statement or Prospectus or filed as
exhibits to the Registration Statement.
(o) The authorized and outstanding capital stock of the Company is
as set forth in the Prospectus under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to employee benefit plans described in
the Prospectus or upon exercise of outstanding options described in the
Prospectus) and conforms in all material respects to the statements relating
thereto contained in the Registration Statement and the Prospectus (and such
statements correctly state the substance of the instruments defining the
capitalization of the Company); a sufficient number of Shares to be issuable
pursuant to the terms of the New Notes have been duly authorized for issuance
and delivery and, when issued and delivered by the Company in accordance with
the terms of the New Notes will be duly and validly issued and fully paid and
nonassessable, and will be free and clear of any pledge, lien, security
interest, encumbrance, claim or equitable interest; and no preemptive right,
co-sale right, registration right, right of first refusal or other similar right
of shareholders exists with respect to any of the Shares issuable pursuant to
the terms of the New Notes to be issued in the Exchange Offer or the issuance
thereof other than those that have been expressly waived prior to the date
hereof and those that will automatically expire upon and will not apply to the
consummation of the transactions contemplated on or before the Closing Date. No
further approval or authorization of any shareholder, the Board of Directors of
the Company (except for authorization of final terms of the New Notes by the
Pricing Committee of the Board of Directors) or others is required for the
issuance or transfer of the Shares issuable pursuant to the terms of the New
Notes and except as may be required under the Securities Act, the Exchange Act
or under state or other securities or Blue Sky laws.
(p) The Common Stock and the non-voting Common Stock, $0.01 par
value per share of the Company (the "Non-Voting Common Stock") conforms in all
material respects to the description thereof contained in the Prospectus. All of
the issued and outstanding shares of Common Stock and Non-Voting Common Stock
has been duly authorized and validly issued, are fully paid and nonassessable
and have been issued in compliance with federal and state securities laws. None
of the outstanding shares of Common Stock were issued in violation of any
preemptive rights, rights of first refusal or other similar rights to subscribe
for or purchase securities of the Company. None of the outstanding shares of
Non-Voting Common Stock were issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or purchase
securities of the Company. There are no authorized or outstanding
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options, warrants, preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company or any of its subsidiaries
other than those described in the Prospectus. The description of the Company's
stock option, stock bonus and other stock plans or arrangements, and the options
or other rights granted thereunder, set forth in the Prospectus accurately and
fairly presents the information required to be shown with respect to such plans,
arrangements, options and rights.
(q) The Indenture has been or will be duly authorized by the
Company, has been filed as of the Commencement Date, will be qualified under the
TIA not later than the Expiration Date, and assuming due authorization,
execution and delivery of the Indenture by the Trustee, when executed and
delivered by the Company, will constitute a valid and binding agreement of the
Company, enforceable in accordance with its terms, except as the enforcement
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer or other similar laws affecting enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether enforceability is considered in a proceeding at law or in equity).
(r) The New Notes to be issued pursuant to the Exchange Offer have
been authorized, and assuming due authorization, execution and delivery of the
Indenture by the Trustee, when executed and authenticated in accordance with the
provisions of the Indenture and delivered in accordance with the terms of the
Exchange Offer, will be entitled to the benefits of the Indenture and will be
valid and binding obligations of the Company enforceable in accordance with
their terms, except as the enforcement thereof may be limited by the (i)
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other
similar laws affecting enforcement of creditors' rights generally and (ii)
general principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity). The New Notes will conform in all material
respects to the description thereof contained in the Registration Statement and
Prospectus.
(s) The consolidated financial statements (including the related
notes) included in the Registration Statement and the Prospectus (and any
amendments or supplements thereto) present fairly the consolidated financial
position of the Company and of its subsidiaries as of and at the dates indicated
and the results of their operations and cash flows for the periods specified.
Such financial statements have been prepared in conformity with generally
accepted accounting principles applied in the United States on a consistent
basis throughout the periods indicated except as may otherwise be stated
therein. The financial data set forth in the Prospectus under the captions
"Selected Historical Consolidated Financial Data" and "Capitalization" fairly
present the information set forth therein on a basis consistent with that of the
financial statements presented therein. The interim consolidated financial
statements (including the related notes) included in the Registration Statement
and the Prospectus (and any amendments and supplements thereto) have been
prepared on a basis consistent with the audited consolidated financial
statements except as otherwise stated therein, and include all adjustments,
including normal recurring adjustments necessary to present fairly the financial
information therein. No financial statements or schedules, other than the
consolidated financial statements or schedules
11
that are included in the Registration Statement and the Prospectus (and any
amendments or supplements thereto), are required to be included therein.
(t) The Company and each of its subsidiaries maintain a system of
accounting controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles as applied in the United States and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(u) Deloitte & Touche LLP, who have expressed their opinion with
respect to the audited financial statements (which term as used in this
Agreement includes the related notes thereto) included in the Prospectus, are
independent public or certified public accountants with respect to the Company
within the meaning of the Securities Act and the applicable Rules and
Regulations thereunder.
(v) The Company and each of its subsidiaries has good and marketable
title to all the properties and assets reflected as owned in the financial
statements included in the Prospectus, in each case free and clear of any
security interests, mortgages, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the value of
such property, including, without limitation the security interests under the
Company's bank loan with Fleet National Bank and under the Company's equipment
lease financing with General Electric Capital Corporation, and do not
materially interfere with the use made or proposed to be made of such property
by the Company or such subsidiary or disclosed in the Prospectus. The real
property, improvements, equipment and personal property held under lease by the
Company or any subsidiary are held under valid and enforceable leases, with
such exceptions as are not material and do not materially interfere with the
use made or proposed to be made of such real property, improvements, equipment
or personal property by the Company or such subsidiary.
(w) The Company and its subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have paid all
taxes shown thereon as due and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them. The Company has made
adequate charges, accruals and reserves in the applicable financial statements
included in the Prospectus in respect of all federal, state and foreign income
and franchise taxes for all periods as to which the tax liability of the Company
or any of its subsidiaries has not been finally determined. The Company is not
aware of any tax deficiency that has been or might be asserted or threatened
against the Company that could result in a Material Adverse Change.
(x) Each of the Company and its subsidiaries owns or possesses
adequate rights to use all patents, patent rights, inventions, trade secrets,
know-how, trademarks, service marks, trade names and copyrights which are
necessary to conduct its respective business as described in the Prospectus. The
patents, patent rights, trademarks, service marks, trade names
12
or copyrights described in the Prospectus have been maintained except those for
which a lapse would not result in a Material Adverse Change that is not
otherwise disclosed in the Prospectus; the Company has not received any notice
of, and has no knowledge of, any infringement of or conflict with asserted
rights of the Company by others with respect to any valid patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names or
copyrights that is not disclosed in the Prospectus; and the Company has not
received any notice of, and has no knowledge of, any infringement of or conflict
with asserted rights of others with respect to any valid patent, patent rights,
inventions, trade secrets, know-how, trademarks, service marks, trade names or
copyrights which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, might have a Material Adverse Effect that is not
described in the Prospectus. There is no claim being made against the Company
regarding patents, patent rights or licenses, inventions, collaborative
research, trade secrets, know-how, trademarks, service marks, trade names or
copyrights that is not described in the Prospectus. The Company and its
subsidiaries do not in the conduct of their businesses as now or proposed to be
conducted as described in the Prospectus infringe or conflict with any right or
patent of any third party, or any discovery, invention, product or process which
is the subject of a patent application filed by any third party, known to the
Company or any of its subsidiaries, which such infringement or conflict is
reasonably likely to result in a Material Adverse Change that is not described
in the Prospectus.
(y) Except as disclosed in the Registration Statement and
Prospectus, the Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and has been quoted on Nasdaq, and the Company has taken no action
designed to terminate, or likely to have the effect of terminating, the
registration of the Common Stock under the Exchange Act or delisting the Common
Stock from Nasdaq, nor has the Company received any notification that the
Commission or Nasdaq is contemplating terminating such registration or listing.
(z) The Company has been advised of the rules and requirements under
the Investment Company Act of 1940, as amended (the "1940 Act"). The Company is
not required to register as an "investment company" or an entity "controlled" by
an "investment company" within the meaning of the 1940 Act and will conduct its
business in a manner so that it will not become subject to the 1940 Act and the
rules and regulations promulgated thereunder.
(aa) The Company has not distributed and will not distribute prior
to the later of (i) the Closing Date, and (ii) completion of the distribution of
the New Notes in exchange for the Existing Notes pursuant to the Exchange Offer,
any offering material in connection with the Exchange Offer other than the
Exchange Offer Materials.
(bb) The Company has not taken and will not take, directly or
indirectly, any action resulting in a violation of Rule 102 of Regulation M
promulgated under the Exchange Act or designed to or that might reasonably be
expected to cause or result in stabilization or manipulation of the price of the
Common Stock to facilitate the distribution of the New Notes.
(cc) The Exchange Agent Agreement and the Information Agent
Agreement between the Company and State Street Bank and Trust Company (the
"Exchange Agent
13
Agreement") and Xxxxxxxxx Shareholder Communications Inc., (the "Information
Agent Agreement"), respectively, is or will be in full force and effect.
(dd) Except as otherwise disclosed in the Prospectus, (i) the
Company is in compliance with all rules, laws and regulations relating to the
use, treatment, storage and disposal of toxic substances and protection of
public health or the environment ("Environmental Laws") which are applicable to
its business, except where the failure to comply would not result in a Material
Adverse Change, (ii) the Company has received no notice from any governmental
authority or third party of an asserted claim under Environmental Laws, (iii)
based on present business plans, the Company will not be required to make future
material capital expenditures to comply with Environmental Laws presently in
effect and (iv) no property which is owned, leased or occupied by the Company
has been designated as a Superfund site pursuant to the Comprehensive Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et
seq.), or otherwise designated as a contaminated site under applicable state or
local law.
(ee) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and its subsidiaries, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up, closure
of properties or compliance with Environmental Laws or any potential liabilities
to related constraints on operating activities and any potential liabilities to
third parties). On the basis of such review and the amount of its established
reserves, the Company has reasonably concluded that such associated costs and
liabilities would not, individually or in the aggregate, have a Material Adverse
Effect.
(ff) To the best of the Company's knowledge, no labor disturbance by
the employees of the Company or any of its subsidiaries exists or, is imminent.
(gg) Each of the Company and its subsidiaries are insured by
recognized, financially sound and reputable institutions with policies in such
amounts and with such deductibles and covering such risks as are generally
deemed adequate and customary for their respective businesses, including, but
not limited to, policies covering real and personal property owned or leased by
the Company and its subsidiaries against theft, damage, destruction and acts of
vandalism, general liability and Directors and Officers liability. The Company
has no reason to believe that it or any subsidiary will not be able (i) to renew
its existing insurance coverage as and when such policies expire or (ii) to
obtain comparable coverage from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost that would
not result in a Material Adverse Change. Neither of the Company nor any
subsidiary has been denied any insurance coverage which it has sought or for
which it has applied.
(hh) To the best knowledge of the Company, the present fair saleable
value of the assets of the Company exceeds the amount that will be required to
be paid on or in respect of the existing debts and other liabilities (including
contingent liabilities) of the Company as they become absolute and matured; the
assets of the Company do not constitute unreasonably small capital to carry out
its business as conducted or as proposed to be conducted, including the
14
capital needs of the Company, taking into account the projected capital
requirements and capital availability of the Company; the Company does not
intend to, nor does it believe that it will, incur debts beyond its ability to
pay such debts as they mature; upon the issuance of the New Notes and the
application of the proceeds thereof as contemplated by the Prospectus, the
present fair saleable value of the assets of the Company will exceed the amount
that will be required to be paid on or in respect of the existing debts and
other liabilities (including contingent liabilities) of the Company as they
become absolute and matured; the assets of the Company, upon the issuance of the
securities and the application of the proceeds thereof as contemplated by the
Prospectus, will not constitute unreasonably small capital to carry out its
business as conducted or as proposed to be conducted, including the capital
needs of the Company, taking into account the projected capital requirements and
capital availability of the Company.
(ii) Neither the Company nor any of its subsidiaries nor, to the
best of the Company's knowledge, any employee or agent of the Company or any
subsidiary, has made, in the last five years, any contribution or other payment
to any official of, or candidate for, any federal, state or foreign office in
violation of any law or of the character required to be disclosed in the
Prospectus.
(jj) Each "employee benefit plan" (within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as amended, and the
regulations and published interpretations thereunder (collectively, "ERISA")
established or maintained by the Company, a subsidiary or their "ERISA
Affiliates" (as defined below) (collectively the "Plans") is in compliance in
all material respects with ERISA. "ERISA Affiliate" means, with respect to the
Company or a subsidiary, any member of any group of organizations described in
section 414(b), (c), (m) or (o) of the Internal Revenue Code of 1986, as
amended, and the regulations and published interpretations thereunder (the
"Code") of which the Company or such subsidiary is a member. Neither the
Company, a subsidiary nor any ERISA Affiliate has ever contributed to,
contributes to, been required to contribute to or has any liability with respect
to any employee benefit plan subject to Title IV or ERISA, section 412 of the
Code or section 302 of ERISA. Each of the Plans established or maintained by the
Company, a subsidiary or any of their ERISA Affiliates that is intended to be
qualified under section 401(a) of the Code is so qualified and nothing has
occurred, whether by action or failure to act, which would cause the loss of
such qualification. Neither the Company, a subsidiary nor any of their ERISA
Affiliates has incurred or reasonably expects to incur any liability under
section 4975 or 4980B of the Code. There are no actions, suits or claims
pending, threatened or to the Company's knowledge, anticipated (other than
routine claims for benefits) against any of the Plans, their assets or their
fiduciaries.
(kk) There are no business relationships or related-party
transactions involving the Company or any subsidiary or any other person
required to be described in the Registration Statement which have not been
described as required.
(ll) There are no documentary stamp or other issuance or transfer
taxes or other similar fees or charges under Federal law or the laws of any
state, or any political subdivision thereof, required to be paid in connection
with the execution and delivery of this Agreement, and the Indenture or the
issuance and sale by the Company of the New Notes. The
15
Company has not paid or agreed to pay any person any compensation for soliciting
another to purchase any New Notes (except as contemplated by this Agreement).
(mm) All written communications, in addition to the Schedule TO,
made during the period from the first public announcement and to the earlier of
either the termination date or the Closing Date of the Exchange Offer, have been
or will be filed with the Commission in accordance with the Exchange Act and the
Rules and Regulations thereunder, including Rule 13e-4 under the Exchange Act.
(nn) Except as disclosed in the Prospectus, there are no persons
with registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered by the
Company under the Securities Act.
9. Further Agreements of the Company. The Company agrees with you that:
(a) The Company will use its best efforts to cause the Registration
Statement and any amendment thereof to become effective as soon as possible but
no later than the Expiration Date; the Company will use its best efforts to
cause any abbreviated registration statement pursuant to Rule 462(b) of the
Rules and Regulations as may be required subsequent to the date the Registration
Statement is declared effective to become effective as promptly as possible; the
Company will notify you, promptly after it shall receive notice thereof, of the
time when the Registration Statement, any subsequent amendment to the
Registration Statement or any abbreviated registration statement has become
effective or any supplement to the Prospectus or additional Exchange Offer
Materials has been filed; if for any reason the filing of the final form of
Prospectus is required under Rule 424(b) of the Rules and Regulations, the
Company will provide evidence satisfactory to you that the Prospectus contains
such information and has been filed with the Commission within the time period
prescribed; the Company will notify you promptly of any request by the
Commission for the amending or supplementing of the Registration Statement or
the Prospectus or other Exchange Offer Materials or for additional information
relating to the Exchange Offer; promptly upon your request, the Company will
prepare and file with the Commission any amendments or supplements to the
Registration Statement or Prospectus or other Exchange Offer Materials which, in
the opinion of your counsel, may be necessary or advisable in connection with
the Exchange Offer; the Company will promptly prepare and file with the
Commission, and promptly notify you of the filing of, any amendments or
supplements to the Registration Statement or the Prospectus or other Exchange
Offer Materials which may be necessary to correct any statements or omissions,
if, at any time when a Prospectus relating to the Exchange Offer is required to
be delivered under the Securities Act and the Exchange Act, any event shall have
occurred as a result of which the Prospectus or any other prospectus relating to
the Exchange Offer as then in effect would include any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and the Company will file no amendment or supplement to the
Registration Statement or the Prospectus or other Exchange Offer Materials,
which shall not previously have been submitted to
16
you a reasonable time prior to the proposed filing thereof and will give
reasonable consideration to your or your counsel's comments, if any, thereon,
subject, however, to compliance with the Securities Act and the Rules and
Regulations, the Exchange Act and the Rules and Regulations of the Commission
thereunder and the provisions of this Agreement. Notwithstanding anything else
to the contrary set forth in this Agreement, the Company reserves the right to
terminate the Exchange Offer prior to the Expiration Date of the Exchange Offer
or amend or modify the business terms of the Exchange Offer in its sole and
absolute discretion, subject to the Company's obligations under Sections 6, 7
and 11 of this Agreement in the event that the Dealer Manager withdraws pursuant
to Section 5 as a result of any such termination, amendment or modification.
(b) The Company will advise you, promptly after it shall receive
notice or obtain knowledge, of the issuance of any order by the Commission
refusing or suspending the effectiveness of the Registration Statement or of the
initiation or threat of any proceeding for that purpose; and it will promptly
use its best efforts to prevent the issuance of any refusal or stop order or to
obtain its withdrawal at the earliest possible moment if such refusal or stop
order should be issued.
(c) The Company will use its best efforts to qualify the New Notes
issuable pursuant to the Exchange Offer under the securities laws of such
jurisdictions as you may designate and to continue such qualifications in effect
for so long as may be required for purposes of the Exchange Offer, except that
the Company shall not be required in connection therewith or as a condition
thereof to qualify as a foreign corporation or to execute a general consent to
service of process in any jurisdiction in which it is not otherwise required to
be so qualified or to so execute a general consent to service of process. In
each jurisdiction in which the New Notes shall have been qualified as above
provided, the Company will make and file such statements and reports in each
year as are or may be required by the laws of such jurisdiction.
(d) The Company will use its best efforts to have the shares of
Common Stock underlying the New Notes accepted for quotation on Nasdaq.
(e) The Company will make generally available to its security
holders and to the Dealer Manager by filing with the Commission as soon as is
practicable, an earnings statement covering a twelve-month period beginning not
later than the first day of the Company's next fiscal quarter following the
effective date of the Registration Statement that satisfies the provisions of
Section 11(a) of the Securities Act and the Rules and Regulations of the
Commission thereunder.
(f) The Company will use its best efforts to advise or cause the
Exchange Agent to advise the Dealer Manager at 5:00 P.M., New York City time, or
promptly thereafter, daily (or more frequently if requested), by telephone or
facsimile transmission, with respect to Existing Notes tendered as follows: (i)
the aggregate principal amount of Existing Notes validly tendered and
represented by confirmations of receipt of book-entry transfer of Existing Notes
pursuant to the procedures set forth in the Exchange Offer on such day, (ii) the
aggregate
17
principal amount of any Existing Notes properly withdrawn on such day, and (iii)
the cumulative totals of the principal amount of Existing Notes in categories
(i) through (ii), inclusive, above.
(g) Without limiting Sections 5, 7 and 13 of this Agreement, if the
transactions contemplated hereby are not consummated by reason of any failure,
refusal or inability on the part of the Company to perform any agreement on its
part to be performed hereunder or to fulfill any condition of your obligations
hereunder, the Company will reimburse you for all out-of-pocket expenses
(including fees and disbursements of your counsel) incurred by you in connection
with the Exchange Offer.
(h) During a period of 90 days from the date of the Prospectus, the
Company will not, without the prior written consent of the Dealer Manager, (i)
directly or indirectly, offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any options or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of any
Shares or any securities convertible into or exercisable or exchangeable for
Shares or file any registration statement under the Securities Act with respect
to any of the foregoing or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of the Shares, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Shares or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (A) the New Notes to be sold hereunder, (B) any Shares issued
or options to purchase Shares granted pursuant to existing stock-ownership plans
of the Company referred to in the Prospectus, (C) any Shares issued in
connection with the rights described in the Prospectus, (D) any Shares issued
pursuant to any non-employee director stock plan or dividend reinvestment plan,
or (E) Shares issuable upon the conversion of any of the Company's outstanding
Existing Notes.
10. Conditions of Dealer Manager's Obligations. Your obligations as
provided herein shall be subject at all times on and prior to the Closing Date
to the accuracy of the representations and warranties of the Company herein, to
the accuracy of the statements of officers of the Company made pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Registration Statement shall have been filed prior to the
Commencement Date and no stop order refusing the effectiveness thereof shall
have been issued and the Registration Statement shall become effective prior to
the Expiration Date and no stop order suspending the effectiveness thereof shall
have been issued and no proceedings for either purpose shall have been initiated
or, to the knowledge of the Company or you, threatened by the Commission, and
any request of the Commission for additional information (to be included in the
Registration Statement, the Prospectus, or other Exchange Offer Materials or
otherwise) shall have been complied with to the reasonable satisfaction of your
counsel.
(b) After execution and delivery of this Agreement and prior to the
Closing Date there shall not have occurred from the respective dates as of which
information is given in the Prospectus (exclusive of any supplement thereto) (i)
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the
18
Company whether or not arising in the ordinary course of business, or (ii) any
material adverse change in the financial markets in the United States or in the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving a
prospective change in national or international political, financial or economic
conditions, which in each case the effect of which is such as to make it, in the
judgment of the Dealer Manager, impracticable or inadvisable to market the New
Notes or to enforce contracts for the exchange and/or sale of the New Notes, or
(iii) any trading suspension or material limitation in trading instituted by the
Commission or the Nasdaq National Market, or generally, any trading suspension
or material limitation in trading on the American Stock Exchange or the New York
Stock Exchange or in the Nasdaq National Market, or the fixing of minimum or
maximum prices for trading, or the establishment of required maximum ranges for
prices by any of said exchanges or by such system or by order of the Commission,
the National Association of Securities Dealers, Inc. or any other governmental
authority, or the occurrence of a material disruption in commercial banking or
securities settlement or clearance services in the United States, or (iv) the
declaration of a banking moratorium by either Federal or New York authorities.
(c) All corporate proceedings and other legal matters in connection
with this Agreement, the Registration Statement, the Prospectus, other Exchange
Offer Materials or otherwise, and the registration, authorization, issue, and
delivery of the New Notes issuable in accordance with the Exchange Offer, shall
have been reasonably satisfactory to your counsel, and such counsel shall have
been furnished with such papers and information as they may reasonably have
requested to enable them to pass upon the matters referred to in this Section.
(d) You shall have received the opinion of Xxxxxxx Xxxxx Xxxxxxx &
Xxxxxxxxx, LLP, counsel for the Company, dated the Closing Date, addressed to
you, substantially to the effect set forth in Exhibit B-1 hereto.
(e) You shall have received the opinion of Xxxxxxxx, Xxxxx, Xxxxx &
Xxxxxxxx, P.C., patent counsel to the Company, dated the Closing Date, addressed
to you, substantially to the effect set forth in Exhibit B-2 hereto.
(f) You shall have received the opinion of Xxxxxxxxx & Xxxxxxx,
patent counsel to the Company, dated the Closing Date, addressed to you,
substantially to the effect set forth in Exhibit B-3 hereto.
Counsel rendering the foregoing opinions in (d), (e) and (f) may
rely as to questions of law not involving the laws of the United States of
America or the Commonwealth of Pennsylvania upon opinions of local counsel, and
as to questions of fact upon representations or certifications of officers of
the Company, and of government officials, in which case their opinion is to
state that they are so relying and that they have no knowledge of any material
misstatement or inaccuracy in any such opinion, representation or certificate.
Copies of any opinion, representation or certificate so relied upon shall be
delivered to you, as Dealer Manager, and to your counsel.
19
(g) You shall have received on the Closing Date an opinion of Xxxxx,
Xxxxxxx & Xxxxxxxxx, LLP, and Shearman & Sterling in form and substance
satisfactory to you, with respect to the sufficiency of all such corporate
proceedings and other legal matters relating to this Agreement and the
transactions contemplated hereby as you may reasonably require, and the Company
shall have furnished to such counsel such documents as they may have requested
for the purpose of enabling them to pass upon such matters.
(h) At the time of the execution of this Agreement, you shall have
received from Deloitte & Touche, LLP, a letter dated such date, in form and
substance satisfactory to you containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information for the
fiscal years 2000, 2001 and 2002 and the six months ended September 30, 2002
contained in the Prospectus.
(i) You shall have received by or on effective date of the
Registration Statement, a bring-down comfort letter, dated as of the effective
date (or one business day prior thereto) as the case may be, from Deloitte &
Touche, LLP addressed to you which shall reaffirm the statements made in the
letter referenced in (h) above.
(j) You shall have received by or on the Closing Date, a bring-down
comfort letter dated as of the Closing Date (or one business day prior thereto)
as the case may be, from Deloitte & Touche LLP addressed to you which shall
reaffirm the statements made in the letters referenced in (h) and (i) above.
(k) You shall have received a certificate of the Company, dated as
of the Closing Date, signed by the Chief Executive Officer and Chief Financial
Officer of the Company, certifying that, and you shall be satisfied that:
(i) the representations and warranties of the Company in
this Agreement are true and correct in all material respects,
as if made on and as of the Closing Date or such other date as
of which any representation speaks, as the case may be, and
the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at
or prior to the Closing Date, as the case may be;
(ii) no stop order refusing or suspending the
effectiveness of the Registration Statement has been issued
and no proceedings for that purpose have been instituted or
are pending or threatened under the Securities Act;
(iii) when the Registration Statement became effective
and at all times subsequent thereto up to the date of such
certificate, the Registration Statement and the Prospectus,
and any amendments or supplements thereto, contained all
material information required to be included therein by the
Securities Act and the Rules and Regulations thereunder or the
Exchange Act and the applicable Rules and Regulations of the
Commission
20
thereunder, as the case may be, and in all material respects
conformed to the requirements of the Securities Act and the
Rules and Regulations thereunder or the Exchange Act and the
applicable Rules and Regulations of the Commission thereunder,
as the case may be; the Registration Statement, and any
amendment or supplement thereto, did not and does not include
any 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; the Prospectus,
and any amendment or supplement thereto, did not and does not
include any untrue statement of a material fact or omit to
state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading; and since the effective date of the
Registration Statement, there has occurred no event required
to be set forth in an amended or supplemented Prospectus which
has not been so set forth; and
(iv) subsequent to the respective dates as of which
information is given in the Registration Statement and
Prospectus and up to the date of such certificate, and except
as disclosed therein, there has not been (a) any material
adverse change in the condition (financial or otherwise),
earnings, operations, business or business prospects of the
Company and its subsidiaries considered as one enterprise, (b)
any transaction that is material to the Company and its
subsidiaries considered as one enterprise, except transactions
entered into in the ordinary course of business, (c) any
obligation, direct or contingent, that is material to the
Company and its subsidiaries considered as one enterprise,
incurred by the Company or its subsidiaries, except
obligations incurred in the ordinary course of business, (d)
any change in the capital stock or outstanding indebtedness of
the Company that is material to the Company and its
subsidiaries considered as one enterprise, (e) any dividend or
distribution of any kind declared, paid or made on the capital
stock of the Company, or (f) any loss or damage (whether or
not insured) to the property of the Company or any of its
subsidiaries which has been sustained or will have been
sustained and which has a Material Adverse Effect or a
material adverse effect on the ability of the Company to
perform its obligations under the Exchange Offer or consummate
the Exchange Offer.
(l) The Company shall have furnished to you such further
certificates and documents as you shall reasonably request (including
certificates of officers of the Company) as to the accuracy of the
representations and warranties of the Company herein, as to the performance by
the Company of its obligations hereunder and as to the other conditions
concurrent and precedent to your obligations hereunder.
(m) You shall have received lock-up letters, substantially in the
form set forth in Exhibit A hereto, from each of the executive officers and
directors of the Company set forth in Schedule A hereto.
21
(n) The NASD shall have confirmed that it has not raised any
objection with respect to the fairness and reasonableness of the terms and
arrangements in connection with the offering of the New Notes.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to your counsel. The Company will furnish you with such number of conformed
copies of such opinions, certificates, letters and documents, as you shall
reasonably request.
11. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold you harmless against
any losses, claims, damages or liabilities, joint or several, to which you may
become subject under the Securities Act, the Exchange Act or otherwise,
specifically including, but not limited to, losses, claims, damages or
liabilities (or actions in respect thereof) arising out of or based upon (i) any
breach of any representation, warranty, agreement or covenant of the Company
herein contained, (ii) any untrue statement or alleged untrue statement of any
material fact contained in the Registration Statement, the Schedule TO or any
Exchange Offer Materials, or any amendments or supplements thereto, or 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, or
(iii) any untrue statement or alleged untrue statement of any material fact
contained in any Prospectus or any amendment or supplement thereto, or the
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, and agrees to reimburse you for any legal or other
expenses reasonably incurred by you in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in the Registration Statement, the Prospectus, the Schedule TO, any other
Exchange Offer Materials, or any amendment or supplement thereto made in
reliance upon and in conformity with written information furnished to the
Company by you expressly for use in the Registration Statement, the Prospectus,
the Schedule TO or any other Exchange Offer Materials or any amendment or
supplement thereto or in the preparation thereof.
The indemnity agreement in this Section 11(a) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, you and your
affiliates and the partners, directors, officers, employees and agents of you
and your affiliates, and each person or entity, if any, who controls or is under
common control with, you within the meaning of the Securities Act or the
Exchange Act. This indemnity agreement shall be in addition to any liabilities,
which the Company may otherwise have.
(b) You agree to indemnify and hold harmless the Company against any
losses, claims, damages or liabilities, joint or several, to which the Company
may become subject under the Securities Act, the Exchange Act or otherwise,
specifically including, but not limited to, losses, claims, damages or
liabilities (or actions in respect thereof) arising out of or based upon (i) any
breach of any representation, warranty, agreement or covenant of yours herein
22
contained, (ii) any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, the Schedule TO or any Exchange
Offer Materials, or any amendments or supplements thereto or 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, or (iii) any untrue
statement or alleged untrue statement of any material fact contained in the
Prospectus or any amendment or supplement thereto, or the omission or alleged
omission to state therein a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, in the case of subparagraphs (ii) and (iii) of this Section 11(b) to
the extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon, and in
conformity with, written information furnished to the Company by you
specifically for use in the Registration Statement, the Prospectus, the Schedule
TO, any other Exchange Offer Materials or any amendment or supplement thereto or
in the preparation thereof, and you agree to reimburse the Company for any legal
or other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action.
The indemnity agreement in this Section 11(b) shall extend upon the
same terms and conditions to, and shall inure to the benefit of, each officer of
the Company who signed the Registration Statement and each director of the
Company, and each person, if any, who controls the Company within the meaning of
the Securities Act or the Exchange Act. This indemnity agreement shall be in
addition to any liabilities, which you may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 11 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 11, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in this
Section 11 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it shall elect, jointly with all other indemnifying parties
similarly notified, by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from such indemnified party, to
assume the defense thereof with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that a conflict may arise
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of such indemnifying party's election so to
assume the defense of such action and approval by the indemnified party of
23
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 11 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel (together with local counsel), approved by the indemnifying
party (the Company in the case of Section 11(a) and U.S. Bancorp Xxxxx Xxxxxxx,
Inc. in the case of Section 11(b)), representing the indemnified parties who are
parties to such action), (ii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of commencement of such action, or (iii)
the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party, in each of which
cases the reasonable fees and expenses of counsel shall be at the expense of the
indemnifying party.
(d) The indemnifying party under this Section 11 shall not be liable
for any settlement of any proceeding effected without its written consent,
unless the indemnifying party shall have approved the terms of settlement;
provided that such consent shall not be unreasonably withheld. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes (i) an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act by or on behalf of any indemnified party.
(e) In order to provide for just and equitable contribution in any
action in which a claim for indemnification is made pursuant to this Section 11
but it is judicially determined (by the entry of a final judgment or decree by a
court of competent jurisdiction and the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 11 provides for
indemnification in such case, all the parties hereto shall contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion so that you are responsible
for the portion represented by the percentage that the maximum Dealer Manager's
fee payable to the Dealer Manager pursuant to Section 6 hereof bears to the
value of the maximum amount of New Notes issuable pursuant to the Exchange
Offer, and the Company is responsible for the remaining portion, provided,
however, that (i) you shall not be required to contribute any amount in excess
of the amount by which the fee paid to you pursuant to Section 6 hereof exceeds
the amount of damages which you have been otherwise required to pay and (ii) no
person guilty of a fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who is not guilty of such fraudulent misrepresentation. The contribution
agreement in this Section 11(d) shall extend upon the same terms and conditions
to, and shall inure to the benefit of, each person, if any, who controls you or
the Company within the meaning of the Securities Act or the
24
Exchange Act and each officer of the Company who signed the Registration
Statement and each director of the Company.
12. Representations, Warranties, Covenants and Agreements to Survive
Delivery. All representations, warranties, covenants and agreements of the
Company and you herein or in certificates delivered pursuant hereto, and the
indemnity and contribution agreements contained in Section 11 hereof shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of you or any person controlling you within the meaning of
the Securities Act or the Exchange Act, or by or on behalf of the Company or any
of its officers, directors or controlling persons within the meaning of the
Securities Act or the Exchange Act, and shall survive the completion of the
Exchange Offer or termination of this Agreement.
13. Termination.
(a) This Agreement shall terminate upon the earliest to occur of (i)
thirty days after the Expiration Date, (ii) any of the conditions specified in
Section 10 has not been fulfilled as of any date such condition is required to
be fulfilled pursuant to Section 10 (and the Dealer Manager shall have notified
the Company thereof), (iii) the date on which the Company terminates or
withdraws the Exchange Offer for any reason, or (iv) any modification to the
business terms of the Exchange Offer in the Company's sole and absolute
discretion that results in the Dealer Manager withdrawing pursuant to Section 5
hereof, (the earliest to occur of clauses (i), (ii), (iii) or (iv) being
referred to as the "Termination Date").
(b) Notwithstanding termination of this Agreement pursuant to
subsection (a) above, the obligations of the parties pursuant to Sections 6, 7
and 11 shall survive any termination of this Agreement.
If you elect to terminate this Agreement as provided in this Section
13, you shall promptly notify the Company by telephone, telecopy or telegram, in
each case confirmed by letter.
14. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to you shall be
mailed, delivered, or telecopied (and confirmed by letter) to you c/o U.S.
Bancorp Xxxxx Xxxxxxx, Inc., 000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, XX
00000-0000 telecopier number (612-303-1772), Attention: General Counsel's
Department; if sent to the Company, such notice shall be mailed, delivered,
telegraphed (and confirmed by letter) or telecopied (and confirmed by letter) to
Alkermes, Inc., 00 Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000, Attention: Xxxxx X.
Xxxxxx, with a copy to Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx, LLP, 0000 Xxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxxxxxx, XX 00000. Attention: Xxxxxx Xxxxxxx, Xx.
15. Parties. This Agreement shall inure to the benefit of and be binding
upon the Dealer Manager and the Company and their respective executors,
administrators, successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person or entity, other
than the parties hereto and their respective executors, administrators,
successors and assigns, and the controlling persons within the meaning of the
25
Securities Act or the Exchange Act, officers and directors referred to in
Section 11 hereof, any legal or equitable right, remedy or claim in respect of
this Agreement or any provisions herein contained. This Agreement, and all
conditions and provisions hereof, is intended to be and is for the sole and
exclusive benefit of the parties hereto and their respective executors,
administrators, successors and assigns and said controlling persons and said
officers and directors, and for the benefit of no other person or entity. No
Holder of Existing Notes receiving New Notes upon exchange of such Existing
Notes shall be construed a successor or assign by reason merely of such
exchange.
16. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
17. Counterparts. This Agreement may be signed in several counterparts,
each of which will constitute an original.
Please indicate your willingness to act as Dealer Manager on the terms set
forth herein and your acceptance of the foregoing provisions by signing in the
space provided below for that purpose and returning to us a copy of this letter,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
ALKERMES, INC.
By
--------------------------------
Name:
Title:
Accepted as of the date first above written:
U.S. BANCORP XXXXX XXXXXXX, INC.
By
-----------------------------
Name:
Title:
26
Schedule A
Persons Subject to Lock-Up
Xxxxxxx X. Wall
Xxxxx X. Xxxxx, M.D.
Xxxxxx X. Xxxxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Pops
Xxxxxxxxx Xxxx, M.D.
Xxxx Xxxxxxxx, Ph.D.
Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxx, Ph.D.
Xxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxxx
Exhibit A
Form of Lock-up
November ___, 2002
U.S. Bancorp Xxxxx Xxxxxxx, Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Re: Alkermes, Inc.
Ladies and Gentlemen:
Reference is made to a Registration Statement on Form S-4 and Form S-3 of
Alkermes, Inc. (the "Company") (as the same may now or hereafter exist or be
amended, the "Registration Statement") pursuant to which it is proposed that
$115,000,000 principal amount of the Company's 6.52% Convertible Senior
Subordinated Notes due 2009 (the "Notes") will be exchanged for $200,000,000
principal amount of the Company's 3.75% Convertible Subordinated Notes due 2007
(the "Exchange Offer"), for which U.S. Bancorp Xxxxx Xxxxxxx, Inc. ("Xxxxx
Xxxxxxx") will act as the dealer manager (the "Dealer Manager") and pursuant to
which it is proposed that there will be a public offering of the Notes (the
"Public Offering") for which Xxxxx Xxxxxxx will act as the placement agent (the
"Placement Agent"). Shares of Common Stock, $0.01 par value per share, of the
Company ("Common Stock") are held by the undersigned.
In order to induce Xxxxx Xxxxxxx, as the Dealer Manager that may
participate in the Exchange Offer, and as the Placement Agent that may
participate in the Public Offering, to continue its efforts in connection with
the Exchange Offer and the Public Offering, the undersigned hereby agrees not
to, directly or indirectly, sell, offer to sell, contract to sell, pledge, grant
any option for sale or purchase of, agree to sell or otherwise dispose of
(collectively "Disposition"), any shares of Common Stock, or any securities
convertible into or exercisable for Common Stock (individually and collectively,
the "Securities"), beneficially owned by the undersigned now or acquired by the
undersigned on or before the effective date of the Registration Statement (the
"Effective Date"), or with respect to which the undersigned now has, or on or
before the Effective Date acquires, the power of Disposition, for a period
commencing on the Effective Date and ending 90 days thereafter (the "Lock-Up
Period"), without the prior written consent of Xxxxx Xxxxxxx; provided, however,
that the foregoing agreement shall not apply to (i) gifts to family members or
charitable contributions of Common Stock or securities convertible into or
exercisable for Common Stock made by the undersigned in transfers not involving
a public distribution or public offering, if the recipient of such gift or
contribution agrees in writing as a condition precedent to such gift or
contribution to be bound by the terms
hereof, or (ii) transfers of Securities to "affiliates" of the transferor in
transfers not involving a public distribution or public offering, if the
transferee agrees in writing as a condition precedent to such transfer to be
bound by the terms hereof. The term "affiliate" shall have the meaning given
such term in Rule 144 under the Securities Act of 1933. The transferor shall
notify Xxxxx Xxxxxxx in writing prior to the transfer and shall deliver the
above-mentioned agreement on the part of the permitted transferee, in form and
substance satisfactory to Xxxxx Xxxxxxx. During the Lock-Up Period, there shall
be no further transfer of Common Stock or securities convertible into or
exercisable for Common Stock, by either the undersigned or any permitted
transferee, except in accordance with this letter agreement. Nothing herein
shall prevent or prohibit the undersigned from arranging for any sale of
Securities under a 10b5-1 selling program, provided that any sales under such
program occur after the Lock-Up period.
The foregoing restriction has been expressly agreed to preclude the holder
of the Securities from engaging in any hedging or other transaction which is
designed to or reasonably expected to lead to or result in a Disposition of
Securities during the Lock-Up Period, even if such Securities would be disposed
of by someone other than such holder. Such prohibited hedging or other
transactions would include, without limitation, any short sale (whether or not
against the box) or any purchase, sale or grant of any right (including, without
limitation, any put or call option) with respect to any Securities or with
respect to any security (other than a broad-based market basket or index) that
included, relates to or derives any significant part of its value from
Securities.
In furtherance of the foregoing, the Company and its transfer agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this letter agreement. The undersigned
also agrees and consents to the entry of stock transfer instructions with the
Company's transfer agent against the transfer of any shares of Common Stock or
securities convertible into or exercisable for Common Stock.
In addition, the undersigned hereby waives any rights with respect to the
registration of Securities, including any "piggyback" or demand rights for
registration of the Securities under any federal or applicable state securities
laws, that the undersigned may be entitled to exercise as a result of or in
connection with the filing of the Registration Statement or the Exchange Offer
or the Public Offering generally, and further agrees that, without the prior
written consent of Xxxxx Xxxxxxx, it will not, during the period commencing on
the date hereof and ending 90 days after the Effective Date, make any demand for
or exercise any right with respect to, the registration of any Securities.
Whether or not the Exchange Offer or the Public Offering actually occurs
depends upon a number of factors, including market conditions. Any Exchange
Offer will only be made pursuant to a dealer-manager agreement, the terms of
which are subject to negotiation between the Dealer Managers and the Company.
Any Public Offering will only be made pursuant to a placement agent agreement or
purchase agreement, the terms of which are subject to negotiation between the
Placement Agent and the Company.
The undersigned intends to be legally bound hereby.
Very truly yours,
------------------------------------------
Printed Name of Holder
By:
--------------------------------------
Signature
------------------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing
if signing as custodian, trustee, or on
behalf of an entity)
Date:
------------------------------------
