1
DRAFT
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2,500,000 Shares
VERTEX PHARMACEUTICALS INCORPORATED
Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
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March __, 1997
XXXXX & COMPANY
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXXXX & COMPANY LLC
X.X. XXXXXX SECURITIES INC.
As Representatives of the several Underwriters
c/o Cowen & Company
Xxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
1. INTRODUCTORY. Vertex Pharmaceuticals Incorporated, a Massachusetts
corporation (the "Company"), proposes to sell, pursuant to the terms of this
Agreement, to the several underwriters named in SCHEDULE A hereto (the
"Underwriters," or, each, an "Underwriter"), an aggregate of 2,500,000 shares of
Common Stock, $.01 par value (the "Common Stock"), of the Company. The aggregate
of 2,500,000 shares so proposed to be sold is hereinafter referred to as the
"Firm Stock." The Company also proposes to sell to the Underwriters, upon the
terms and conditions set forth in Section 3 hereof, up to an additional 375,000
shares of Common Stock (the "Optional Stock"). The Firm Stock and the Optional
Stock are hereinafter collectively referred to as the "Stock." Xxxxx & Company
("Cowen"), Bear, Xxxxxxx & Co. Inc. ("Bear, Xxxxxxx"), Xxxxxxxxx, Xxxxxxxx &
Company LLC ("Xxxxxxxxx") and X.X. Xxxxxx Securities Inc. ("X.X. Xxxxxx") are
acting as representatives of the several Underwriters and in such capacity are
hereinafter referred to as the "Representatives."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-_____) in
the form in which it became or becomes effective and also in such form as it may
be when any post-effective amendment thereto shall become effective with respect
to the Stock, including any preeffective prospectuses included as part of the
registration statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations (the
"Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder,
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copies of which have heretofore been delivered to you, and, to the extent
applicable, were identical to the electronically transmitted copies thereof
filed with the Commission pursuant to the Commission's Electronic Data
Gathering, Analysis and Retrieval System ("XXXXX"), except to the extent
permitted by Regulation S-T, has been carefully prepared by the Company in
conformity with the requirements of the Securities Act and has been filed with
the Commission under the Securities Act; one or more amendments to such
registration statement, including in each case an amended preeffective
prospectus, copies of which amendments have heretofore been delivered to you,
and, to the extent applicable, were identical to the electronically transmitted
copies thereof filed with the Commission pursuant to the Commission's Electronic
Data Gathering, Analysis and Retrieval System ("XXXXX"), except to the extent
permitted by Regulation S-T, have been so prepared and filed. If it is
contemplated, at the time this Agreement is executed, that a post-effective
amendment to the registration statement will be filed and must be declared
effective before the offering of the Stock may commence, the term "Registration
Statement" as used in this Agreement means the registration statement as amended
by said post-effective amendment. The term "Registration Statement" as used in
this Agreement shall also include any registration statement relating to the
Stock that is filed and declared effective pursuant to Rule 462(b) under the
Securities Act. The term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement, or, (A) if the
prospectus included in the Registration Statement omits information in reliance
on Rule 430A under the Securities Act and such information is included in a
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act, the term "Prospectus" as used in this Agreement means the
prospectus in the form included in the Registration Statement as supplemented by
the addition of the Rule 430A information contained in the prospectus filed with
the Commission pursuant to Rule 424(b) and (B) if prospectuses that meet the
requirements of Section 10(a) of the Securities Act are delivered pursuant to
Rule 434 under the Securities Act, then (i) the term "Prospectus" as used in
this Agreement means the "prospectus subject to completion" (as such term is
defined in Rule 434(g) under the Securities Act) as supplemented by (a) the
addition of Rule 430A information or other information contained in the form of
prospectus delivered pursuant to Rule 434(b)(2) under the Securities Act or (b)
the information contained in the term sheets described in Rule 434(b)(3) under
the Securities Act, and (ii) the date of such prospectuses shall be deemed to be
the date of the term sheets. The term "Preeffective Prospectus" as used in this
Agreement means the prospectus subject to completion in the form included in the
Registration Statement at the time of the initial filing of the Registration
Statement with the Commission, and as such prospectus shall have been amended
from time to time prior to the date of the Prospectus. Any reference herein to
any Preeffective Prospectus or the prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Form S-3
under the Securities Act, as of the date of such Preeffective Prospectus or
Prospectus, as the case may be, and any reference to any amendment or supplement
to any Preeffective Prospectus or the Prospectus shall be deemed to refer to and
include any documents filed after such date under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and so incorporated by reference. For
purposes of this Agreement, all references to the Registration Statement, any
Preliminary Prospectus, the Prospectus, or any amendment or supplement to any of
the foregoing, shall be deemed to include the respective copies thereof filed
with the Commission pursuant to XXXXX.
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(b) The Company owns or controls, directly or indirectly, only the
following corporations, associations or other entities: Altus Biologics Inc.,
Vertex Pharmaceuticals Securities Corporation and Versal Technologies, Inc.
(hereinafter referred to collectively as the "Subsidiaries"). Each of the
Subsidiaries have been duly incorporated and are validly existing as
corporations in good standing (or the legal equivalent) under the laws of their
respective jurisdictions of incorporation, have full corporate power and
authority to own or lease their properties and conduct their businesses as
described in the Registration Statement and as being conducted and are duly
qualified or licensed to transact business in all jurisdictions in which the
character of the property owned or leased or the nature of the business
transacted by them requires such qualification (except where the failure to be
so qualified would not have a material adverse effect on the business,
properties, operations, financial conditions, income or business prospects of
the Company and the Subsidiaries, taken as a whole, as presently being
conducted). All of the outstanding shares of capital stock of the Subsidiaries
have been duly authorized and validly issued, are fully paid and non-assessable,
and are owned by the Company free and clear of all liens, encumbrances and
security interests, and, except for (i) Altus Biologics Inc., as to which
options to purchase __% of the common stock of Altus Biologics Inc., calculated
on a fully-diluted basis have been issued and (ii) Versal Technologies, Inc., as
to which options to purchase __% of the common stock of Versal Technologies,
Inc., calculated on a fully-diluted basis have been issued, no outstanding
options, warrants or other rights to purchase, agreements or other obligations
to issue, or other rights to convert any obligations into shares of capital
stock or ownership interests in the Subsidiaries are outstanding.
(c) The Company and the Subsidiaries now hold, and at the First
Closing Date (as hereinafter defined) will hold, all material licenses,
certificates and permits from state, Federal, and other regulatory authorities
that are necessary for the conduct of their respective businesses as they are
presently conducted, except where the failure to hold such licenses,
certificates and permits would not have a material adverse effect on the
business, properties, operations, financial conditions, income or business
prospects of the Company and the Subsidiaries, taken as a whole; neither the
Company nor any of the Subsidiaries is in violation of its respective corporate
charter or by-laws, or in default in the performance or observance of any
provision of any obligation, agreement, covenant, or condition contained in a
bond, debenture, note, or other evidence of indebtedness or in any contract,
indenture, mortgage, loan agreement, joint venture, or other material agreement
or instrument to which the Company or any of the Subsidiaries is a party or by
which the Company or any of the Subsidiaries or any of their respective
properties may be bound, or is in violation of any law, order, rule, regulation,
writ, injunction, or decree of any government, governmental instrumentality, or
court, domestic or foreign, except where such violation would not have a
material adverse effect on the business, properties, operations, financial
conditions, income or business prospects of the Company and the Subsidiaries,
taken as a whole, as presently being conducted.
(d) Except as disclosed in the Prospectus, the Company and the
Subsidiaries own, or possess adequate rights to use, all patents, patent rights,
inventions, trade secrets, know-how, proprietary techniques, including processes
and substances, trademarks, service marks, trade names and copyrights described
or referred to in the Prospectus or owned or used by them or
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which are necessary for the conduct of their respective businesses as they are
presently or proposed to be conducted, except where the failure to own or
possess, such patents, patent rights, inventions, trade secrets, know-how,
proprietary techniques, including processes and substances, trademarks service
marks, trade names and copyrights would not have a material adverse effect on
the business, properties, operations, financial condition or income of the
Company and the Subsidiaries, taken as a whole. Except as disclosed in the
Prospectus, neither the Company nor any of the Subsidiaries has received notice
of infringement of or conflict with asserted rights of others with respect to
any patents, patent rights, inventions, trade secrets, know-how, proprietary
techniques, including processes and substances, trademarks, service marks,
tradenames or copyrights which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would materially adversely affect the
business, properties, operations, financial condition, income or business
prospects of the Company and the Subsidiaries, taken as a whole, as presently
being conducted or as proposed to be conducted.
(e) This Agreement has been duly authorized, executed and delivered
by the Company and is a valid and binding agreement enforceable against the
Company in accordance with its terms; the execution, delivery and performance of
this Agreement and the consummation of the transactions herein and therein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, (i) any material indenture,
mortgage, deed of trust, loan agreement, bond, debenture, note agreement, or
other evidence of indebtedness, lease, contract or other agreement or instrument
to which the Company or any of the Subsidiaries is a party or by which the
property of the Company or any of the Subsidiaries is bound, (ii) the corporate
charter or by-laws of the Company or any of the Subsidiaries, respectively, or
(iii) any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or of any of the
Subsidiaries or over the properties of the Company or any of the Subsidiaries;
and no consent, approval, authorization or order of any court or governmental
agency or body is required for the consummation by the Company of the
transactions herein contemplated, except such as may be required under the
Securities Act or under applicable state securities laws.
(f) Except as set forth in the Prospectus, there is not now, and as
of or prior to the First Closing Date there will not be, any action, suit or
proceeding, at law or in equity, against the Company by a private litigant, by
any Federal, state, or other commission, board or agency, or any proceedings
before any administrative agency pending or, to the knowledge of the Company,
threatened, wherein any unfavorable decision, ruling or finding could adversely
affect the business, properties, operations, financial condition, income or
business prospects of the Company and the Subsidiaries, taken as a whole, as
presently being conducted, or prevent consummation of the transactions
contemplated hereby.
(g) The capitalization of the Company as of December 31, 1996 is as
set forth under the caption "Capitalization" in the Registration Statement and
the Prospectus, and the Common Stock conforms to the description thereof set
forth under the caption "Description of Capital Stock" in the Registration
Statement and the Prospectus. The outstanding shares of Common Stock of the
Company have been duly authorized and validly issued and are fully-paid and
non-assessable. The Stock has been duly and validly authorized, and when issued
and paid
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for on the First Closing Date and the Option Closing Date (each as hereinafter
defined) will be duly and validly issued, fully paid and non-assessable; there
are no preemptive rights or other rights to subscribe for or to purchase, or any
restriction upon the voting or transfer of the Stock; and there are no
outstanding options, warrants or other rights, granted to or by the Company to
purchase shares of Common Stock or other securities of the Company other than
and described in the Prospectus, except for options for shares of Common Stock
granted after December 31, 1996, and, to the knowledge of the Company, no person
is a beneficial owner of five (5%) percent or more of the Common Stock of the
Company as of ________, ____ except as set forth in the Company's definitive
proxy statement for its 1996 annual meeting of stockholders. No holders of
shares of Common Stock or other securities of the Company has the right (other
than a right which has been waived) to have any securities owned by such holder
included in the Registration Statement. No further approval or authority of the
stockholders or the Board of Directors of the Company will be required for the
issuance and sale of the Shares as contemplated herein. A registration statement
relating to the Common Stock has been declared effective by the Commission
pursuant to the Exchange Act and the Common Stock is duly registered thereunder.
The Stock has been approved for designation on the National Association of
Securities Dealers, Inc. Automated Quotations/National Market ("Nasdaq National
Market"), subject to notice of issuance or sale of the Stock, as the case may
be. The Company knows of no reason or set of facts which is likely to result in
the termination of inclusion of such Stock in the Nasdaq National Market or the
inability of the Stock to continue to be included in the Nasdaq National Market.
(h) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, there has not been any material
adverse change in the business, properties, operations, financial condition,
income or business prospects of the Company and the Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, other than as set forth in the Registration Statement and the
Prospectus, and since such dates, neither the Company nor the Subsidiaries have
entered into any material transaction not referred to in the Registration
Statement and the Prospectus.
(i) The Commission has not issued an order preventing or suspending
the use of any Preeffective Prospectus or the Prospectus, nor has it instituted
proceedings for that purpose and each Preeffective Prospectus, at the time of
filing thereof, did 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. The Registration Statement, the Preeffective
Prospectus and the Prospectus comply, and on the First Closing Date and the
Option Closing Date the Prospectus will comply, in all material respects with
the provisions of the Securities Act and the rules and regulations of the
Commission thereunder. There are no contracts or documents of the Company or of
any of the Subsidiaries which would be required to be filed as exhibits to the
Registration Statement by the Securities Act or by the rules and regulations of
the Commission which have not been filed as exhibits to the Registration
Statement or incorporated by reference therein. On the Effective Date and at all
times subsequent thereto up to and including the First Closing Date and the
Option Closing Date, neither the Registration Statement nor any amendment
thereto, and neither the Preeffective Prospectus or the Prospectus, nor any
supplement thereto, contains or will contain any untrue statement of a
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material fact or omits or will omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; provided, however, that none of the representations and warranties
in this subsection (i) shall apply to statements in or omissions from the
Registration Statement, the Preeffective Prospectus or the Prospectus made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Underwriter specifically for use in the
preparation thereof.
(j) The financial statements of the Company, together with related
notes thereto as included or incorporated by reference in the Registration
Statement, the Preeffective Prospectus and the Prospectus, present fairly the
financial position and the results of operations of the Company, at the
indicated dates and for the indicated periods. Such financial statements have
been prepared in accordance with generally accepted accounting principles,
consistently applied throughout the periods involved, and all adjustments
necessary for a fair presentation of results for such periods have been made.
The summary and selected financial data included in the Registration Statement
and the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with the financial statements incorporated by
reference therein.
(k) The Company and the Subsidiaries have good and marketable title
to all the properties and assets reflected in the financial statements (or as
described in the Registration Statement) hereinabove described subject to no
liens, mortgages, pledges, charges or encumbrances of any kind except those
reflected in such financial statements (or as described in the Registration
Statement) or which are not material in amount. The Company and the Subsidiaries
occupy their leased properties under valid and binding leases conforming to the
description thereof set forth in the Registration Statement.
(l) All material leases, contracts and agreements referred to in or
filed as exhibits to the Registration Statement to which the Company or any of
the Subsidiaries is a party or by which the Company or any of the Subsidiaries
is bound, are in full force and effect or have expired or terminated in
accordance with their terms or have been superseded by leases, contracts or
agreements referred to in the Registration Statement or subsequently filed as
exhibits to the Registration Statement.
(m) The documents which are incorporated by reference in the
Registration Statement, the Preeffective Prospectus and the Prospectus or from
which information is so incorporated by reference, when they became effective or
were filed with the Commission, as the case may be, complied in all material
respects with the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations thereunder, and any documents so filed
and incorporated by reference subsequent to the Effective Date shall, when they
are filed with the Commission, conform in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder.
(n) The Company and each of the Subsidiaries have filed all Federal,
state and foreign tax returns which have been required to be filed (or have
obtained any required extensions in connection therewith) and have paid all
taxes indicated by said returns and all
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assessments received by them to the extent that such taxes have become due and
are not being contested in good faith, except where the failure to file such
returns would not have a material adverse effect on the business, properties,
operations, financial condition, income or business prospects of the Company and
the Subsidiaries, taken as a whole. The Company has no knowledge of any tax
deficiency which has been or might be asserted against it which would materially
and adversely affect the business or properties of the Company or any of its
Subsidiaries. To the knowledge of the Company, all tax liabilities are
adequately provided for on the books of the Company or its Subsidiaries.
(o) Each approval, consent, order, authorization, designation,
declaration, or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated has been obtained or made and is in full force and effect, except
such steps as may be required by the National Association of Securities Dealers,
Inc. (herein called the "NASD") or as may be necessary to qualify the Stock for
public offering by the Underwriters under state securities laws or filing
requirements under Rule 424(b) or Rule 430A.
(p) To the Company's knowledge, Coopers & Xxxxxxx L.L.P., who have
certified certain of the financial statements included or incorporated by
reference in the Registration Statement, are independent public accountants as
required by the Securities Act and the rules and regulations thereunder.
(q) The Company and its Subsidiaries are not, and do not intend to
conduct their business in a manner in which any of them would become, an
"investment company" as defined in Section 3(a) of the Investment Company Act of
1940, as amended ("Investment Company Act").
(r) The Company confirms as of the date hereof that it is in
compliance with all provisions of Section 1 of Laws of Florida, Chapter 92-198,
An Act Relating to Disclosure of Doing Business with Cuba, and the Company
further agrees that if it commences engaging in business with the government of
Cuba or with any person or affiliate located in Cuba after the date the
Registration Statement becomes or has become effective with the Commission or
with the Florida Department of Banking and Finance (the "Department"), whichever
date is later, or if the information reported in the Prospectus, if any,
concerning the Company's business with Cuba or with any person or affiliate
located in Cuba changes in any material way, the Company will provide the
Department notice of such business or change, as appropriate, in a form
acceptable to the Department.
(s) Neither the Company nor any of its officers, directors or
affiliates has taken or will take, directly or indirectly, any action designed
or intended to stabilize or manipulate the price of any security of the Company,
or which caused or resulted in, or which might in the future reasonably be
expected to cause or result in, stabilization or manipulation of the price of
any security of the Company.
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(t) The Company is not involved in any labor dispute nor is any such
dispute threatened. The Company is not aware that (A) any executive, key
employee or significant group of employees of the Company or any subsidiary
plans to terminate his or her employment with the Company or any such subsidiary
or (B) any such executive or key employee is subject to any noncompete,
nondisclosure, confidentiality, employment, consulting or similar agreement that
would be violated by the present or proposed business activities of the Company
and its subsidiaries. Neither the Company nor any subsidiary has or expects to
have any liability for any prohibited transaction or funding deficiency or any
complete or partial withdrawal liability with respect to any pension, profit
sharing or other plan which is subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), to which the Company or any
subsidiary makes or ever has made a contribution and in which any employee of
the Company or any subsidiary is or has ever been a participant. With respect to
such plans, the Company and each subsidiary are in compliance in all material
respects with all applicable provisions of ERISA.
(u) The Company and its Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are customary in the businesses in which they are engaged or propose
to engage after giving effect to the transactions described in the Prospectus;
and neither the Company nor any Subsidiary has any reason to believe that it
will not be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar insurers as may be
necessary to continue their business at a cost that would not materially and
adversely affect the condition, financial or otherwise, or the earnings,
business or operations of the Company and its Subsidiaries considered as a
whole.
(v) Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the Company any
brokerage or finder's fee or other fee or commission as a result of any of the
transactions contemplated by this Agreement.
(w) The Company and each of its Subsidiaries maintain a system of
internal 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 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.
(x) To the Company's knowledge, neither the Company nor any of its
Subsidiaries nor any employee or agent of the Company or any of its Subsidiaries
has made any payment of funds of the Company or any of its Subsidiaries or
received or retained any funds in violation of any law, rule or regulation,
which payment, receipt or retention of funds is of a character required to be
disclosed in the Prospectus.
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(y) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be deemed to
be a representation and warranty by the Company as to the matters covered
thereby.
(z) The Company and the Subsidiaries are in all material respects in
compliance with, and conduct their businesses in conformity with, all applicable
federal, state, local and foreign laws, rules and regulations or any court or
governmental agency or body, including without limitation those of the FDA; to
the knowledge of the Company, otherwise than as set forth in the Registration
Statement and the Prospectus, no prospective change in any of such federal or
state laws, rules or regulations has been adopted which, when made effective,
would have a material adverse effect on the operations of the Company and its
subsidiaries.
3. PURCHASE BY, AND SALE AND DELIVERY TO, UNDERWRITERS - CLOSING DATES.
The Company agrees to sell to the Underwriters the Firm Stock, and on the basis
of the representations, warranties, covenants and agreements herein contained,
but subject to the terms and conditions herein set forth, the Underwriters
agree, severally and not jointly, to purchase the Firm Stock from the Company,
the number of shares of Firm Stock to be purchased by each Underwriter being set
opposite its name in SCHEDULE A, subject to adjustment in accordance with
Section 12 hereof.
The purchase price per share to be paid by the Underwriters to the Company
will be $_____ per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 12:00 noon, Boston time, on the second full business day preceding the First
Closing Date (as defined below) or, if no such direction is received, in the
names of the respective Underwriters or in such other names as Cowen may
designate (solely for the purpose of administrative convenience) and in such
denominations as Cowen may determine, against payment of the aggregate Purchase
Price therefor by certified or official bank check or checks in Clearing House
funds (next day funds), payable to the order of the Company, all at the offices
of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, High Street Tower, 000 Xxxx Xxxxxx, Xxxxxx,
XX 00000. The time and date of the delivery and closing shall be at 10:00 A.M.,
Boston time, on _________, 1997, in accordance with Rule 15c6-1 of the Exchange
Act. The time and date of such payment and delivery are herein referred to as
the "First Closing Date." The First Closing Date and the location of delivery
of, and the form of payment for, the Firm Stock may be varied by agreement
between the Company and Cowen. The First Closing Date may be postponed pursuant
to the provisions of Section 12.
The Company shall make the certificates for the Firm Stock available to
the Representatives for examination on behalf of the Underwriters not later than
10:00 A.M., Boston time, on the business day preceding the First Closing Date at
the offices of Xxxxx & Company, Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
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It is understood that Cowen, Bear, Xxxxxxx, Xxxxxxxxx or X.X. Xxxxxx,
individually and not as Representatives of the several Underwriters, may (but
shall not be obligated to) make payment to the Company on behalf of any
Underwriter or Underwriters, for the Stock to be purchased by such Underwriter
or Underwriters. Any such payment by Cowen, Xxxxxxxxx or Bear, Xxxxxxx, shall
not relieve such Underwriter or Underwriters from any of its or their other
obligations hereunder.
The several Underwriters agree to make a public offering of the Firm Stock
at the public offering price as soon after the effectiveness of the Registration
Statement as in their judgment is advisable. The Representatives shall promptly
advise the Company of the making of the initial public offering.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Company hereby grants to the Underwriters an option to purchase an aggregate of
up to 375,000 additional shares of Common Stock. The price per share to be paid
for the Optional Stock shall be the Purchase Price. The option granted hereby
may be exercised as to all or any part of the Optional Stock at any time, and
from time to time, not more than thirty (30) days subsequent to the effective
date of this Agreement. No Optional Stock shall be sold and delivered unless the
Firm Stock previously has been, or simultaneously is, sold and delivered. The
right to purchase the Optional Stock or any portion thereof may be surrendered
and terminated at any time upon notice by the Underwriters to the Company.
The option granted hereby may be exercised by the Underwriters by giving
written notice from Cowen to the Company setting forth the number of shares of
the Optional Stock to be purchased by them and the date and time for delivery of
and payment for the Optional Stock. Each date and time for delivery of and
payment for the Optional Stock (which may be the First Closing Date, but not
earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than ten (10) business days after
written notice is given. (The Option Closing Date and the First Closing Date are
herein called the "Closing Dates".) All purchases of the Optional Stock from the
Company shall be made on a pro rata basis. The Optional Stock shall be purchased
for the account of each Underwriter in the same proportion as the number of
shares of Firm Stock set forth opposite such Underwriter's name in SCHEDULE A
hereto bears to the total number of shares of Firm Stock (subject to adjustment
by the Underwriters to eliminate odd lots). Upon exercise of the option by the
Underwriters, the Company agrees to sell to the Underwriters the number of
shares of Optional Stock set forth in the written notice of exercise and the
Underwriters agree, severally and not jointly and subject to the terms and
conditions herein set forth, to purchase the number of such shares determined as
aforesaid.
The Company will deliver the Optional Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives may direct by notice in writing to the Company given at
or prior to 12:00 Noon, Boston Time, on the second full business day preceding
the Option Closing Date or, if no such direction is received, in the names of
the respective Underwriters or in such other names as Cowen may
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designate (solely for the purpose of administrative convenience) and in such
denominations as Cowen may determine), against payment of the aggregate Purchase
Price therefor by certified or official bank check or checks in Clearing House
funds (next day funds), payable to the order of the Company all at the offices
of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, High Street Tower, 000 Xxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000. The Company shall make the certificates for the Optional
Stock available to the Underwriters for examination not later than 10:00 A.M.,
Boston Time, on the business day preceding the Option Closing Date at the
offices of Xxxxx & Company, Xxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The
Option Closing Date and the location of delivery of, and the form of payment
for, the Optional Stock may be varied by agreement between the Company and
Cowen. The Optional Closing Date may be postponed pursuant to the provisions of
Section 12.
4. COVENANTS AND AGREEMENTS OF THE COMPANY. The Company covenants and
agrees with the several Underwriters that:
(a) The Company will (i) if the Company and the Representatives have
determined not to proceed pursuant to Rule 430A, use its best efforts to cause
the Registration Statement to become effective, (ii) if the Company and the
Representatives have determined to proceed pursuant to Rule 430A, use its best
efforts to comply with the provisions of and make all requisite filings with the
Commission pursuant to Rule 430A and Rule 424 of the Rules and Regulations and
(iii) if the Company and the Representatives have determined to deliver
Prospectuses pursuant to Rule 434 of the Rules and Regulations, to use its best
efforts to comply with all the applicable provisions thereof.
(b) The Company will promptly notify each Underwriter in the event
of (i) the request by the Commission for amendment of the Registration Statement
or for supplement to the Prospectus or for any additional information, (ii) the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement, (iii) the institution or notice of intended institution
of any action or proceedings for that purpose, (iv) the receipt by the Company
of any notification with respect to the suspension of the qualification of the
Stock for sale in any jurisdiction or any action by the NASD suspending or
terminating the inclusion of the Stock in the Nasdaq National Market, or (v) the
receipt by the Company of notice of the initiation or threat of any proceedings
for such purpose. The Company will make every reasonable effort to prevent the
issuance of such a stop order and, if such an order shall at any time be issued,
to obtain the withdrawal thereof at the earliest possible moment.
(c) The Company will (i) on or before the First Closing Date,
deliver to each of you a signed copy of the Registration Statement as originally
filed and each amendment thereto filed prior to the time the Registration
Statement becomes effective and, promptly upon the filing thereof, a signed copy
of each post-effective amendment, if any, to the Registration Statement
(together with, in each case, all exhibits thereto unless previously furnished
to you), (ii) deliver to each of you additional conformed copies of each of the
foregoing (but without exhibits), (iii) deliver to each of you, at such office
or offices you may designate, as many copies of the Prospectus as you may
reasonably request, and (iv) thereafter from time to time during the period in
which a prospectus is required by law to be delivered by an Underwriter or
dealer, likewise
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send to each of you as many additional copies of the Prospectus and as many
copies of any supplement to the Prospectus and of any amended Prospectus, filed
by the Company with the Commission, as you may reasonably request for the
purposes contemplated by the Securities Act. The foregoing delivery requirements
shall include any document filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus. To the extent applicable, the
copies of the Registration Statement and each amendment thereto (including all
exhibits filed therewith), any Preliminary Prospectus or Prospectus (in each
case, as amended or supplemented) furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to XXXXX, except to the extent permitted by Regulation S-T.
(d) If at any time during the period in which a Prospectus is
required by law to be delivered by any Underwriter or dealer any event relating
to or affecting the Company, or of which the Company shall be advised in writing
by you, shall occur as a result of which it is necessary, in the opinion of
counsel for the Company or of counsel for the Underwriters, (i) to file under
the Exchange Act any document which would be deemed to be incorporated by
reference in the Prospectus in order to comply with the Securities Act or the
Exchange Act, or (ii) to supplement or amend the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser of the Stock, the Company will forthwith prepare
and file with the Commission (x) a document to effect such compliance, or (y) a
supplement to the Prospectus or an amended prospectus so that the Prospectus as
so supplemented or amended will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time such
Prospectus is delivered to such purchaser, not misleading. The Company
authorizes the Underwriters and all dealers to whom any of the Stock may be sold
by the Underwriters to use the Prospectus, as from time to time amended or
supplemented, in connection with the sale of the Stock in accordance with the
applicable provisions of the Securities Act and the applicable rules and
regulations thereunder for such period.
(e) Prior to the filing thereof with the Commission, the Company
will submit to you, for your approval after reasonable notice thereof, such
approval not to be unreasonably withheld or delayed, a copy of any
post-effective amendment to the Registration Statement proposed to be filed or a
copy of any document proposed to be filed under the Exchange Act before the
termination of the offering of the Shares by the Underwriters if such document
would be deemed to be incorporated by reference into the Registration Statement
or Prospectus.
(f) The Company will cooperate, when and as requested by you, in the
qualification of the Stock for offer and sale under the Securities or blue sky
laws of such jurisdictions as you may designate and, during the period in which
a Prospectus is required by law to be delivered by an Underwriter or dealer, in
keeping such qualifications in good standing under said securities or blue sky
laws; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or to take any action which
would subject it to taxation as doing business in a jurisdiction where it is not
now doing business. The Company
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will, from time to time, prepare and file such statements, reports, and other
documents as are or may be required to continue such qualifications in effect
for so long a period (not in excess of 180 days after the commencement of the
public offering of the Stock by the Underwriters) as you may reasonably request
for distribution of the Stock.
(g) During a period of two years commencing with the date hereof,
the Company will furnish to the Underwriters copies of all periodic and special
reports furnished to stockholders of the Company and of all information,
documents and reports filed with the Commission. The Company will deliver to the
Underwriters similar information with respect to any significant subsidiaries,
if any, as that term is defined in the rules and regulations of the Commission,
which are not consolidated in the Company's financial statements. To the extent
applicable, the copies of the Registration Statement and each amendment thereto
(including all exhibits filed therewith), any Preliminary Prospectus or
Prospectus (in each case, as amended or supplemented) furnished to the
Underwriters will be identical tot he electronically transmitted copies thereof
filed with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(h) Not later than the 45th day following the end of the fiscal
quarter first occurring after the first anniversary of the "effective date of
the registration statement" (as defined in Rule 158(c) under the Securities
Act), the Company will make generally available to its security holders in the
manner contemplated by Rule 158(b) under the Securities Act an earning statement
in accordance with Section 11(a) of the Securities Act and the rules and
regulations thereunder.
(i) The Company agrees that, without the prior written consent of
Xxxxx & Company on behalf of the Representatives and the Underwriters, the
Company will not sell, offer, contract to sell, grant any option to purchase or
otherwise dispose of any shares of Common Stock or any securities convertible
into or exchangeable for or warrants to purchase Common Stock for a period of 90
days after the effective date of the Registration Statement, other than (i) the
Stock to be sold to the Underwriters pursuant to this Agreement, (ii) shares of
Common Stock issued upon the exercise of options granted under the Company's
199__ Stock Option Plan (the "Option Plan") or upon the exercise of warrants
previously issued, and (iii) options to purchase Common Stock granted under the
Option Plan and (iv) shares of Common Stock issued under the Company's Employee
Stock Purchase Plan. For purposes of this Section 6(k) a sale, offer, option or
disposition shall be deemed to include any sale to an institution which can,
following such sale, sell Common Stock to the public in reliance on Rule 144A,
but shall not include a sale, offer, option or disposition under circumstance
where the holder may not, for a period of at least 90 days after the
commencement of the public offering of the Stock by the Underwriters, sell the
shares of Common Stock acquired by the holder to the public.
(j) The Company agrees that, without the prior written consent of
Cowen on behalf of the Representatives and the Underwriters, the Company will
not register under the Securities Act for a period of 90 days after the
commencement of the public offering of the Stock by the Underwriters any shares
of Common Stock issuable upon exercise of options granted under the Option Plan
or any other benefit plans.
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(k) The Company shall cause each officer and director of the Company
that has not furnished to you such a letter or letters prior to the date of this
Agreement to furnish to you, on the date of this Agreement, a letter or letters,
in form and substance satisfactory to counsel for the Underwriters, pursuant to
which each such person shall agree not to offer for sale, sell, distribute or
otherwise dispose of any shares of Common Stock during the 90 days following the
Effective Date, except with the prior written consent of Cowen.
(l) The Company will use the net proceeds received by it from the
sale of the Stock being sold by it in the manner specified in the Prospectus.
5. PAYMENT OF EXPENSES. (a) The Company agrees to pay all costs and
expenses incident to the performance of the obligations of the Company under
this Agreement, including all costs and expenses incident to (i) the
preparation, printing and filing with the Commission and the NASD of the
Registration Statement, any Preeffective Prospectus and the Prospectus
(including, without limitation the fees and expenses of the Company's
accountants and counsel), (ii) the furnishing to the Underwriters of copies of
any Preeffective Prospectus and of the several documents required by Section
4(c) to be so furnished, (iii) the preparation, printing and filing of all
supplements and amendments to the Prospectus referred to in Section 4(d), (iv)
the furnishing to the Underwriters of the reports and information referred to
Section 4(g), (v) the printing, issuance of stock certificates, including the
transfer agent's fees, (vi) the reproduction of this Agreement and related
documents delivered to the Underwriters and (vii) the costs of listing the Stock
on the Nasdaq National Market.
(b) The Company agrees to reimburse you for blue sky fees and
related disbursements (including costs of printing memoranda for the
Underwriters) paid by or for the account of the Underwriters or their counsel in
qualifying the Stock under the state securities or blue sky laws and for fees
and related disbursements (including legal fees not to exceed $12,000 and
disbursements of counsel) in connection with such filings as may be required by
the NASD.
6. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to indemnify
and hold harmless each Underwriter and each person (including each partner or
officer thereof) who controls any Underwriter within the meaning of Section 15
of the Securities Act from and against any and all losses, claims, damages or
liabilities, joint or several, to which such indemnified parties or any of them
may become subject under the Securities Act, the Exchange Act, or the common law
or otherwise, and the Company agrees to reimburse each such Underwriter and
controlling person for any legal or other expenses (including, except as
otherwise hereinafter provided, reasonable fees and disbursements of counsel)
incurred by the respective indemnified parties in connection with defending
against any such losses, claims, damages or liabilities or in connection with
any investigation or inquiry of, or other proceedings which may be brought
against, the respective indemnified parties, in each case arising out of or
based upon (i) any untrue statement or alleged untrue statement made by the
Company in Section 2 hereof, or (ii) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement (including
the Prospectus as part thereof and any document filed under the Exchange Act and
incorporated by reference therein) or any post-effective amendment
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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 a
material fact contained in any Preeffective Prospectus or the Prospectus (as
amended or as supplemented if the Company shall have filed with Commission any
amendment thereof or supplement thereto, including any document filed under the
Exchange Act and incorporated by reference therein), or the omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or (iv) any untrue statement or alleged untrue statement
of a material fact contained in any blue sky application or other document
executed by the Company specifically for that purpose or based upon written
information furnished by the Company filed in any state or other jurisdiction in
order to qualify any or all of the Stock under the securities laws thereof (any
such application, document or information being hereinafter called a "Blue Sky
Application"), or the omission or alleged omission to state therein a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, provided, however,
that (i) the indemnity agreement of the Company contained in this Section 6(a)
shall not apply to any such losses, claims, damages, liabilities or expenses if
such statement or omission was made in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Underwriter expressly for use in any Preeffective Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement thereto, or any
Blue Sky Application and (ii) the indemnity agreement contained in this Section
6(a) with respect to any Preeffective Prospectus shall not inure to the benefit
of any Underwriter from whom the person asserting any such losses, claims,
damages, liabilities or expenses purchased the Stock which is the subject
thereof (or the benefit of any person controlling such Underwriter) if at or
prior to the written confirmation of the sale of such Stock a copy of the
Prospectus (or the Prospectus as amended or supplemented) was not sent or
delivered to such person and the untrue statement or omission of a material fact
contained in such Preeffective Prospectus was corrected in the Prospectus (or
the Prospectus was amended or supplemented) unless such failure is the result of
noncompliance by the Company with Section 6(c) thereof.
The indemnity agreement of the Company contained in this Section 6(a) and
the representations and warranties of the Company contained in Section 2 hereof
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, each of its officers who signs the Registration Statement on his
own behalf or pursuant to a power of attorney, each of its directors, and each
person (including each partner or officer thereof), if any, who controls the
Company within the meaning of Section 15 of the Securities Act, from and against
any and all losses, claims, damages or liabilities, joint or several, to which
such indemnified parties or any of them may become subject under the Securities
Act, the Exchange Act, or the common law or otherwise and to reimburse each of
them for any legal or other expenses (including, except as otherwise hereinafter
provided, reasonable fees and disbursements of counsel) incurred by the
respective indemnified parties in connection with defending against any such
losses, claims, damages or liabilities or in
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connection with any investigation or inquiry of, or other proceedings which may
be brought against, the respective indemnified parties, in each case arising out
of or based upon (i) any untrue statement of alleged untrue statement of a
material fact contained in the Registration Statement (including the Prospectus
as a part thereof), or any post-effective amendment 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 (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preeffective Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or supplement
thereto), or the omission or alleged omission to state therein a material fact
necessary in order to make the statement therein, in the light of circumstances
under which they were made, not misleading, or (iii) any Blue Sky Application,
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, in
each case only if such statement or omission was made in reliance upon and in
conformity with information furnished in writing as herein stated or otherwise
furnished in writing to the Company by or on behalf of such indemnifying
Underwriter expressly for use in any Preeffective Prospectus, the Registration
Statement, the Prospectus, or any such amendment or supplement thereto, or any
Blue Sky Application.
The indemnity agreement of each Underwriter contained in this Section 6(b)
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any indemnified party and shall survive
the delivery of and payment for the Stock.
(c) Each party indemnified under the provisions of Section 6(a) or
6(b) agrees that, upon the service of a summons or other initial legal process
upon it in any action or suit instituted against it or upon its receipt of
written notification of the commencement of any investigation or inquiry of, or
proceedings against, it in respect of which indemnity may be sought on account
of any indemnity agreement contained in such paragraphs, it will promptly give
written notice (herein called the "Notice") of which service or notification to
the party or parties from whom indemnification may be sought hereunder. No
indemnification provided for in such paragraphs shall be available to any party
who shall fail so to give the Notice if the party to whom such Notice was not
given was unaware of the action, suit, investigation, inquiry or proceedings to
which the Notice would have related and was prejudiced by the failure to give
the Notice, but the omission to notify such indemnifying party or parties of any
such service or notification shall not relieve such indemnifying party or
parties from any liability which it or they may have to the indemnified party
for contribution or otherwise than on account of such indemnity agreement. Any
indemnifying party shall be entitled at its own expense to participate in the
defense of any action, suit or proceedings against, or investigation or inquiry
of, any indemnified party. Any indemnifying party shall be entitled, if it so
elects within a reasonable time after receipt of the Notice by giving written
notice (herein called the "Notice of Defense") to the indemnified party, to
assume (alone or in conjunction with any other indemnifying party or parties)
the entire defense of such action, suit, investigation, inquiry or proceedings,
in which event such defense shall be conducted, at the expense of the
indemnifying party or parties, by counsel chosen by such indemnifying party or
parties and reasonably satisfactory to the indemnified party or parties;
provided, however, that (i) if the indemnified party or parties reasonably
determine that there may be a conflict between the positions of the indemnifying
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party or parties and of the indemnified party or parties in conducting the
defense of such action, suit, investigation, inquiry or proceedings or that
there may be legal defenses available to such indemnified party or parties
different from or in addition to those available to the indemnifying party or
parties, then counsel for the indemnified party or parties shall be entitled to
conduct the defense to the extent reasonably determined by such counsel to be
necessary to protect the interests of the indemnified party or parties, and (ii)
in any event, the indemnified party or parties shall be entitled to have counsel
chosen by such indemnified party or parties participate in, but not conduct, the
defense. If, within a reasonable time after receipt of the Notice, an
indemnifying party gives a Notice or Defense and the counsel chosen by the
indemnifying party or parties is reasonably satisfactory to the indemnified
party or parties, the indemnifying party or parties will not be liable under
Section 6(a) through 6(c) for any legal or other expenses subsequently incurred
by the indemnified party or parties in connection with the defense of the
action, suit, investigation, inquiry or proceedings, except that (A) the
indemnifying party or parties shall bear the legal and other expenses incurred
in connection with the conduct of the defense as referred to in clause (i) of
the provision to the preceding sentence, and (B) the indemnifying party or
parties shall bear such other expenses as it or they have authorized to be
incurred by the indemnified party or parties. If, within a reasonable time after
receipt of the Notice, no Notice of Defense has been given, the indemnifying
party or parties shall be responsible for any legal or other expenses incurred
by the indemnified party or parties in connection with the defense of the
action, suit, investigation, inquiry or proceedings.
(d) Notwithstanding the above, in no event shall the indemnifying
parties be responsible for fees and expenses of more than one counsel for all
indemnified parties in connection with one action (or separate but similar or
related actions) arising out of the same general allegations or circumstances.
(e) If the indemnification provided for in this Section 6 is
unavailable or insufficient to hold harmless an indemnified party under Section
6(a) or 6(b) above although applicable in accordance with its terms, then each
such indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of the losses, claims, damages or liabilities referred to in Sections 6(a) or
6(b) above (i) in such proportion as is appropriate to reflect the relative
benefits received by each indemnifying party from the offering of the Stock or
(ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
each indemnifying party in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities or actions in respect
thereof, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Underwriters shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of
the Stock (before deducting expenses) received by the Company and the total
underwriting discounts and commissions received by the Underwriters, as set
forth in the table on the cover page of this Prospectus, bear to the aggregate
public offering price of the Stock. Relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by each indemnifying party and the parties'
relative
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intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission.
The parties agree that it would not be just and equitable if contributions
pursuant to this Section 6(e) were to be determined by pro-rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to in the first sentence of this Section 6(e). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to in
the first sentence of this Section 6(e) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating, preparing to defend or defending against any action or claim
which is the subject of this Section 6(e). Notwithstanding the provisions of
this Section 6(e), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions applicable to the Stock
purchased by such Underwriter. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(g) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations in this Section 6(e) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the service of a
summons or other initial legal process upon it in any action instituted against
it in respect to which contribution may be sought, it shall promptly give
written notice of such service to the party or parties from whom contributions
may be sought, but the omission so to notify such party or parties of any such
service shall not relieve the party from whom contribution may be sought of any
obligation it may have hereunder or otherwise (except as specifically provided
in Section 6(c) hereof).
(f) No indemnifying party will, without the prior written consent of
the indemnified party, settle or compromise or consent to the entry of any
judgment in any pending or threatened claim, action, suit or proceedings in
respect of which indemnification may be sought hereunder (whether or not such
indemnifying party or any person who controls such indemnifying party within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act is
a party to such claim, action, suit or proceeding) unless the indemnifying party
uses its reasonable efforts to insure that such settlement, compromise or
consent includes an unconditional release of such indemnified party and each
such controlling person from all liability arising out of such claim, action,
suit or proceedings.
7. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company or any of its officers or directors or
any controlling person, and shall survive delivery of and payment for the Stock.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of
the several Underwriters hereunder shall be subject to the accuracy, at and
(except as otherwise stated
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herein) as of the date hereof and at and as of each of the Closing Dates,
respectively, of the representations and warranties made herein by the Company,
to compliance at and as of each of the Closing Dates, respectively, by the
Company with its covenants and agreements herein contained and other provisions
hereof to be satisfied at or prior to each of the Closing Dates, and to the
following additional conditions:
(a) The Registration Statement shall have become effective under the
Securities Act and no stop order suspending the effectiveness thereof shall have
been issued and no proceedings for that purpose shall have been initiated or, to
the knowledge of the Company or the Representatives, shall be threatened by the
Commission, and any request for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the reasonable satisfaction of the
Representatives. If the filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b) or Rule 434 of the Rules and Regulations, such
filing shall have been made in the manner and within the time period required by
Rule 424(b) and Rule 434 of the Rules and Regulations, as the case may be.
(b) The Representatives shall have been satisfied that there shall
not have occurred any change, on a consolidated basis, prior to each of the
Closing Dates in the condition (financial or otherwise), properties, business,
management, prospects, net worth or results of operations of the Company and its
subsidiaries considered as a whole, or any change in the capital stock,
short-term or long-term debt of the Company and its subsidiaries considered as a
whole, such that (i) the Registration Statement or the Prospectus, or any
amendment or supplement thereto, contains an untrue statement of fact which, in
the opinion of the Representatives, is material, or omits to state a fact which,
in the opinion of the Representatives, is required to be stated therein or is
necessary to make the statements therein not misleading, or (ii) it is
unpracticable in the reasonable judgment of the Representatives to proceed with
the public offering or purchase the Stock as contemplated hereby.
(c) The Representatives shall be satisfied that no legal or
governmental action, suit or proceeding affecting the Company which is material
and adverse to the Company or which affects or may affect the Company's ability
to perform its obligations under this Agreement shall have been instituted or
threatened and there shall have occurred no material adverse development in any
existing such action, suit or proceeding.
(d) At the time of execution of this Agreement, the Representatives
shall have received from Coopers & Xxxxxxx L.L.P., independent certified public
accountants, a letter, dated the date hereof, in form and substance satisfactory
to the Underwriters.
(e) The Representatives shall have received from Coopers & Xxxxxxx
L.L.P., independent certified public accountants, letters, dated as of each of
the Closing Dates, respectively, to the effect that such accountants reaffirm,
as of each such Closing Date, and as though made on such Closing Date, the
statements made in the letter furnished by such accountants pursuant to
paragraph (d) of this Section 8.
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(f) The Representatives shall have received from Warner & Xxxxxxxxx
LLP, counsel for the Company, opinions, dated as of each of the Closing Dates,
respectively, to the effect set forth in EXHIBIT I hereto.
(g) The Representatives shall have received from Fish & Neave,
patent counsel for the Company, opinions, dated as of each of the Closing Dates,
respectively, to the effect set forth in EXHIBIT II hereto.
(h) The Representatives shall have received from Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP, counsel for the Underwriters, their opinion or opinions dated,
respectively, the Closing Dates with respect to the incorporation of the
Company, the validity of the Stock, the Registration Statement and the
Prospectus and such other related matters as it may reasonably request, and the
Company shall have furnished to such counsel such documents as they may request
for the purpose of enabling them to pass upon such matters.
(i) The Representatives shall have received certificates, dated as
of each of the Closing Dates, respectively, of the chief executive officer or
the President and the chief financial or accounting officer of the Company to
the effect that:
(i) No stop order suspending the effectiveness of
the Registration Statement has been issued, and, to the best of the
knowledge of the signers, no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities Act;
(ii) Neither any Preeffective Prospectus, as of
its date, nor the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, as of the time when the
Registration Statement became effective and at all times subsequent
thereto up to the delivery of such certificate, included any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading;
(iii) Subsequent to the respective dates as of
which information is given in the Registration Statement and the
Prospectus, and except as set forth or contemplated in the
Prospectus, neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or
contingent, nor entered into any material transactions, in each case
not in the ordinary course of business, or any change in the capital
stock (except pursuant to its stock option plans), short-term or
long-term debt of the Company and its subsidiaries considered as a
whole;
(iv) The representations and warranties of the
Company in this Agreement are true and correct at and as of each of
the Closing Dates, respectively, and the Company has complied with
all the agreements and
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performed or satisfied all the conditions on its part to be
performed or satisfied at or prior to each such Closing Date; and
(v) Since the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as disclosed in or contemplated by the
Prospectus, (i) there has not been any material adverse change or a
development involving a material adverse change in the condition
(financial or otherwise), properties, business, management,
prospects, net worth or results of operations of the Company and its
subsidiaries considered as a whole; (ii) the business and operations
conducted by the Company and its subsidiaries have not sustained a
loss by strike, fire, flood, accident or other calamity (whether or
not insured) of such a character as to interfere materially with the
conduct of the business and operations of the Company and its
subsidiaries considered as a whole; (iii) no legal or governmental
action, suit or proceeding is pending or threatened against the
Company which is material to the Company, whether or not arising
from transactions in the ordinary course of business, or which may
materially and adversely affect the transactions contemplated by
this Agreement; (iv) since such dates and except as so disclosed,
the Company has not incurred any material liability or obligation,
direct, contingent or indirect, made any change in its capital stock
(except pursuant to its stock plans), made any material change in
its short-term or funded debt or repurchased or otherwise acquired
any of the Company's capital stock; and (v) the Company has not
declared or paid any dividend, or made any other distribution, upon
its outstanding capital stock payable to stockholders of record on a
date prior to such Closing Date.
(j) The Company shall have furnished to the Representatives such
additional certificates as the Representatives may have reasonably requested as
to the accuracy, at and as of each of the Closing Dates, of the representations
and warranties made herein by it and as to compliance at and as of each of the
Closing Dates by it with its covenants and agreements herein contained and other
provisions hereof to be satisfied at or prior to such Closing Dates, and as to
satisfaction of the other conditions to the obligations of the Underwriters
hereunder.
(k) Cowen shall have received the written agreements of the
officers, directors and certain holders of Common Stock that, without the prior
consent of Cowen, each will not offer, sell, assign, transfer, encumber,
contract to sell, grant an option to purchase or otherwise dispose of, other
than by operation of law, gifts, pledges or dispositions by estate
representatives, any shares of Common Stock (including, without limitation, (i)
any securities convertible into shares of Common Stock and (ii) any Common Stock
of the Company which may be deemed to be beneficially owned by the undersigned
in accordance with the Rules and Regulations) during the 90 days following the
effective date of the Registration Statement.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the Representatives. The Company will furnish to the
Representatives conformed copies of such opinions, certificates, letters and
other documents as the Representatives shall reasonably request. If any of the
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conditions hereinabove provided for in this Section shall not have been
satisfied when and as required by this Agreement, this Agreement may be
terminated by the Representatives by notifying the Company of such termination
in writing or by telegram at or prior to the Closing Dates, but Cowen shall be
entitled to waive any of such conditions.
9. EFFECTIVE DATE. This Agreement shall become effective immediately as to
Sections 5, 6, 7, 9, 10, 11, 13, 14, 15, 16 and 17 and, as to all other
provisions, at 11:00 a.m. Boston time on the first full business day following
the effectiveness of the Registration Statement or at such earlier time after
the Registration Statement becomes effective as the Representatives may
determine on and by notice to the Company or by release of any of the Stock for
sale to the public. For the purposes of this Section 9, the Stock shall be
deemed to have been so released upon the release for publication of any
newspaper advertisement relating to the Stock or upon the release by the
Representatives of telegrams (i) advising Underwriters that the shares of Stock
are released for public offering or (ii) offering the Stock for sale to
securities dealers, whichever may occur first.
10. TERMINATION. This Agreement (except for the provisions of Section 5)
may be terminated by the Company at any time before it becomes effective in
accordance with Section 9 by notice to the Representatives and may be terminated
by the Representatives at any time before it becomes effective in accordance
with Section 9 by notice to the Company. In the event of any termination of this
Agreement under this or any other provision of this Agreement, there shall be no
liability of any party to this Agreement to any other party, other than as
provided in Sections 5, 6 and 11 and other than as provided in Section 12 as to
the liability of defaulting Underwriters.
This Agreement may be terminated after it becomes effective by the
Representatives by notice to the Company (i) if at or prior to each of the
Closing Dates trading in securities on the Nasdaq National Market System shall
have been suspended or minimum or maximum prices shall have been established on
any such exchange or market, or a banking moratorium shall have been declared by
New York or United States authorities; (ii) if trading of any securities of the
Company shall have been suspended on any exchange or in any over-the-counter
market; (iii) if at or prior to each of the Closing Dates there shall have been
(A) an outbreak or escalation of hostilities between the United States and any
foreign power or of any other insurrection or armed conflict involving the
United States or (B) any change in financial markets or any calamity or crisis
which, in the judgment of the Representatives, makes it impractical or
inadvisable to offer or sell the Firm Stock or Optional Stock, as applicable, on
the terms contemplated by the Prospectus; (iv) if there shall have been any
development or prospective development involving particularly the business or
properties or securities of the Company or any of its subsidiaries or the
transactions contemplated by this Agreement, which, in the judgment of the
Representatives, makes it impracticable or inadvisable to offer or deliver the
Firm Stock or the Optional Stock, as applicable, on the terms contemplated by
the Prospectus; (v) if there shall be any litigation or proceeding, pending or
threatened, which, in the judgment of the Representatives, makes it
impracticable or inadvisable to offer or deliver the Firm Stock or Optional
Stock, as applicable, on the terms contemplated by the Prospectus; or (vi) if
there shall have occurred any of the events specified in the immediately
preceding clauses (i) - (v) together with any other such event that makes it, in
the judgment of the Representatives, impractical or inadvisable to offer or
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deliver the Firm Stock or Optional Stock, as applicable, on the terms
contemplated by the Prospectus.
11. REIMBURSEMENT OF UNDERWRITERS. Notwithstanding any other provisions
hereof, if this Agreement shall not become effective by reason of any election
of the Company pursuant to the first paragraph of Section 10 or shall be
terminated by the Representatives under Section 8 or Section 10, the Company
will bear and pay the expenses specified in Section 5 hereof and, in addition to
its obligations pursuant to Section 6 hereof, the Company will reimburse the
reasonable out-of-pocket expenses of the several Underwriters (including
reasonable fees and disbursements of counsel for the Underwriters) incurred in
connection with this Agreement and the proposed purchase of the Stock, and
promptly upon demand, the Company will pay such amounts to the Representatives.
12. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the Representatives and the Company for the
purchase of such shares by other persons are not made within forty-eight (48)
hours after such default, this Agreement shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 12, (i) the Company
shall have the right to postpone the Closing Date[s] for a period of not more
than five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 12 shall be without liability on the part of
any non-defaulting Underwriter or the Company, except for expenses to be paid or
reimbursed pursuant to Section 5 and except for the provisions of Section 6.
13. NOTICES. All communications hereunder shall be in writing and, if sent
to the Underwriters shall be mailed, delivered or telegraphed and confirmed to
you, as their Representatives, c/o Cowen & Company at Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 except that notices given to an Underwriter pursuant to
Section 6 hereof shall be sent to such
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Underwriter at the address furnished by the Representatives or, if sent to the
Company, shall be mailed, delivered or telegraphed and confirmed c/o President,
Vertex Pharmaceuticals Incorporated, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000.
14. SUCCESSORS. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company and their respective
successors and legal representatives. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence and the persons entitled to the
benefits of the provisions of Section 6 any legal or equitable right, remedy or
claim under or in respect of this Agreement, or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of
no other person.
15. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement,
you will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by Cowen, as Representative, will be binding on all the
Underwriters.
17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
18. GENERAL. This Agreement constitutes the entire agreement of the
parties to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect
to the subject matter hereof.
In this Agreement, the masculine, feminine and neuter genders and the
singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representatives.
19. COUNTERPARTS. This Agreement may be signed in two (2) or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
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If the foregoing correctly sets forth our understanding, please indicate
your acceptance thereof in the space provided below for that purpose, whereupon
this letter and your acceptance shall constitute a binding agreement between us.
Very truly yours,
VERTEX PHARMACEUTICALS INCORPORATED
By:
--------------------------------
President
Accepted and delivered
as of the date first above written.
XXXXX & COMPANY
BEAR, XXXXXXX & CO. INC.
XXXXXXXXX, XXXXXXXX & COMPANY LLC
X.X. XXXXXX SECURITIES INC.
Acting on their own behalf
and as Representatives of
several Underwriters
referred to in the
foregoing Agreement.
By: XXXXX & COMPANY
By: Cowen Incorporated
its general partner
By:
---------------------------------
Title:
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SCHEDULE A
NUMBER OF
FIRM SHARES
NAME TO BE PURCHASED
---- ---------------
Xxxxx & Company............................................. _______
Bear, Xxxxxxx & Co. Inc..................................... _______
Xxxxxxxxx, Xxxxxxxx & Company LLC........................... _______
X.X. Xxxxxx Securities Inc. _______
TOTAL....................................................... 2,500,000
=========
27
EXHIBIT I
---------
The opinion of Warner & Xxxxxxxxx LLP, counsel for the Company, shall be
as follows:
(i) Each of the Company and its Subsidiaries has been duly organized and
is validly existing as a corporation in good standing under the laws of the
jurisdiction of its organization, with full corporate power and authority to own
or lease its properties and conduct its business as described in the Prospectus,
and is fully qualified to do business and is in good standing in each
jurisdiction in which the character of the business conducted by it or the
location of the properties owned or leased by it makes such qualification
necessary, except where the failure to be so qualified would not have a material
adverse effect upon the Company and its Subsidiaries, taken as a whole.
(ii) The authorized Common Stock of Company as of December 31, 1996 is as
set forth under the caption "Capitalization" in the Prospectus, and the Common
Stock conforms to the description set forth under the caption "Description of
Capital Stock" in the Prospectus. Since December 31, 1996, to such counsel's
knowledge, the Company has not issued or committed to issue any shares of Common
Stock or other securities of the Company other than as reflected in the
Registration Statement and Prospectus, or with respect to the issuance of Common
Stock in connection with the outstanding options and warrants as described in
the Registration Statement and Prospectus. The outstanding shares of Common
Stock have been, and the Stock, upon issuance and delivery and payment therefor
in the manner herein described, will be, duly authorized, validly issued, fully
paid and nonassessable. The certificates for the Stock as delivered to the
Underwriters are in due and proper form. There are no preemptive or other rights
to subscribe for or to purchase, or any restriction upon the voting or transfer
of, any shares of Common Stock pursuant to the Company's Restated Articles of
Organization or by-laws or under any agreement or other instrument known to such
counsel to which the Company or any of its Subsidiaries is a party or by which
it is bound; and to such counsel's knowledge, there are no contractual
preemptive rights or rights of first refusal or other similar rights which exist
with respect to any of the Stock or the issue and sale thereof, other than as
set forth in the Registration Statement or the Prospectus. To such counsel's
knowledge, no holder of shares of Common Stock or other securities of the
Company has the right (other than a right which has been waived) to have any
securities owned by such holder included in the Registration Statement. To such
counsel's knowledge, all of the outstanding shares of the capital stock of each
Subsidiary of the Company, except for Altus and Versal, are owned directly or
indirectly by the Company, free and clear of any claim, lien, encumbrance or
security interest.
(iii) The execution or delivery hereof or consummation of the transaction
contemplated hereby will not result in a violation of, or constitute a default
under, the Restated Articles of Organization or by-laws of the Company or any of
its Subsidiaries, or, in any manner which would have a material adverse effect
on the Company and its Subsidiaries taken as a whole, would result in a
violation or default, or with the giving of notice or lapse of time or both,
would result in such violation or default, under any agreement, lease, contract,
indenture or other instrument known to such counsel to which the Company or any
of its Subsidiaries is a party or
I-
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by which any of them is bound, or to which any of their properties are subject,
or any franchise, license, authorization, approval, permit, judgment, decree,
order, statute, rule or regulation known to such counsel to which the Company or
any of its Subsidiaries may be subject (other than the Federal Securities laws
or securities or "Blue Sky" laws of certain jurisdictions, as to which no
opinion need be expressed in this paragraph). The performance by the Company of
its obligations hereunder will not violate any law, rule, administrative
regulation, or, to such counsel's knowledge, any decree or order of any court or
any governmental agency or body having jurisdiction over the Company, its
Subsidiaries or their properties, or, in a manner which would have a material
adverse effect on the Company and its Subsidiaries taken as a whole, result in
the creation or imposition of any lien, charge, claim or encumbrance upon any
property or asset of the Company or any of its Subsidiaries. Except for permits
and similar authorizations required under the Securities Act, the Exchange Act
and the securities or "Blue Sky" laws of certain jurisdictions and for such
permits and authorizations which have been obtained, no consent, approval,
authorization or order of any court, governmental agency or body or financial
institution is required by law, or to such counsel's knowledge by any decree or
order of any court, government agency or body in connection with the execution
and delivery of this Agreement by the Company and consummation of the
transactions contemplated by this Agreement nor, to such counsel's knowledge, is
any such consent, approval, authorization or order required of any financial
institution in connection with the execution and delivery of this Agreement by
the Company and the consummation of the transactions contemplated by this
Agreement.
(iv) This Agreement has been duly authorized by all necessary corporate
action on the part of the Company, and has been duly executed and delivered by
the Company.
(v) The Registration Statement and all post-effective amendments thereto
have become effective under the Securities Act and, to the best of such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are pending before or contemplated by the Commission and any
and all filings required by Rule 424 and Rule 430A of the Commission have been
made; the Registration Statement, the Preeffective Prospectus and the Prospectus
and any amendment or supplement thereto, as of their respective dates, comply as
to form in all material respects with the requirements of the Securities Act and
the Rules and Regulations (except that counsel need express no opinion on the
financial statements and schedules and the other financial data included
therein). In addition, such counsel shall state that, although they have not
verified the accuracy or completeness of the statements contained in the
Registration Statement or any amendment thereto, nothing has come to the
attention of such counsel which causes them to believe that the Registration
Statement or any amendment thereto at the time it became effective (except that
counsel need express no opinion on the financial statements and schedules and
the other financial data included therein) contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading and that, on
the First Closing Date or Option Closing Date, the Preeffective Prospectus and
the Prospectus or any amendment or supplement thereto (except that counsel need
express no opinion on the financial statements and schedules and the other
financial data included therein), contains any untrue statement of a material
fact or omits to state a material fact
I-2
29
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(vi) All descriptions in the Preeffective Prospectus and the Prospectus of
statutes, regulations, legal or governmental proceedings, contracts and other
documents are accurate and fairly represent the information required to be
shown; and such counsel does not know of any contracts or documents of a
character required to be summarized or described therein or to be filed as
exhibits thereto which are not so summarized, described or filed, nor does such
counsel know of any pending or threatened litigation or any governmental
proceeding, statute or regulation required to be described in the Preeffective
Prospectus and the Prospectus which is not so described.
(vii) All documents incorporated by reference in the Preeffective
Prospectus and the Prospectus, when they were filed with the Commission,
complied as to form in all material respects with the requirements of the
Exchange Act; and such counsel has no reason to believe that any such documents,
when they were so filed, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
documents were so filed, not misleading; such counsel need express no opinion as
to the financial statements and schedules and other financial data contained in
any such document.
In rendering such opinion, such counsel may state that insofar as their
opinion under clause (v) above relates to the accuracy and completeness of the
Registration Statement, the Preeffective Prospectus and the Prospectus, it is
based upon participation in conferences with representatives of the
Underwriters, and with officers and other representatives of the Company and its
independent public accountants, at which the contents of the Registration
Statement, the Preeffective Prospectus and the Prospectus were discussed,
without independent verification by such counsel of the accuracy or completeness
of such information. Such counsel may also rely upon the opinions of other
competent counsel and, as to factual matters, on certificates of officers of the
company and of state officials, in which case their opinion is to state that
they are so doing and copies of said opinions or certificates are to be attached
to the opinion unless said opinions or certificates (or, in the case of
certificates, the information therein) have been furnished to the
Representatives in other form.
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Exhibit II
----------
Form of Opinion -
Subject to Change
-----------------
________ __, 1997
Xxxxx & Company
Bear Xxxxxxx & Co., Inc.
Xxxxxxxxx, Xxxxxxxx & Company LLC
X.X. Xxxxxx Securities Inc.
c/o Cowen & Company
As Representatives of the Several Underwriters
Xxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Vertex Pharmaceuticals Incorporated
-----------------------------------
Dear Ladies and Gentlemen:
We are patent counsel to Vertex Pharmaceuticals Incorporated, a
Massachusetts corporation (the "Company"). As patent counsel to the Company, we
are familiar with those patent and intellectual property matters referred to us
by the Company ("our Representation").
This opinion is being furnished to you pursuant to Section 8(g) of the
Underwriting Agreement dated ________ __. 1997 (the "Agreement") between you and
the Company, relating to the sale to you, severally, of certain shares of Common
Stock of the Company.
In our capacity as the Company's patent counsel, we have reviewed the
following statements under the captions "Risk Factors - Uncertainty to Patents
and Proprietary Information," "Business - Clinical Programs" and "Business -
Patents and Proprietary Information" in a copy of the Prospectus forming a part
of the Registration Statement on Form S-3 (Registration No. 333___) as filed by
the Company under the Securities Act of 1933, on _____:
Risk Factors
- Uncertainty Related to Patents and Proprietary Information
Business
- Clinical Programs
HIV Program
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31
Cancer Multidrug Resistance Program
Hemoglobin Disorders Program
Inflammation Program
IMPDH Program
Neurophilins Program
Hepatitis C Program
Business
- Patents and Proprietary Information
("the Statements").
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32
We have not independently verified the accuracy or completeness of the
factual matters contained in these Statements; subject thereto, insofar as these
Statements constitute facts pertaining to our Representation and involve matters
of United States law, they are, to our actual knowledge, accurate statements or
summaries of the matters therein set forth. As to questions of material fact
relevant thereto, we have in part relied upon representations made to us by
officers of the Company.
Specifically, we believe as to certain aspects of the Statements that:
(i) Subject to any disclosure to the contrary in the Prospectus, to
our actual knowledge, there are no legal or governmental proceedings,
except patent prosecution, pending or threatened relating to the patents
or patent applications of the Company referenced in the Statements and
related to our Representation;
(ii) Subject to any disclosure to the contrary in the Prospectus, to
our actual knowledge, there are no facts that would preclude the Company
from having clear title to or a valid license under the patents and patent
applications referenced in the Statements and related to our
Representation;
(iii) To our actual knowledge, we and the Company have complied and
are continuing to comply on an ongoing basis, with the required duty of
candor and good faith in dealing with the United States Patent and
Trademark Office (the "Office"), including the duty to disclose to the
Office all information actually known by us to be material to the
patentability of each issued United States patent or pending application
referred in the Statements and related to our Representation.
Further, we have no actual knowledge that causes us to believe, as of the
date of this letter, that the description in the Statements of the Company's
situation relating to patents and patent applications pertaining to our
Representation, contain any untrue statement of a material fact or omit to state
a material fact necessary to make such Statements not misleading in the context
in which they are made.
As we have discussed, pursuant to our firm's policy any communication from
us, including this letter, is solely for your information, and to assist you as
the underwriters in conducting your investigation of the affairs of the Company
in connection with the aforesaid Registration Statement and it is not to be
quoted or otherwise referred to in any public disclosure document (including
without limitation the Registration Statement), furnished to any other person,
or filed with any governmental agency. Moreover, this letter speaks as of the
date hereof and we assume no obligation to advise you of any changes of law or
fact that may thereafter occur.
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33
Very truly yours,
FISH & XXXXX
Xxxxx X. Xxxxx, Xx.
Xxxxxx X. Xxxxx
JFH/ASM:mem
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