Exhibit 1.1
Execution Version
VERTEX PHARMACEUTICALS INCORPORATED
(a Massachusetts corporation)
6,000,000 Shares of Common Stock
UNDERWRITING AGREEMENT
Dated: February 12, 2008
VERTEX PHARMACEUTICALS INCORPORATED
(a Massachusetts corporation)
6,000,000 Shares of Common Stock
(Par Value $.01 Per Share)
UNDERWRITING AGREEMENT
MERRILL
LYNCH & CO.
MERRILL LYNCH, PIERCE,
FENNER & SMITH
INCORPORATED
GOLDMAN,
SACHS & CO.
MORGAN
STANLEY & CO. INCORPORATED
J.P. MORGAN SECURITIES
INC.
c/o Merrill
Lynch & Co.
Merrill Lynch,
Pierce, Fenner & Smith
Incorporated
4 World Financial
Center
New York, New
York 10080
Ladies and
Gentlemen:
Vertex
Pharmaceuticals Incorporated, a Massachusetts corporation (the
“Company”), confirms its agreement with Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated (“Merrill Lynch”) and each of the
several underwriters named in Schedule A (collectively, the
“Underwriters,” which term shall also include any
underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch is acting as representative (in
such capacity, the “Representative”), with respect to
the issue and sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective
numbers of shares of Common Stock, par value $.01 per share, of the
Company (“Common Stock”) set forth in said Schedule A,
and with respect to the grant by the Company to the Underwriters,
acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of
900,000 additional shares of Common Stock to cover overallotments,
if any. The aforesaid 6,000,000 shares of Common Stock (the
“Initial Securities”) to be purchased by the
Underwriters and all or any part of the 900,000 shares of Common
Stock subject to the option described in
Section 2(b) hereof (the “Option Securities”)
are hereinafter called, collectively, the
“Securities.”
The
Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representative deems
advisable after this Agreement has been executed and
delivered.
The
Company has filed with the Securities and Exchange Commission (the
“Commission”) an automatic shelf registration statement
on Form S-3 (No. 333-149165), including the related
preliminary prospectus or prospectuses, which registration
statement became effective upon filing under
Rule 462(e) (“Rule 462(e)”) of the
rules and regulations of the Commission (the “1933 Act
Regulations”) under the Securities Act of 1933, as amended
(the “1933 Act”). Such registration statement covers
the registration of the Securities under the 1933 Act. Promptly
after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of
Rule 430B (“Rule 430B”) of the 1933 Act
Regulations and paragraph (b) of Rule 424
(“Rule 424(b)”) of the 1933 Act Regulations.
Any information included in such prospectus that was omitted from
such registration statement at the time it became effective but
that is deemed to be part of and included in such
registration
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statement pursuant to Rule 430B is
referred to as “Rule 430B Information.” Each
prospectus used after the effectiveness of the Original
Registration Statement and prior to the execution and delivery of
this Agreement in connection with the offering of the Securities is
herein called a “preliminary prospectus.” Such
registration statement, at any given time, including the amendments
thereto at such time, exhibits and any schedules thereto at such
time, the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act at such time and the
documents otherwise deemed to be a part thereof or included therein
by 1933 Act Regulations, is herein called the “Registration
Statement.” The Registration Statement at the time it
originally became effective is herein called the “Original
Registration Statement.” The final prospectus in the
form first furnished to the Underwriters for use in connection with
the offering of the Securities, including the documents
incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act at the time of the execution of
this Agreement is herein called the “Prospectus.” 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 copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system
(“EDGAR”).
Concurrently with the offering of the
Securities, the Company is offering its 4.75% Convertible Senior
Subordinated Notes due 2013 (the “Concurrent
Offering”), pursuant to a separate automatic shelf
registration statement and underwriting agreement.
All
references in this Agreement to financial statements and schedules
and other information which is “given,”
“contained,” “included,”
“stated” or “described” in the Registration
Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which
are incorporated by reference in or otherwise deemed by 1933 Act
Regulations to be a part of or included in the Registration
Statement, any preliminary prospectus or the Prospectus, as the
case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of
1934 (the “1934 Act”) which is incorporated by
reference in or otherwise deemed by 1933 Act Regulations to be a
part of or included in the Registration Statement, such preliminary
prospectus or the Prospectus, as the case may be.
SECTION 1.
Representations and Warranties.
(a)
Representations and Warranties by the Company . The
Company represents and warrants to each Underwriter as of the date
hereof, as of the Applicable Time referred to in
Section 1(a)(i) hereof, as of the Closing Time referred
to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and
agrees with each Underwriter, as follows:
(i) Status as a Well Known
Seasoned Issuer . (A) At the time of filing the
Original Registration Statement, (B) at the time of the most
recent amendment thereto for the purposes of complying with
Section 10(a)(3) of the 1933 Act (whether such amendment
was by post-effective amendment, incorporated report filed pursuant
to Section 13 or 15(d) of the 1934 Act or form of
prospectus), (C) at the time the Company or any person acting
on its behalf (within the meaning, for this clause only, of
Rule 163(c) (“Rule 163(c)”) of the 1933
Act Regulations) made any offer relating to the Securities in
reliance on the exemption of Rule 163 of the 1933 Act
Regulations and (D) at the date hereof, the Company was and is
a “well known seasoned issuer” as defined in
Rule 405 of the 1933 Act Regulations
(“Rule 405”), pursuant to
Section 1(i)(A) of such definition, including not having
been and not being an “ineligible issuer” as defined in
Rule 405. The Registration Statement is an
“automatic shelf registration statement,” as defined in
Rule 405
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and
the Securities, since their registration on the Registration
Statement, have been and remain eligible for registration by the
Company on a Rule 405 “automatic shelf registration
statement.” The Company has not received from the
Commission any notice pursuant to Rule 401(g)(2) of the
1933 Act Regulations objecting to the use of the automatic shelf
registration statement form.
At
the time of filing the Original Registration Statement, at the
earliest time thereafter that the Company or another offering
participant made a bona fide offer (within the meaning of
Rule 164(h)(2) of the 1933 Act Regulations) of the
Securities and at the date hereof, the Company was not and is not
an “ineligible issuer,” as defined in
Rule 405.
(ii)
Registration Statement, Prospectus and Disclosure at Time of
Sale . The Original Registration Statement became
effective upon filing under Rule 462(e) on
February 11, 2008, and any post-effective amendment thereto
also became effective upon filing under Rule 462(e). No
stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional
information has been complied with.
Any
offer that is a written communication relating to the Securities
made prior to the filing of the Original Registration Statement by
the Company or any person acting on its behalf (within the meaning,
for this paragraph only, of Rule 163(c)) required to be filed
that is an offer for purposes of Rule 163 has been filed with
the Commission in accordance with the exemption provided by
Rule 163 and otherwise complied with the requirements of
Rule 163, including without limitation the legending
requirement, to qualify such offer for the exemption from
Section 5(c) of the 1933 Act provided by
Rule 163.
At
the respective times the Original Registration Statement and each
amendment thereto became effective, at each deemed effective date
with respect to the Underwriters pursuant to
Rule 430B(f)(2) of the 1933 Act Regulations and at the
Closing Time (and, if any Option Securities are purchased, at the
Date of Delivery), the Registration Statement complied and will
comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and did not and will not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading. Neither the Prospectus nor
any amendments or supplements thereto, at the time the Prospectus
or any such amendment or supplement was issued and at the Closing
Time (and, if any Option Securities are purchased, at the Date of
Delivery), included or will include an untrue statement of a
material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading.
Each preliminary prospectus (including the
prospectus or prospectuses filed as part of the Original
Registration Statement or any amendment thereto) complied when so
filed in all material respects with the 1933 Act Regulations and
each preliminary prospectus and the Prospectus delivered to the
Underwriters for use in connection with this offering was identical
to the electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
As
of the Applicable Time (as defined below), neither (x) the
Issuer General Use Free Writing Prospectus(es) (as defined below),
if any, issued at or prior to the Applicable Time, the Statutory
Prospectus (as defined below) and the information included on
Schedule B hereto, all considered together (collectively, the
“General Disclosure Package”), nor (y) any
individual Issuer Limited Use Free Writing Prospectus, if any, when
considered together with the General
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Disclosure Package, included any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading.
As
used in this subsection and elsewhere in this Agreement:
“Applicable Time” means 6:00 pm
(Eastern Time) on February 12, 2008 or such other time as
agreed to in writing by the Company and Merrill Lynch.
“Issuer Free Writing Prospectus”
means any “issuer free writing prospectus,” as defined
in Rule 433 of the 1933 Act Regulations
(“Rule 433”), relating to the Securities that
(i) is required to be filed with the Commission by the
Company, (ii) is a “road show that is a written
communication” within the meaning of Rule 433(d)(8)(i),
whether or not required to be filed with the Commission or
(iii) is exempt from filing pursuant to
Rule 433(d)(5)(i) because it contains a description of
the Securities or of the offering that does not reflect the final
terms, in each case in the form filed or required to be filed with
the Commission or, if not required to be filed in the form
required to be retained in the Company’s records pursuant to
Rule 433(g).
“Issuer General Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is
intended for general distribution to prospective investors, as
evidenced by its being specified in Schedule C hereto.
“Issuer Limited Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is
not an Issuer General Use Free Writing Prospectus.
“Statutory Prospectus” as of any
time means the prospectus relating to the Securities that was
included in the Original Registration Statement and the preliminary
prospectus dated February 11, 2008 relating to the offering of
the Securities including any document incorporated by reference
therein.
Each Issuer Free Writing Prospectus, if any, as
of its issue date and at all subsequent times through the
completion of the public offer and sale of the Securities or until
any earlier date that the Company notified or notifies Merrill
Lynch as described in Section 3(e), did not, does not and will
not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration
Statement or the Prospectus, and any Preliminary Prospectus deemed
to be a part thereof that has not been superseded or
modified.
The
representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement, the
Prospectus or any amendment or supplement thereto or any Issuer
Free Writing Prospectus made in reliance upon and in conformity
with written information furnished to the Company by any
Underwriter through Merrill Lynch expressly for use
therein.
(iii)
Incorporated Documents . The documents incorporated or
deemed to be incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus, when
they became effective or at the time they were or hereafter are
filed with the Commission, as the case may be, conformed and will
conform in all material respects with the requirements of the 1934
Act and the rules and regulations of the Commission thereunder
(the “1934 Act Regulations”). The documents
incorporated or deemed to be incorporated by reference in the
Registration Statement when it became effective, when read together
with the
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other information in the Prospectus, at the
time the Registration Statement became effective, did not and will
not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make
the statements therein not misleading. The documents
incorporated or deemed to be incorporated by reference in
(a) the General Disclosure Package, when read together with
the other information in the General Disclosure Package at the
earlier of time the General Disclosure Package was first used and
the date and time of the first contract of sale of the Securities
in this offering and (b) the Prospectus at the Closing Time
(and if any Option Securities are purchased, at the Date of
Delivery), did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made,
not misleading.
(iv)
Independent Accountants . Ernst &
Young LLP, which has certified the financial statements of the
Company and its subsidiaries, is an independent registered public
accounting firm, within the meaning of the 1933 Act and the 1933
Act Regulations.
(v)
Financial Statements . The financial statements included in the Registration Statement,
the General Disclosure Package and the Prospectus, together with
the related schedules and notes, present fairly in all material respects the
consolidated financial position of the Company and its consolidated
subsidiaries as of the dates indicated and the results of
operations and cash flows of the Company and its consolidated
subsidiaries for the periods specified; such financial statements
have been prepared in conformity with generally accepted accounting
principles (“GAAP”) in the United States; the selected
consolidated financial information included in the Registration
Statement, the General Disclosure Package and the Prospectus are
fairly presented in all material respects and prepared on a basis
consistent with the audited financial statements contained in the
Registration Statement, the General Disclosure Package and the
Prospectus or incorporated by reference and the books and records
of the Company and its subsidiaries .
(vi)
No Material Adverse Change in Business . Since the
respective dates as of which information is given in the
Registration Statement , the General Disclosure Package
or the Prospectus, except
as otherwise stated therein, (A) there has been no material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a “Material
Adverse Effect”), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise and (C) except for regular dividends on the
Company’s common stock or preferred stock, in amounts per
share that are consistent with past practice, respectively, there
has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(vii)
Good Standing of the Company . The Company has been
duly organized, is validly existing as a corporation under the laws
of Massachusetts and has the corporate power and authority to own
its property, to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement and is duly qualified in or licensed by, and is in good
standing (or other similar concept that may exist in the applicable
jurisdiction) in, each jurisdiction in which the nature of its
business requires such qualification, except where the failure,
individually or in the aggregate, to be so licensed or qualified
could not reasonably be expected to have a Material Adverse
Effect.
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(viii)
Good Standing of Non-UK Subsidiaries . Each of the
subsidiaries of the Company (other than Vertex Pharmaceuticals
(Europe) Ltd.) has been duly organized or formed, is validly
existing as a corporation, limited liability company or limited
partnership, or business trust, as the case may be, in good
standing (or, if not in good standing at the time of this
Agreement, will be in good standing as of the Closing Time), if
applicable, under the laws of the jurisdiction in which it is
chartered or organized, and is duly qualified in or licensed by,
and is in good standing (or, if applicable, other similar concept
that may exist in the applicable jurisdiction) in, each
jurisdiction in which the nature of its business requires such
qualification, except where the failure, individually or in the
aggregate, to be so licensed or qualified could not reasonably be
expected to have a Material Adverse Effect.
(ix)
Capitalization of Non-UK Subsidiaries . All the
outstanding shares of capital stock, limited partnership interests,
membership interests or other applicable ownership interests of
each subsidiary (other than Vertex Pharmaceuticals (Europe) Ltd.)
have been duly authorized and validly issued and are fully paid and
nonassessable and, except as otherwise set forth in the Prospectus,
all outstanding shares of capital stock or other applicable
ownership interests of the subsidiaries are owned by the Company
either directly or through wholly owned subsidiaries free and clear
of any security interest, claim, lien or encumbrance. None of
the outstanding shares of capital stock of any subsidiary was
issued in violation of the preemptive or other similar rights of
any securityholder of such subsidiary (other than Vertex
Pharmaceuticals (Europe) Ltd.). The only subsidiaries of the
Company are Vertex Pharmaceuticals (San Diego) LLC, VSD Sub I LLC,
VSD Sub II LLC, Vertex Holdings, Inc., Vertex Pharmaceuticals
(Europe) Ltd., Vertex Pharmaceuticals (Cayman) Ltd., Vertex
Securities Corporation, and Vertex Securities Trust.
(x)
Certain Subsidiaries . None of Vertex Pharmaceuticals
(San Diego) LLC, VSD Sub I LLC, VSD Sub II LLC, Vertex
Pharmaceuticals (Cayman) Ltd., Vertex Pharmaceuticals (Europe)
Ltd., and Vertex Securities Corporation is a party to any contract,
loan or credit agreement that is, in each case, material to the
Company or has any licenses, patents or other intellectual property
rights that is, in each case, material to the Company or owns or
leases any property on which the Company is substantially
dependent, and none of Vertex Pharmaceuticals (San Diego) LLC, VSD
Sub I LLC, VSD Sub II LLC, Vertex Pharmaceuticals (Cayman) Ltd.,
Vertex Pharmaceuticals (Europe) Ltd., and Vertex Securities
Corporation has received any amount of revenue in the last twelve
months that is material to the Company.
(xi)
Authorization of Agreement . This Agreement has been
duly authorized, executed and delivered by the Company.
(xii)
Authorization of the Securities . The Securities have
been duly authorized for issuance and sale to the Underwriters
pursuant to this Agreement and, at the Closing Time will have been
duly executed by the Company and, when authenticated, issued,
delivered by the Company pursuant to this Agreement against payment
of the consideration set forth herein, will be validly issued,
fully paid and non-assessable; no holder of the Securities will be
subject to personal liability by reason of being such a holder; and
the issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the
Company.
(xiii)
Description of the Securities . The Common Stock
conforms in all material respects to the description thereof
contained in the Prospectus.
(xiv)
Capitalization of the Company . The capital stock of
the Company conforms in all material respects to the description
thereof contained in the Prospectus. The authorized,
issued
6
and
outstanding capital stock of the Company is as set forth in the
Prospectus in the column entitled “Actual” under the
caption “Capitalization” (except for subsequent
issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans disclosed in the
Prospectus, or pursuant to the exercise of convertible securities
or options disclosed in the Prospectus). The shares of issued and
outstanding capital stock of the Company have been duly authorized
and validly issued and are fully paid and non-assessable; and none
of the outstanding shares of capital stock of the Company were
issued in violation of the preemptive or other similar rights of
any securityholder of the Company.
(xv)
Absence of Defaults and Conflicts . Neither the
Company, nor any of its subsidiaries, is in breach of, or in
default under (nor has any event occurred which with notice, lapse
of time or both would constitute a breach of, or default by the
Company or any of its subsidiaries under), (A) any provision
of the charter or bylaws (or similar organizational documents) of
the Company or any of its subsidiaries or (B) except as could
not reasonably be expected to individually or in the aggregate have
a Material Adverse Effect, the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan agreement or
other agreement, obligation, condition, covenant or instrument to
which the Company or any of its subsidiaries is a party or bound or
to which its or their property is subject, or under any federal,
state, local or foreign law, regulation or rule or any decree,
judgment or order applicable to the Company or any of its
subsidiaries or any of its or their property; the transactions
contemplated hereby and all actions of the Company contemplated in
the Registration Statement and the Prospectus (including the
issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Prospectus
under the caption “Use of Proceeds”) and the execution,
delivery and performance of this Agreement will not conflict with,
or result in any breach of or constitute a default or Repayment
Event (as defined below) under (nor constitute any event which with
notice, lapse of time or both would constitute a breach of, default
by or Repayment Event of the Company or any of its subsidiaries
under), (X) any provision of the charter or bylaws of the
Company or any of its subsidiaries, or (Y) without prejudice
to the foregoing, and except as could not reasonably be expected to
individually or in the aggregate have a Material Adverse Effect,
the terms of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company
or any of its subsidiaries is a party or bound or to which its or
their property is subject. As used herein, a “Repayment
Event” means any event or condition which gives the holder of
any note, debenture or other evidence of indebtedness (or any
person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any of its subsidiaries.
(xvi)
Absence of Labor Dispute . No labor problem or dispute
with the employees of the Company or any of its subsidiaries exists
or, to the Company’s knowledge, is threatened, imminent or
pending, except as set forth in or contemplated in the Registration
Statement and the Prospectus.
(xvii)
Absence of Proceedings . E xcept as disclosed in the Registration
Statement and the Prospectus, there are no actions, suits, stop
orders, restraining orders, claims, investigations or proceedings
pending or, to the knowledge of the Company, threatened, before any
court or governmental agency or other regulatory or administrative
authority or any arbitrator, to which the Company or any of its
subsidiaries is a party or to which the Company, any of its
subsidiaries or any of their licenses, concessions or other
properties and assets is subject, that, individually or in the
aggregate, could reasonably be expected to have a Material
Adverse Effect; and no actions, suits, claims, investigations or
proceedings pending or, to the knowledge of the
Company,
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threatened, before any court or governmental
agency or other regulatory or administrative authority challenging
or could otherwise be reasonably expected to have a material
adverse effect on the transactions contemplated in the Registration
Statement, the Prospectus or hereby.
(xviii)
Possession of Intellectual Property . Each of the
Company and its subsidiaries, owns or possesses, or can acquire on
reasonable terms, adequate patents, patent licenses, trademarks,
service marks, copyrights, trade names, know-how and other
intellectual property necessary to carry on its businesses as
presently conducted, and except as described in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has received any notice of infringement of or conflict
with asserted rights of others with respect to any patents, patent
licenses, trademarks, service marks, trade names, know-how or other
intellectual property that in the aggregate could reasonably be
expected to have a Material Adverse Effect; the patent applications
filed by or on behalf of the Company described in the Registration
Statement and the Prospectus have been properly prepared and filed
on behalf of the Company; each such patent applications and patents
described in the Registration Statement and the Prospectus is,
except as set forth or contemplated in the Registration Statement
and the Prospectus, assigned or licensed to the Company, and,
except as set forth in the Registration Statement and the
Prospectus, to the Company’s knowledge, no other entity or
individual has any right or claim in any such patent, patent
application or any patent to be issued therefrom; and to the
knowledge of the Company, each such patent application discloses
potentially patentable subject matter.
(xix)
Clinical Trials . To the Company’s knowledge,
the human clinical trials conducted by the Company, on behalf of
the Company or in which the Company has participated that are
described in the Registration Statement or the Prospectus, or the
results of which are referred to in the Registration Statement or
the Prospectus, were and, if still pending, are being, conducted in
accordance with applicable regulatory requirements; to the
Company’s knowledge, the descriptions of the results of such
studies, tests and trials contained in the Registration Statement
or the Prospectus are accurate in all material respects; the
Company has no knowledge of any other studies or tests conducted by
the Company, on behalf of the Company or in which the Company has
participated, the results of which discredit the results described
in the Registration Statement or the Prospectus; the Company has
not received any notice or correspondence from the Federal Food and
Drug Administration (the “FDA”) or any other
governmental agency requiring the termination or suspension of any
clinical trials conducted by, or on behalf of, the Company or in
which the Company has participated that are described in the
Registration Statement or the Prospectus or the results of which
are referred to in the Registration Statement or the
Prospectus.
(xx)
Absence of Further Requirements . No consent,
approval, authorization, filing with or order of any court or
governmental agency or body is required for the performance by the
Company of its obligations hereunder, in connection with the
offering, issuance or sale of the Securities hereunder or the
consummation of the transactions contemplated by this Agreement,
except such as have been already obtained or as may be required
under the 1933 Act, 1934 Act, the 1933 Act Regulations, the 1934
Act Regulations or state securities laws.
(xxi)
Possession of Licenses and Permits . The Company and
its subsidiaries possess all licenses, certificates, permits and
other authorizations issued by the appropriate U.S. federal, state,
local or non-U.S. regulatory authorities necessary to conduct their
respective businesses, except where the failure to possess such
licenses, certificates, permits and authorizations, individually or
in the aggregate, could not reasonably be expected to have a
Material Adverse
8
Effect and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such certificate, authorization
or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, could reasonably be
expected to have a Material Adverse Effect, except as set forth in
or contemplated in the Prospectus.
(xxii)
Tax Returns and Payment of Taxes . The Company has
filed all non-U.S., U.S. federal, state and local tax returns that
are required to be filed or has requested extensions thereof
(except in any case in which the failure so to file could not
reasonably be expected to have a Material Adverse Effect and except
as set forth in or contemplated in the Prospectus) and has paid all
taxes required to be paid by it and any other assessment, fine or
penalty levied against it, to the extent that any of the foregoing
is due and payable, except for any such tax, assessment, fine or
penalty that is currently being contested in good faith or as could
not reasonably be expected to have a Material Adverse Effect and
except as set forth in or contemplated in the
Prospectus.
(xxiii)
Insurance . The Company and each of its subsidiaries
are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent
and customary in the businesses in which they are engaged; all
policies of insurance and fidelity or surety bonds insuring the
Company or any of its subsidiaries or their respective businesses,
assets, employees, officers and directors are in full force and
effect; the Company and its subsidiaries are in compliance with the
terms of such policies and instruments; except with respect to the
pending class actions, there are no claims by the Company or any of
its subsidiaries under any such policy or instrument as to which
any insurance company is denying liability or defending under a
reservation of rights clause; neither the Company nor any of its
subsidiaries 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 its business at a cost that could not
reasonably be expected to have a Material Adverse Effect except as
set forth in or contemplated in the Prospectus.
(xxiv)
Environmental Laws . The Company and its subsidiaries
(i) are in compliance with any and all applicable federal,
state, local and foreign laws and regulations relating to the
protection of human health and safety, the environment or hazardous
or toxic substances or wastes, pollutants or contaminants
(“Environmental Laws”), (ii) have received all
permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where
such noncompliance with Environmental Laws, failure to receive
required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or
approvals could not, singly or in the aggregate, reasonably be
expected to have a Material Adverse Effect; there are no pending
or, to the Company’s knowledge, threatened, administrative,
regulatory or judicial actions, suits, demand letters, claims,
liens, written notices of noncompliance or violation,
investigations or proceedings pursuant to any Environmental Laws
against the Company or any of its subsidiaries which would, singly
or in the aggregate, reasonably be expected to have a Material
Adverse Effect; and, to the Company’s knowledge, there are no
events or circumstances at the Company’s owned or leased
properties that could reasonably be expected to form the basis of a
governmental order for clean-up or remediation of hazardous or
toxic substances, wastes, pollutants or contaminants regulated
under Environmental Laws, or an action, suit or proceeding by any
private party or governmental body or agency, against the Company
or any of its subsidiaries pursuant to Environmental
Laws.
9
(xxv)
Absence of Price Stabilization . Neither the Company
nor any affiliate of the Company has taken, nor will the Company or
any affiliate take, directly or indirectly, any action which is
designed to or which has constituted or which would be expected to
cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the
Securities.
(xxvi)
Investment Company Act . T he Company is not,
and after giving effect to the transactions contemplated in the
Prospectus and hereby, will not be required to register as an
“investment company” under the U.S. Investment Company
Act of 1940, as amended.
(xxvii)
Related Party Transactions . No relationship, direct
or indirect, exists between or among any of the Company or any
affiliate of the Company on the one hand, and any former or current
director, officer, stockholder, customer or supplier of any of
them, on the other hand, which is required by the 1933 Act or by
the rules and regulations enacted thereunder to be described
in the Registration Statement or the Prospectus which is not so
described or is not described as required.
(xxviii)
Reporting Company; Nasdaq Listing . A s of the
date hereof and at all times subsequent hereto up to the Closing
Time, the Company is subject to the reporting requirements of
Section 13 or Section 15(d) of the 1934 Act and has
complied and will continue to comply, in all material respects,
with the 1934 Act, and the rules and regulations thereunder
and the various state securities or “blue sky” laws and
the applicable laws, rules and regulations of each
jurisdiction in which any of the Company’s existing
securities are listed and any authority therein.
(xxix)
Accounting Controls . The Company and each of its
subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorizations;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in
accordance with management’s general or specific
authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any
differences.
(xxx)
No Stamp or Other Taxes . There are no stamp or
other issuance or transfer taxes or duties or other similar fees or
charges required to be paid in connection with the execution and
delivery of this Agreement or upon the issuance of Common
Stock.
(xxxi)
No Restrictions on Payment of Dividends . No
subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making
any other distribution on such subsidiary’s capital stock,
from repaying to the Company any loans or advances to such
subsidiary from the Company or from transferring any of such
subsidiary’s property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated
in the Prospectus.
(xxxii)
Compliance with FDA and OSHA . Except for
matters governed by Environmental Laws which are addressed in
Section 1 (a)(xxiv), and except as disclosed in the
Prospectus, the Company and each of its subsidiaries is in
compliance with all applicable laws, statutes, ordinances,
rules and regulations of the FDA and the Federal Occupational
Safety and Health Administration (“OSHA”), and has
filed all applications and has obtained all licenses, permits and
approvals or other regulatory authorizations of the FDA and OSHA
(including,
10
without limitation, all FDA approvals necessary
for marketing the products the Company and each of its subsidiaries
currently markets), except where such non-compliance, failure to
file such applications or failure to obtain such licenses, permits,
approvals or authorizations, could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
(xxxiii) No
Actions by FDA . Except for matters governed by
Environmental Laws which are addressed in Section 1(a)(xxiv),
and except as disclosed in the Prospectus, the FDA has not
commenced, or, to the Company’s knowledge, threatened to
initiate, any action to withdraw its approval of any product of the
Company or its subsidiaries or commenced or, to the Company’s
knowledge, threatened to initiate any action to withdraw its
approval of any facility of the Company or its subsidiaries.
(xxxiv) No
Violation of FCPA . None of the Company, its subsidiaries
or, to the knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of its subsidiaries is
aware of or has taken any action, directly or indirectly, that
would result in a violation by such Persons of Foreign Corrupt
Practices Act of 1977, as amended, and the rules and
regulations thereunder (the “FCPA”), including, without
limitation, making use of the mails or any means or instrumentality
of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization
of the giving of anything of value to any “foreign
official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA; and the
Company, its subsidiaries and, to the knowledge of the Company, its
Affiliates have conducted their businesses in compliance with the
FCPA and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith.
(xxxv)
No Calamities . Subsequent to the respective
dates as of which information is given in the Prospectus, neither
the Company nor any of its subsidiaries has sustained any material
loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, in
each case, that has had, or could reasonably be expected to have, a
Material Adverse Effect;
(xxxvi) UK
Subsidiary . According to the records of Companies House
(the registry for companies incorporated in England and Wales) as
of February 11, 2008, Vertex Pharmaceuticals (Europe) Ltd. has
been in continuous existence since it was incorporated and there
are no documents in the public file in England and Wales showing
the institution of proceedings for the liquidation or winding up of
this subsidiary.
(xxxvii) Registration
Rights . There are no persons with registration rights or
other similar rights to have any securities registered pursuant to
the Registration Statement or otherwise registered by the Company
under the Act.
(b)
Officer’s Certificates . Any certificate signed
by any officer of the Company or any of its subsidiaries delivered
to the Representative or to counsel for the Underwriters shall be
deemed a representation and warranty on the date of such
certificate by the Company to each Underwriter as to the matters
covered thereby.
11
SECTION 2.
Sale and Delivery to Underwriters; Closing .
(a)
Initial Securities . On the basis of the
representations, warranties and covenants herein contained and
subject to the terms and conditions herein set forth, the Company
agrees to sell to each Underwriter and each Underwriter agrees to
purchase from the Company, severally and not jointly, at the price
per share set forth in Schedule B, the number of Initial Securities
set forth in Schedule A opposite the name of such Underwriter, plus
any additional number of Initial Securities that such Underwriter
may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b)
Option Securities . In addition, on the basis of the
representations, warranties and covenants herein contained and
subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not
jointly, to purchase up to an additional 900,000 shares of Common
Stock at the price per share set forth in Schedule B, less an
amount per share equal to any dividends or distributions declared
by the Company and payable on the Initial Securities but not
payable on the Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in
whole or in part from time to time only for the purpose of covering
overallotments which may be made in connection with the offering
and distribution of the Initial Securities upon written notice by
Merrill Lynch to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising
the option and the time and date of payment and delivery for such
Option Securities, which shall be no earlier than two business days
following the date on which the Company receives notice or as
otherwise agreed to by the parties hereto. Subject to the
foregoing, any such time and date of delivery (a “Date of
Delivery”) shall be determined by Merrill Lynch, but shall
not be later than seven full business days after the exercise of
such option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or
any portion of the Option Securities, each of the Underwriters,
acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which
the number of Initial Securities set forth in Schedule A opposite
the name of such Underwriter bears to the total number of Initial
Securities, subject in each case to such adjustments as Merrill
Lynch in its discretion shall make to eliminate any sales or
purchases of fractional shares.
(c)
Payment . Payment of the purchase price for, and
delivery of certificates for, the Initial Securities shall be made
at the office of Cleary Gottlieb Steen & Hamilton LLP, One
Liberty Plaza, New York, New York 10006 or at such other place as
shall be agreed upon by the Representative and the Company, at
9:00 a.m. (Eastern time) on February 19, 2008 (unless
postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as
shall be agreed upon by the Representative and the Company (such
time and date of payment and delivery being herein called
“Closing Time”).
In
addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for,
and delivery of certificates for, such Option Securities shall be
made at the above-mentioned offices, or at such other place as
shall be agreed upon by the Representative and the Company, on each
Date of Delivery as specified in the written notice from the
Representative to the Company.
Payment shall be made to the Company by wire
transfer of immediately available funds to a bank account
designated by the Company in writing, against delivery to the
Representative for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It
is understood that each Underwriter has authorized the
Representative, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Initial
Securities and the Option Securities, if any, which it has agreed
to purchase. Merrill Lynch, individually and not as
representative of the Underwriters, may
12
(but shall not be obligated to) make payment of
the purchase price for the Initial Securities or the Option
Securities, if any, to be purchased by any Underwriter whose funds
have not been received by the Closing Time or the relevant Date of
Delivery, as the case may be, but such payment shall not relieve
such Underwriter from its obligations hereunder.
(d)
Denominations; Registration . Certificates for the
Initial Securities and the Option Securities, if any, shall be in
such denominations and registered in such names as the
Representative may request in writing at least one full business
day before the Closing Time or the relevant Date of Delivery, as
the case may be. The certificates for the Initial Securities
and the Option Securities, if any, will be made available for
examination and packaging by the Representative in The City of New
York not later than 10:00 A.M. (Eastern time) on the business
day prior to the Closing Time or the relevant Date of Delivery, as
the case may be
SECTION 3.
Covenants of the Company . The Company covenants with
each Underwriter as follows:
(a) Compliance with Securities
Regulations and Commission Requests; Payment of Filing Fees
. The Company, subject to Section 3(b), will comply with
the requirements of Rule 430B and will notify the
Representative immediately, and confirm the notice in writing,
(i) when any post-effective amendment to the Registration
Statement in connection with the offering of the Securities and
transactions contemplates in this Agreement or new registration
statement relating to the Securities shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have
been filed in connection with the offering of the Securities and
transactions contemplated in this Agreement, (ii) of the
receipt of any comments from the Commission in connection with the
offering of the Securities and transactions contemplated in this
Agreement, (iii) of any request by the Commission for any
amendment to the Registration Statement in connection with the
offering of the Securities and transactions contemplated in this
Agreement, or the filing of a new registration statement or any
amendment or supplement to the Prospectus or any document
incorporated by reference therein or otherwise deemed to be a part
thereof or for additional information in connection with the
offering of the Securities and transactions contemplated in this
Agreement, (iv) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or
such new registration statement or of any order preventing or
suspending the use of any preliminary prospectus in connection with
the offering of the Securities and transactions contemplated in
this Agreement, or of the suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such
purposes or of any examination pursuant to
Section 8(e) of the 1933 Act concerning the Registration
Statement and (v) if the Company becomes the subject of a
proceeding under Section 8A of the 1933 Act in connection with
the offering of the Securities. The Company will effect the
filings required under Rule 424(b), in the manner and within
the time period required by Rule 424(b) (without reliance
on Rule 424(b)(8)), and will take such steps as it deems
necessary to ascertain promptly whether the Prospectus transmitted
for filing under Rule 424 was received for filing by the
Commission and, in the event that it was not, it will promptly file
the Prospectus. The Company will make every reasonable effort
to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible
moment. The Company shall pay the required Commission filing
fees relating to the Securities within the time required by
Rule 456(b)(1)(i) of the 1933 Act Regulations and
otherwise in accordance with Rules 456(b) and
457(r) of the 1933 Act Regulations (including, if applicable,
by updating the “Calculation of Registration Fee” table
in accordance with Rule 456(b)(1)(ii) either in a
post-effective amendment to the Registration Statement or on the
cover page of a prospectus filed pursuant to
Rule 424(b)).
13
(b) Filing of Amendments and
Exchange Act Documents . Until the end of the period
during which a Prospectus is required to be delivered under the
1933 Act in connection with the offering of the Securities is
contemplated by this Agreement, the Company will give the
Representative notice of its intention to file or prepare any
amendment to the Registration Statement or new registration
statement relating to the Securities or any amendment, supplement
or revision to either any preliminary prospectus (including any
prospectus included in the Original Registration Statement or
amendment thereto at the time it became effective) or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or
otherwise, and the Company will furnish the Representative with
copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file
or use any such document to which the Representative or counsel for
the Underwriters shall reasonably object. This section
(b) shall not apply to filings or periodic or current reports
pursuant to the 1934 Act after the date of this Agreement except as
described in the following sentence. The Company has given
the Representative notice of any filings made pursuant to the 1934
Act or 1934 Act Regulations within 48 hours prior to the Applicable
Time; the Company will give the Representative notice of its
intention to make any such filing from the Applicable Time to the
Closing Time and will furnish the Representative with copies of any
such documents a reasonable amount of time prior to such proposed
filing, as the case may be, and will not file or use any such
document to which the Representative or counsel for the
Underwriters shall reasonably object.
(c) Delivery of Registration
Statements . The Company has furnished or will deliver to
the Representative and counsel for the Underwriters, without
charge, a reasonable number of signed copies of the Original
Registration Statement and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein or otherwise deemed to be a part thereof) and signed copies
of all consents and certificates of experts, and will also deliver
to the Representative, without charge, a conformed copy of the
Original Registration Statement and of each amendment thereto
(without exhibits) for each of the Underwriters. The copies
of the Original Registration Statement and each amendment thereto
in connection with the offering of the Securities and transactions
contemplated in this Agreement furnished to the Underwriters will
be identical to any electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectuses
. The Company will deliver to each Underwriter, without
charge, as many copies of each preliminary prospectus as such
Underwriter may reasonably request, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933
Act. The Company will furnish to each Underwriter, without
charge, during the period when the Prospectus is required to be
delivered under the 1933 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may
reasonably request. The Prospectus and any amendments or
supplements thereto furnished to the Underwriters will be identical
to any electronically transmitted copies thereof filed with the
Commission pursuant to EDGAR, except to the extent permitted by
Regulation S-T.
(e) Continued Compliance with
Securities Laws . The Company will comply with the 1933
Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of
the Securities as contemplated in this Underwriting Agreement and
the Prospectus. If at any time when the Prospectus is
required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist
as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Company, to amend the Registration
Statement in order that the Registration Statement will
not
14
contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or to amend
or supplement the Prospectus in order that the Prospectus will not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading in the
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