Document:

EXHIBIT 10.01

 

MEMORANDUM

 

	
  To:

  	
  Stephen F. Fisher

  
	
   

  	
   

  
	
  From:

  	
  David J.
  Field

  
	
   

  	
   

  
	
  Date:

  	
  March 9,
  2004

  
	
   

  	
   

  
	
  Re:

  	
  Supplement
  to Employment Agreement

  

 

This
memorandum (this “Memorandum”)
will confirm our agreement to supplement the terms of your Employment Agreement, dated August 6, 2002 (the “Employment Agreement”), between Entercom
Communications Corp. (the “Company”)
and you, Stephen F. Fisher (“Employee”).

 

Intending to be legally bound
hereby, the parties agree as follows:

 

1.                                       This Memorandum shall serve as notice by the
parties, pursuant to Section 1 of the Employment Agreement, that the Employment
Agreement shall terminate February 28, 2005 without an automatic renewal.

 

2.                                       If the Employment Agreement terminates by its
terms on February 28, 2005, the parties agree that Employee’s employment with
the Company shall continue for a period of 9 months (the “Consulting Period”).  During the Consulting Period, Employee’s duties shall be that of a
part-time consultant to the Chief Executive Officer of the Company and not as
the Chief Financial Officer or other officer of the Company.  The terms of such employment during the
Consulting Period shall be as follows:

 

a.                                       Employee will be available to consult with and
provide advice and assistance to the Chief Executive Officer on any matters
relating to the Company’s business for up to twenty-five (25) hours per
month.  Such duties may be performed by
telephone or in the Company’s corporate office at such reasonable times as
requested by the Chief Executive Officer.

 

b.                                      Company will pay Employee a salary at the rate
of $1,000 per month.  Employee shall not
be entitled to additional option grants, incentive compensation, car allowance
or other bonus payments not already earned under the Employment Agreement on or
before February 28, 2005.

 

c.                                       Employee’s then existing options will continue
to vest during the Consulting Period in accordance with the terms of the
Entercom 1998 Equity Compensation Plan and the particular option grants.  Employee will be paid (based on Employee’s
then current salary rate) for any earned but unused vacation that Employee has
accrued as of February 28, 2005.

 

d.                                      Employee will be eligible to participate in
the Company’s 401(k) plan but as a part-time employee will not be eligible for
medical or dental insurance or other benefits available to full-time employees.

 

e.                                       Employee will not be eligible for any
severance payments and Employee agrees that the agreements and payments
contained in this Memorandum are in lieu of and in full satisfaction of any
severance payments that Employee may have been entitled to under the Employment
Agreement.

 

f.                                         Unless there is a further written agreement,
Employee’s employment with the Company pursuant to this Memorandum shall
terminate after the expiration of the Consulting Period.

 

3.                                       The commencement of the post-termination
Restrictive Covenants contained in Section 11 of the Employment Agreement shall
begin with the expiration of the Employment Agreement on February 28, 2005.

 

4.                                       Except as specifically set forth in this Memorandum,
the terms of this Memorandum are not intended to, and shall not, alter the
terms of Employee’s employment with the Company prior to the expiration of the
Employment Agreement on February 28, 2005.

 

* * * * * * * * * *

 

1

 

Please confirm your agreement
to the foregoing by signing and returning a copy of this Memorandum.

 

	
   

  	
  ENTERCOM
  COMMUNICATIONS CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J. Field

  	
   

  
	
   

  	
   

  	
  David J. Field

  
	
   

  	
   

  	
  President and Chief
  Executive Officer

  
	
   

  
	
   

  
	
  ACCEPTED & AGREED TO:

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Stephen F. Fisher

  	
   

  	
   

  
	
   

  	
  Stephen F.
  Fisher

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  March 9, 2004

  	
   

  	
   

  
								

 

2Exhibit
4.1

 

Medarex, Inc.

 

2.25% Convertible Senior Notes due
2011

 

 

Purchase Agreement

 

	
  April 27,
  2004

  	
   

  
	
   

  
	
  Goldman, Sachs
  & Co.,

  
	
  J.P. Morgan
  Securities Inc.,

  
	
  c/o Goldman,
  Sachs & Co.,

  
	
  85 Broad Street,

  
	
  New York, New
  York 10004.

  

 

Ladies and
Gentlemen:

 

Medarex,
Inc., a New Jersey corporation (the “Company”), proposes, subject to the terms
and conditions stated herein, to issue and sell to the Purchasers named in
Schedule I hereto (the “Purchasers”) an aggregate of $150,000,000
principal amount of the 2.25% Convertible Senior Notes due 2011 (“Convertible
Notes”), convertible into shares of Common Stock, $0.01 par value per share
(“Stock”), of the Company specified above (the “Firm Securities”) and, at the
election of the Purchasers, up to an aggregate of $50,000,000 additional
aggregate principal amount of the Convertible Notes (the “Optional Securities”)
(the Firm Securities and the Optional Securities which the Purchasers elect to
purchase pursuant to Section 2 hereof are herein collectively called the “Securities”).

 

1.                                       The Company
represents and warrants to, and agrees with, each of the Purchasers that:

 

(a)                             A preliminary offering
circular, dated April 26, 2004 (the “Preliminary Offering Circular”), and
an offering circular, dated April 27, 2004 (the “Offering Circular”), have
been prepared, and together with the Company’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2003, which is incorporated by
reference in the Offering Circular, are being furnished in connection with the offering
of the Securities and shares of the Stock issuable upon conversion
thereof.  Any reference to the
Preliminary Offering Circular or the Offering Circular shall be deemed to refer
to and include the Company’s most recent Annual Report on Form 10-K and all subsequent
documents filed with the United States Securities and Exchange Commission (the
“Commission”) pursuant to Section 13(a), 13(c), 14 or 15(d) of the United
States Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or
prior to the date of the Preliminary Offering Circular or the Offering
Circular, as the case may be, and any reference to the Preliminary Offering
Circular or the Offering Circular, as the case may be, as amended or
supplemented, as of any specified date, shall be deemed to include (i) any
documents filed with the Commission pursuant to Section 13(a), 13(c),

 

 

14 or 15(d) of the Exchange Act after the date of the Preliminary
Offering Circular or the Offering Circular, as the case may be, and prior to
such specified date and (ii) any Additional Issuer Information (as defined in
Section 5(f)) furnished by the Company prior to the completion of the
distribution of the Securities; and all documents filed under the Exchange Act
and so deemed to be included in the Preliminary Offering Circular or the
Offering Circular, as the case may be, or any amendment or supplement thereto
are hereinafter called the “Exchange Act Reports”.  The Exchange Act Reports, when they were or are filed with the
Commission, conformed or will conform in all material respects to the
applicable requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder in effect on such dates.  The Preliminary Offering Circular or the
Offering Circular and any amendments or supplements thereto and the Exchange
Act Reports did not and will not, as of their respective dates, contain an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by a Purchaser through Goldman, Sachs & Co. expressly for use
therein;

 

(b)                            Neither the Company nor any
of its subsidiaries has sustained since the date of the latest audited
financial statements included in the Offering Circular 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, otherwise than as set forth or
contemplated in the Offering Circular; and, since the respective dates as of
which information is given in the Offering Circular, there has not been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development, involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, shareholders’ equity or results of operations
of the Company and its subsidiaries, taken as a whole, otherwise than as set
forth or contemplated in the Offering Circular;

 

(c)                             The Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of New Jersey, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Offering Circular, and has been duly qualified as a foreign corporation for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties or conducts any business so
as to require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; and each subsidiary of the Company has been duly incorporated or
organized and is validly existing as a corporation in good standing under the
laws of its jurisdiction of incorporation;

 

(d)                            The Company has an
authorized capitalization as set forth in the Offering Circular, and all of the
issued shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable; the shares of
Stock initially issuable upon conversion of the Securities (“Conversion Stock”)
have been duly and validly authorized and reserved for issuance and, when
issued and delivered in accordance with the provisions of the Securities and
the Indenture referred to below, will be duly and validly issued, fully paid
and non-assessable and will conform to the description of the Stock contained
in the Offering Circular; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and (except for directors’ qualifying shares) are
owned directly or

 

2

 

indirectly by the Company, free and clear of all liens, encumbrances,
security interests, equities or claims;

 

(e)                             The Securities have been
duly authorized and, when issued and delivered pursuant to this Agreement, will
have been duly executed, authenticated, issued and delivered and will
constitute valid and legally binding obligations of the Company entitled to the
benefits provided by the indenture to be dated as of May 3, 2004 (the
“Indenture”) between the Company and Wilmington Trust Company, as Trustee (the
“Trustee”), under which they are to be issued, which will be substantially in
the form previously delivered to you; the Indenture has been duly authorized
and, when executed and delivered by the Company and the Trustee, the Indenture
will constitute a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating to
or affecting creditors’ rights and to general equity principles; and the
Securities and the Indenture will conform in all material respects to the
descriptions thereof in the Offering Circular and will be in substantially the
form previously delivered to you;

 

(f)                               None of the transactions
contemplated by this Agreement (including, without limitation, the use of the
proceeds from the sale of the Securities) will violate or result in a violation
of Section 7 of the Exchange Act, or any regulation promulgated
thereunder, including, without limitation, Regulations G, T, U, and X of the
Board of Governors of the Federal Reserve System;

 

(g)                            Prior to the date hereof,
neither the Company nor any of its affiliates has taken any action which is
designed to or which has constituted or which might have been expected to cause
or result in stabilization or manipulation of the price of any security of the
Company in connection with the offering of the Securities;

 

(h)                            The issue and sale of the
Securities and the compliance by the Company with all of the provisions of the
Securities, the Indenture, the Registration Rights Agreement (as hereinafter
defined in Section 1(s) hereof) and this Agreement and the consummation of
the transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries is
bound or to which any of the property or assets of the Company or any of its
subsidiaries is subject, except for any such conflict, breach, violation or
default which would not have a material adverse effect on the business, results
of operation or financial condition of the Company and its subsidiaries, taken
as a whole (a “Material Adverse Effect”), nor will such action result in any
violation of the provisions of the Certificate of Incorporation or By-laws of
the Company or any existing statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such court
or governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company of the transactions contemplated
by this Agreement, the Registration Rights Agreement or the Indenture, except
for the filing of a notice on Form D and a registration statement by the
Company with the Commission pursuant to the United States Securities Act of
1933, as amended (the “Act”), pursuant to Regulation D promulgated under the
Act and Section 5(l) hereof and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution of the
Securities by the Purchasers;

 

3

 

(i)                                Neither the Company nor
any of its subsidiaries is in violation of its Certificate of Incorporation or
By-laws or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which it is a
party or by which it or any of its properties may be bound which would
individually or in the aggregate have a Material Adverse Effect;

 

(j)                                The statements set
forth in the Offering Circular under the captions “Description of Notes” and
“Description of Capital Stock”, insofar as they purport to constitute a summary
of the terms of the Securities and the Stock, under the caption “Certain United
States Federal Income Tax Consequences”, and under the caption “Underwriting”
(other than the statements made therein in conformity with and in reliance on
written information furnished by the Purchasers expressly for use therein) and
“Risk Factors — We depend on patents and proprietary rights” and in the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2003 under the captions “Business — Intellectual Property”
and “— Regulatory Issues”, insofar as they purport to describe the provisions
of the laws and documents referred to therein, are accurate and complete in all
material respects;

 

(k)                             Other than as set forth in
the Offering Circular, there are no court, arbitration, legal or governmental
proceedings pending to which the Company or any of its subsidiaries is a party
or of which any property of the Company or any of its subsidiaries is the
subject which, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a material adverse
effect on the current or future financial position, shareholders’ equity or
results of operations of the Company and its subsidiaries, taken as a whole;
and, to the best of the Company’s knowledge, no such proceedings are threatened
or contemplated by governmental authorities or threatened by others;

 

(l)                                When the Securities are
issued and delivered pursuant to this Agreement, the Securities will not be of
the same class (within the meaning of Rule 144A under the Act) as securities
which are listed on a national securities exchange registered under
Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system;

 

(m)                          The Company is subject to
Section 13 or 15(d) of the Exchange Act;

 

(n)                            The Company is not, and
after giving effect to the offer and sale of the Securities will not be, an
“investment company”, as such term is defined in the United States Investment
Company Act of 1940, as amended (the “Investment Company Act”);

 

(o)                            Neither the Company, nor
any person acting on its or their behalf has offered or sold the Securities by
means of any general solicitation or general advertising within the meaning of
Rule 502(c) under the Act;

 

(p)                            Except as disclosed in the
Offering Circular, within the preceding six months, neither the Company nor any
other person acting on behalf of the Company has offered or sold to any person
any Securities, or any securities of the same or a similar class as the
Securities, other than Securities offered or sold to the Purchasers hereunder.  The Company will take reasonable precautions
designed to insure that any offer or sale, direct or indirect, in the United
States or to any U.S. person (as defined in Rule 902 under the Act) of any
Securities or any substantially similar security issued by the Company, within
six months subsequent to the date on which the distribution of the Securities
has been completed (as notified to the Company by Goldman, Sachs & Co.), is
made

 

4

 

under restrictions and other circumstances reasonably designed not to
affect the status of the offer and sale of the Securities in the United States
and to U.S. persons contemplated by this Agreement as transactions exempt from
the registration provisions of the Securities Act;

 

(q)                            Neither the Company nor any
of its affiliates does business with the government of Cuba or with any person
or affiliate located in Cuba within the meaning of Section 517.075,
Florida Statutes;

 

(r)                               Ernst &
Young LLP, who have audited certain financial statements of the Company
and its subsidiaries, are independent public accountants as required by the Act
and the rules and regulations of the Commission thereunder;

 

(s)                             The Registration Rights
Agreement between the Company and the Purchasers to be dated as of May 3,
2004 (the “Registration Rights Agreement”) has been duly authorized and, when
executed and delivered by the Company (assuming due authorization, execution
and delivery by the Purchasers), will constitute a valid and legally binding
agreement of the Company enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditors’ rights and to general
equity principles; and the Registration Rights Agreement will conform in all
material respects to the description thereof in the Offering Circular;

 

(t)                               Except as disclosed in
the Offering Circular, no holder of any security of the Company (other than the
Securities and the Conversion Stock) has or will have any right to require the
registration of such security by virtue of any transactions contemplated by
this Agreement or the Registration Rights Agreement other than any such right
that has been expressly waived in writing;

 

(u)                            The Company and its
subsidiaries own or possess or can acquire on reasonable terms adequate
licenses or other rights to use the patents and patent applications,
copyrights, trademarks, service marks, trade names, technology and know-how
(including trade secrets and other unpatented and/or unpatentable proprietary
rights) necessary in any material respect to conduct their business in the
manner described in the Offering Circular (collectively, the “Company
Intellectual Property”); and except as disclosed in the Offering Circular,
neither the Company nor any of its subsidiaries has received any notice of
infringement (and the Company does not know of any such infringement) of
asserted rights of others with respect to the Company Intellectual Property,
which would reasonably be expected to result in any Material Adverse Effect;

 

(v)                            The Company and its
subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their business as presently conducted, including without limitation,
all such certificates, authorizations and permits required by the United States
Food and Drug Administration (the “FDA”), the Nuclear Regulatory Commission
(the “NRC”) or any other federal, state or foreign agencies or bodies engaged
in the regulation of pharmaceuticals or biohazardous substances, except where
the failure to possess such certificates, authorizations and permits would not,
singly or in the aggregate, have a Material Adverse Effect; neither the Company
nor any subsidiary 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, would result in a Material Adverse Effect; the Company and
its subsidiaries are in compliance in all material respects with all applicable
federal, state, local and foreign laws, regulations, orders and decrees
governing its business as currently conducted, including without limitation,
all regulations prescribed

 

5

 

by the FDA, the NRC or any other federal, state or foreign agencies or
bodies engaged in the regulation of pharmaceuticals, biohazardous substances or
radioactive materials, except where noncompliance would not, singly or in the
aggregate, have a Material Adverse Effect; and to the knowledge of the Company,
other than as set forth in the Offering Circular, no prospective change in any
applicable federal, state, local or foreign laws, rules or regulations has been
adopted which, when made effective, would have a Material Adverse Effect;

 

(w)                          Each contract, agreement and
license set forth in Annex II hereto is legal, valid, binding, enforceable, and
in full force and effect against the Company or its subsidiary party thereto,
as the case may be, and to the knowledge of the Company, each other party
thereto; neither the Company nor any of its subsidiaries nor, to the Company’s
knowledge, any other party is in breach or default with respect to any such
contract, agreement or license, which breach or default could reasonably be
expected to have a Material Adverse Effect, and, to the Company’s knowledge, no
event has occurred which with notice or lapse of time or both would constitute
a breach or default which would reasonably be expected to have a Material
Adverse Effect, or permit the termination, material modification, or
acceleration of a material obligation, under any such contract, agreement or
license; and neither the Company nor any of its subsidiaries has received or
given any notice that it or any party has repudiated any material provision of
any such contract, agreement or license; and

 

(x)                              None of the Company or
any of its subsidiaries is in violation of any statute, or any rule,
regulation, decision or order of any governmental agency or body or any court
relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (“Environmental Laws”), is to its knowledge
liable for any off-site disposal or contamination pursuant to any Environmental
Laws and is subject to any claim relating to any Environmental Laws in any such
case the effect of which would result in a Material Adverse Effect; hazardous
or toxic substances include (i) any “hazardous substance” as defined in the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
as amended, (ii) any “hazardous waste” as defined by the Resource Conservation
and Recovery Act, as amended, (iii) any petroleum or petroleum product, (iv)
any polychlorinated biphenyl and (v) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material, waste or substance regulated under or
within the meaning of any other Environmental Law.

 

2.                                       Subject to the
terms and conditions herein set forth, (a) the Company agrees to issue and sell
to each of the Purchasers, and each of the Purchasers agrees, severally and not
jointly, to purchase from the Company, at a purchase price of 97% of the
principal amount thereof, the principal amount of Securities set forth opposite
the name of such Purchaser in Schedule I hereto, and (b) in the event and
to the extent that the Purchasers shall exercise the election to purchase
Optional Securities as provided below, the Company agrees to issue and sell to
each of the Purchasers, and each of the Purchasers agrees, severally and not
jointly, to purchase from the Company, at the same purchase price set forth in
clause (a) of this Section 2, that portion of the aggregate principal
amount of the Optional Securities as to which such election shall have been
exercised (to be adjusted by you so as to eliminate fractions of $1,000) determined
by multiplying such aggregate principal amount of Optional Securities by a
fraction, the numerator of which is the maximum aggregate principal amount of
Optional Securities which such Purchaser is entitled to purchase as set forth
opposite the name of such Purchaser in Schedule I hereto and the
denominator of which is the maximum aggregate principal amount of Optional
Securities which all of the Purchasers are entitled to purchase hereunder.

 

6

 

The
Company hereby grants to the Purchasers the right to purchase at their election
up to $50,000,000 aggregate principal amount of Optional Securities, at the
purchase price set forth in clause (a) of the first paragraph of this
Section 2, for the sole purpose of covering sales of securities in excess
of the aggregate principal amount of Firm Securities.  Any such election to purchase Optional Securities may be
exercised by written notice from you to the Company, given within a period of
30 calendar days after the date of this Agreement, setting forth the aggregate
principal amount of Optional Securities to be purchased and the date on which
such Optional Securities are to be delivered, as determined by you but in no
event earlier than the First Time of Delivery (as defined in Section (4)
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.

 

3.                                       Upon the
authorization by you of the release of the Securities, the several Purchasers
propose to offer the Securities for sale upon the terms and conditions set
forth in this Agreement and the Offering Circular and each Purchaser hereby
represents and warrants to, and agrees with the Company that:

 

(a)                             It will offer and sell the
Securities only to persons who it reasonably believes are “qualified
institutional buyers” (“QIBs”) within the meaning of Rule 144A under the Act in
transactions meeting the requirements of Rule 144A;

 

(b)                            It is an “accredited
investor” within the meaning of Rule 501 under the Act; and

 

(c)                             It will not offer or sell
the Securities by any form of general solicitation or general advertising,
including but not limited to the methods described in Rule 502(c) under the
Act.

 

4.                                       (a) The
Securities to be purchased by each Purchaser hereunder will be represented by
one or more definitive global Securities in book-entry form which will be
deposited by or on behalf of the Company with The Depository Trust Company
(“DTC”) or its designated custodian. 
The Company will deliver the Securities to Goldman, Sachs & Co., for
the account of each Purchaser against payment by or on behalf of such Purchaser
of the purchase price therefor by wire transfer of Federal (same-day) funds to
the account specified by the Company to you at least forty-eight hours in
advance, by causing DTC to credit the Securities to the account of Goldman,
Sachs & Co. at DTC.  The Company
will cause the certificates representing the Securities to be made available to
Goldman, Sachs & Co. for checking at least twenty-four hours prior to the
Time of Delivery (as defined below) at the office of DTC or its designated
custodian (the “Designated Office”). 
The time and date of such delivery and payment shall be, with respect to
the Firm Securities, 9:30 a.m., New York City time, on May 3, 2004, or
such other time and date as you and the Company may agree upon in writing, and,
with respect to the Optional Securities, 9:30 a.m., New York City time, on the
date specified by the Purchasers in the written notice given by Goldman, Sachs
& Co. of the Purchasers’ election to purchase such Optional Securities, or
such other time and date as the Purchasers and the Company may agree upon in
writing.  Such time and date for delivery
of the Firm Securities is herein called the “First Time of Delivery”, such time
and date for delivery of the Optional Securities, if not the First Time of
Delivery, is herein called the “Second Time of Delivery”, and each such time
and date for delivery is herein called a “Time of Delivery”.

 

(b)                                 The
documents to be delivered at the Time of Delivery by or on behalf of the
parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Purchasers
pursuant to Section 7 hereof, will be delivered at such time

 

7

 

and date at the offices of Sullivan & Cromwell LLP, New York,
New York 10004  (the “Closing Location”), and the Securities will be
delivered at the Designated Office, all at the Time of Delivery.  A meeting will be held at the Closing
Location at 5:00 p.m., New York City time, on the New York Business Day next
preceding the Time of Delivery, at which meeting the final drafts of the documents
to be delivered pursuant to the preceding sentence will be available for review
by the parties hereto.  For the purposes
of this Section 4, “New York Business Day” shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York are generally authorized or obligated by law or
executive order to close.

 

5.                                       The Company
agrees with each of the Purchasers:

 

(a)                             To prepare the Offering
Circular in a form approved by you; to make no amendment or any supplement to
the Offering Circular which shall be disapproved by you promptly after
reasonable notice thereof; and to furnish you with copies thereof;

 

(b)                            Promptly from time to time
to take such action as you may reasonably request to qualify the Securities and
the shares of Stock issuable upon conversion of the Securities for offering and
sale under the securities laws of such jurisdictions as you may request and to
comply with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to complete the
distribution of the Securities, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;

 

(c)                             To furnish the Purchasers
with five (5) copies of the Offering Circular and each amendment or supplement
thereto signed by an authorized officer of the Company with the independent
accountants’ report(s) in the Offering Circular, and any amendment or
supplement containing amendments to the financial statements covered by such
report(s), signed by the accountants, and additional written  and electronic copies thereof in such
quantities as you may from time to time reasonably request, and if, at any time
prior to the expiration of nine months after the date of the Offering Circular,
any event shall have occurred as a result of which the Offering Circular as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made when such Offering Circular is delivered, not misleading, or, if for any
other reason it shall be necessary or desirable during such same period to
amend or supplement the Offering Circular, to notify you and upon your request
to prepare and furnish without charge to each Purchaser and to any dealer in
securities as many written  and
electronic copies as you may from time to time reasonably request of an amended
Offering Circular or a supplement to the Offering Circular which will correct
such statement or omission or effect such compliance;

 

(d)                            During the period beginning
from the date hereof and continuing until the date 60 days after the date of
this Agreement, not to directly or indirectly offer, sell contract to sell, or
otherwise dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Securities or the Stock,
including but not limited to any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than as expressly disclosed in the
Offering Circular or pursuant to employee stock option and purchase plans
existing on, or upon the conversion or exchange of convertible, exercisable or
exchangeable securities outstanding as of, the date of this Agreement), without
your prior written consent; provided,
however, that the Company may issue shares of Stock after the 14th

 

8

 

day of this 60-day period to satisfy payment obligations under certain
acquisition agreements and strategic partnership, collaboration or licensing
arrangements (each, a “Transaction”) in an aggregate amount for all
Transactions not to exceed $10,000,000, based on the market price of the Stock
on the dates of issuance thereof; and provided
further, that nothing in this Section 5(d) shall preclude the
Company from issuing additional shares of Stock in Transactions after the 14th
day of this 60-day period in excess of the aggregate amount of $10,000,000, so
long as the recipients of such additional shares of Stock each agree to be
bound by a lock-up agreement substantially similar to the terms and conditions
of this Section 5(d) before the provisos and covering a period of time
exceeding 60 days from the date hereof;

 

(e)                             Not to be or become, at
any time prior to the expiration of three years after the Time of Delivery, an
open-end investment company, unit investment trust, closed-end investment
company or face-amount certificate company that is or is required to be
registered under Section 8 of the Investment Company Act;

 

(f)                               At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, for the
benefit of holders from time to time of Securities, to furnish at its expense,
upon request, to holders of Securities and prospective purchasers of securities
information (the “Additional Issuer Information”) satisfying the requirements
of subsection (d)(4)(i) of Rule 144A under the Act;

 

(g)                            If requested by you, to use
its best efforts to cause such Designated Securities to be eligible for the
PORTALÒ trading system of the National Association of
Securities Dealers, Inc.;

 

(h)                            To furnish to the holders
of the Securities as soon as practicable after the end of each fiscal year an
annual report (including a balance sheet and statements of income,
shareholders’ equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the date of the Offering
Circular), to make available to its shareholders consolidated summary financial
information of the Company and its subsidiaries for such quarter in reasonable
detail;

 

(i)                                During a period of five
years from the date of the Offering Circular, to furnish to you copies of all
reports or other communications (financial or other) furnished to shareholders
of the Company, and to (i) deliver or make available to you (either in paper
copies or, to the extent that information is filed electronically,
electronically) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or any national
securities exchange on which the Securities or any class of securities of the
Company is listed; and (ii) deliver to you such additional information concerning
the business and financial condition of the Company as you may from time to
time reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or to the
Commission);

 

(j)                                During the period of
three years after the Time of Delivery, the Company will not, and will not
permit any of its “affiliates” (as defined in Rule 144 under the Securities
Act) to, resell any of the Securities which constitute “restricted securities”
under Rule 144 that have been reacquired by any of them;

 

(k)                             Pursuant to the
Registration Rights Agreement, the Company shall file within 90 days and use
its best efforts to cause to be declared or become effective under the Act, on
or prior to 210

 

9

 

days after the Time of Delivery, a registration statement on Form S-3
providing for the registration resale of the Securities and the Conversion Stock;

 

(l)                                To use the net proceeds
received by it from the sale of the Securities pursuant to this Agreement in
the manner specified in the Offering Circular under the caption “Use of
Proceeds”;

 

(m)                          To reserve and keep available
at all times, free of preemptive rights, shares of Stock for the purpose of
enabling the Company to satisfy any obligations to issue Conversion Stock;

 

(n)                            To use its best efforts to
list for quotation, subject to notice of issuance, the Conversion Stock on the
Nasdaq National Market System (“NASDAQ”); and

 

(o)                            To cause each executive
officer or director of the Company to execute and deliver an agreement
substantially to the effect set forth in Section 5(d) hereof in form
previously delivered to you.

 

6.                                       The Company
covenants and agrees with the several Purchasers that the Company will pay or
cause to be paid the following: (i) the fees, disbursements and expenses of the
Company’s counsel and accountants in connection with the issue of the
Securities and the shares of Stock issuable upon conversion of the Securities;
(ii) the cost of printing or producing any Agreement among Purchasers, this
Agreement, the Indenture, the Registration Rights Agreement, the Blue Sky and
Legal Investment Memoranda, closing documents (including any compilations
thereof) and any other documents in connection with the offering, purchase,
sale and delivery of the Securities; (iii) all expenses in connection with the
qualification of the Securities and the shares of Stock issuable upon
conversion of the Securities for offering and sale under state securities laws
as provided in Section 5(b) hereof, including the reasonable fees and
disbursements of counsel for the Purchasers in connection with such
qualification and in connection with the Blue Sky and legal investment surveys;
(iv) the cost of preparing the Securities; (v) the fees and expenses
of the Trustee and any agent of the Trustee  and
the fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities; and (vi) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. 
It is understood, however, that, except as provided in this Section, and
Sections 8 and 12 hereof, the Purchasers will pay all of their own costs and
expenses, including the fees of their counsel, transfer and income taxes on
resale of any of the Securities   by them, and any advertising expenses
connected with any offers they may make.

 

7.                                       The obligations
of the Purchasers hereunder shall be subject, in their discretion, to the
condition that all representations and warranties and other statements of the
Company herein are, at and as of such Time of Delivery, true and correct, the
condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:

 

(a)                             Sullivan &
Cromwell LLP, counsel for the Purchasers, shall have furnished to you such
written opinion or opinions, dated such Time of Delivery, with respect to the
Securities, Stock issuable upon conversion of the Securities, the Indenture,
this Agreement, the Offering Circular and such other related matters as you may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;

 

10

 

(b)                            Satterlee Stephens Burke
& Burke LLP, counsel for the Company, shall have furnished to you their
written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that:

 

(i)                                     The
Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of New Jersey, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Offering Circular;

 

(ii)                                  The
Company has an authorized capitalization as set forth in the Offering Circular,
and all of the issued shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable; and the
shares of Stock initially issuable upon conversion of the Securities have been
duly and validly authorized and reserved for issuance and, when issued and
delivered in accordance with the provisions of the Securities and the
Indenture, will be duly and validly issued and fully paid and non-assessable,
and will conform to the description of the Stock contained in the Offering
Circular;

 

(iii)                               The
Company has been duly qualified as a foreign corporation for the transaction of
business and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so as to require
such qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a Material Adverse Effect (such counsel
being entitled to rely in respect of the opinion in this clause upon opinions
of local counsel and in respect of matters of fact upon certificates of
officers of the Company, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such opinions and
certificates);

 

(iv)                              Each
domestic subsidiary of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its jurisdiction
of incorporation; and all of the issued shares of capital stock of each such
subsidiary have been duly and validly authorized and issued, are fully paid and
non-assessable, and (except for directors’ qualifying shares) are held of
record by the Company, free and clear of all liens, encumbrances, security
interests, equities or claims (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Company or its
subsidiaries, provided that such counsel shall state that they believe that
both you and they are justified in relying upon such opinions and
certificates);

 

(v)                                 The
Company and its domestic subsidiaries have good and marketable title in fee
simple to all real property owned by them, in each case free and clear of all
liens, encumbrances, security interests and defects except such as are described
in the Offering Circular or such as do not materially affect the value of such
property and do not interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries; and any real property and
buildings held under lease by the Company and its subsidiaries are held by them
under valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its subsidiaries (in giving the
opinion in this clause, such counsel may state that no examination of record
titles for the purpose of such opinion has been made, and that they are relying
upon a general review of

 

11

 

the titles of the Company and its domestic
subsidiaries, upon opinions of local counsel and abstracts, reports and
policies of title companies rendered or issued at or subsequent to the time of
acquisition of such property by the Company or its subsidiaries, upon opinions
of counsel to the lessors of such property and, in respect of matters of fact,
upon certificates of officers of the Company or its subsidiaries, provided that
such counsel shall state that they believe that both you and they are justified
in relying upon such opinions, abstracts, reports, policies and certificates);

 

(vi)                              To
the best of such counsel’s knowledge and other than as set forth in the
Offering Circular, there are no legal or governmental proceedings pending to
which the Company or any of its domestic subsidiaries is a party or of which
any property of the Company or any of its domestic subsidiaries is the subject
which, if determined adversely to the Company or any of its domestic
subsidiaries, would individually or in the aggregate have a material adverse
effect on the current or future consolidated financial position, shareholders’
equity or results of operations of the Company and its domestic subsidiaries;
and, to the best of such counsel’s knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by others;

 

(vii)                           This
Agreement has been duly authorized, executed and delivered by the Company;

 

(viii)                        The
Securities have been duly authorized, executed, authenticated, issued and
delivered and constitute valid and legally binding obligations of the Company
entitled to the benefits provided by the Indenture; and the Securities and the
Indenture conform in all material respects to the summary descriptions thereof
in the Offering Circular;

 

(ix)                                The
Indenture has been duly authorized, executed and delivered by the parties
thereto and constitutes a valid and legally binding instrument, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditors’ rights and to general equity principles (whether asserted in an
action at law or in equity);

 

(x)                                   The
Registration Rights Agreement has been duly authorized, executed and delivered
by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors’ rights and to
general equity principles (whether asserted in an action at law or in equity);
and the Registration Rights Agreement conforms in all material respects to the
summary thereof in the Offering Circular;

 

(xi)                                The
issue and sale of the Securities being delivered to the Purchasers at such Time
of Delivery and the compliance by the Company with all of the provisions of the
Securities, the Indenture, this Agreement and the Registration Rights Agreement
and the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument filed as an exhibit to
any of the Company’s filings with the Commission to which the Company or any of
its domestic subsidiaries is a party or by which the Company or any of its
domestic subsidiaries is bound or to which any of the property or assets of the
Company or any of its

 

12

 

domestic subsidiaries is subject, nor will
such actions result in any violation of the provisions of the Certificate of
Incorporation or By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or body
having jurisdiction over the Company or any of its subsidiaries or any of their
material properties;

 

(xii)                             No
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue
and sale of the Securities being issued at such Time of Delivery or the
consummation by the Company of the transactions contemplated by this Agreement,
the Indenture or the Registration Rights Agreement, except such as may be
required under the Act in connection with the Securities and the Conversion
Stock and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase, offer and sale of the Securities by the
Purchasers;

 

(xiii)                          The
statements set forth in the Offering Circular under the captions “Description of Notes” and “Description of
Capital Stock”, insofar as they purport to constitute a summary of the terms of
the Securities, and the Stock, under the caption “Material United States
Federal Income Tax Considerations”, and under the caption “Underwriting”,
insofar as they purport to describe the provisions of the laws and documents
referred to therein, are accurate and complete in all material respects;

 

(xiv)                         The
Exchange Act Reports (other than the financial statements and related notes
thereto and schedules therein, as to which such counsel need express no
opinion), when they were filed with the Commission, complied as to form in all
material respects with the requirements of the Exchange Act, and the applicable
rules and regulations of the Commission thereunder as then in effect; and
nothing has come to the attention of such counsel to lead them to believe that
any of 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 (with respect to
the statements in the Exchange Act Reports relating to patent matters and the
description or summaries of federal statutes, laws, regulations or procedures
under the Federal Food, Drug and Cosmetic Act, the Prescription Drug User Fee
Act, the Public Heath Service Act and the United States Food and Drug
Administration regulations concerning its regulation of drugs or biological
products, such counsel shall be entitled to rely in rendering  the opinion in this clause upon the opinions
of counsel set forth in Sections 7(d) and (e) hereof, respectively, provided
that such counsel shall state that they believe that both you and they are
justified in relying upon such opinions);

 

(xv)                            Assuming
the truth, accuracy and completeness of the Purchasers’ representations set
forth in this Agreement, no registration of the Securities under the Act, and
no qualification of an indenture under the United States Trust Indenture Act of
1939 with respect thereto, is required for the offer, sale and initial resale
of the Securities by the Purchasers in the manner contemplated by this
Agreement and the Offering Circular;

 

(xvi)                         Nothing
has come to the attention of such counsel that would lead them to believe that
the Offering Circular and any further amendments or supplements thereto made by
the Company prior to the Time of Delivery (other than the financial statements
and related

 

13

 

notes thereto and schedules and matters which
are the subject of the audit opinion included therein, as to which such counsel
need express no opinion) contained as of its date or contains as of the Time of
Delivery an untrue statement of a material fact or omitted or omits, as the
case may be, to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(with respect to the statements in the Offering Circular relating to patent
matters and the description or summaries of federal statutes, laws, regulations
or procedures under the Federal Food, Drug and Cosmetic Act, the Prescription
Drug User Fee Act, the Public Heath Service Act and the United States Food and
Drug Administration regulations concerning its regulation of drugs or
biological products, such counsel shall be entitled to rely in rendering the
opinion in this clause upon the opinions of counsel set forth in Sections 7(d)
and (e) hereof, respectively, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such opinions);
and

 

(xvii)                      The Company
is not, and after giving effect to the offer and sale of the Securities will not
be, an “investment company” or an entity “controlled” by an “investment
company”, as such terms are defined in the Investment Company Act.

 

(c)                             W. Bradford Middlekauff,
general counsel of the Company, shall have furnished to the Purchasers his
written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that neither the Company nor any of its
subsidiaries is in violation of its Certificate of Incorporation or By-laws,
except for any violation which would not have a Material Adverse Effect or, in
the case of the Company, affect the validity or enforceability of the
Securities;

 

(d)                            Lahive & Cockfield,
Darby & Darby P.C. and Dorsey & Whitney LLP, outside patent counsel for
the Company, collectively shall have furnished to the Purchasers their written
opinions, dated such Time of Delivery, in form and substance satisfactory to
you, substantially to the effect that:

 

(i)                                     Such
counsel is unaware of any facts which would preclude the Company from having
clear title to any of the Company’s patents and patent applications except as
described in the Offering Circular. To the best of its knowledge, such counsel
and the Company have complied with the required duty of candor and good faith
in dealing with the U.S. Patent and Trademark Office (the “PTO”), including the
duty to disclose to the PTO all information believed to be material to the
patentability of the Company’s pending U.S. patent applications scheduled by
such counsel. Such counsel has no knowledge of any facts that would form the
basis for a belief that the Company lacks any rights or licenses to use all
patents and patent applications, trade secrets, trademarks, service marks, other
distinctive indicia of origin, internet domain names, copyrights, rights of
publicity, industrial design registrations and invention disclosure or other
proprietary information or materials necessary to conduct the
business now conducted by the Company as described in the Offering Circular,
except as described in the Offering Circular. Such counsel has no knowledge of
any facts which would form a basis for a belief that any of the patents
scheduled by such counsel would necessarily be determined to be unenforceable
or invalid except as described in the Offering Circular. Such counsel have no
knowledge of any facts which would form a basis for a belief that any of the
patent applications scheduled by such Counsel do not contain patentable subject
matter, except as described in the Offering Circular. Such counsel knows of no
pending or threatened action, suit, proceeding or claim by others that the
Company is infringing any patent, trade secrets, trademarks, service marks, other
distinctive indicia of origin, internet domain names, 

 

14

 

copyrights, rights of publicity, industrial design registrations and
invention disclosure or other proprietary information or materials which
could result in any material adverse effect on the Company, except as described
in the Offering Circular;

 

(ii)                                  To
the knowledge of such counsel the Company is or in due course will be
identified in the records of the PTO as the holder of record of the U.S.
patents and patent applications listed in such counsel’s schedule as owned
by it; the Company is or in due course will be listed in the records of
corresponding foreign agencies with respect to the foreign counterparts of the
foregoing as listed in the Patent Schedule; and the patents and patent
applications listed in the such counsels’ schedule as owned by it have
been or in due course will be assigned to the Company;

 

(iii)                               To
the knowledge of such counsel, there are no claims of third parties to any
ownership interest or lien with respect to any of the Company’s patents or
patent applications, trade secrets, trademarks, service marks, other
distinctive indicia of origin, internet domain names, copyrights, rights of
publicity, industrial design registrations and invention disclosure or other
proprietary information or materials or for any such patents or
patent applications, trade secrets, trade marks, service marks or other
proprietary information or materials licensed by the Company from third
parties;

 

(iv)                              To
the knowledge of such counsel, neither the Company nor any of its subsidiaries
is infringing or otherwise violating any valid and enforceable patents, trade
secrets, trademarks, service marks, other distinctive indicia of origin,
internet domain names, copyrights, rights of publicity, industrial design
registrations and invention disclosure or other proprietary information or
materials, of others. To the knowledge of such counsel, there are
also no infringements by others of any of the Company’s patents, trade
secrets, trademarks, service marks, other distinctive indicia of origin,
internet domain names, copyrights, rights of publicity, industrial design
registrations and invention disclosure or other proprietary information or
materials which in the judgment of such counsel could affect
materially the use thereof by the Company;

 

(v)                                 To
the knowledge of such counsel, there are no legal or governmental proceedings
pending against the Company relating to patents, trade secrets, trademarks, service
marks or other proprietary information or materials, other than PTO
review of pending applications for patents, including appeal and reissue
proceedings, and, to the best knowledge of such counsel, no such proceedings
are threatened or contemplated by governmental authorities or others;

 

(vi)                              To
the knowledge of such counsel, there are no contracts or other documents
material to the Company’s patents other than those described in the Offering
Circular;

 

(vii)                           Although
such counsel has not verified the accuracy or completeness of the statements
contained in the sections of the Offering Circular, nothing has come to the
attention of such counsel that would form a basis for a belief that, with
respect to the Offering Circular under the caption “Risk Factors — We
depend on patents and proprietary rights” and in the Company’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2003 under the caption
“Business — Intellectual Property” or any further amendment thereto made
by the Company prior to such Time of Delivery contained an untrue statement of
a material

 

15

 

fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and

 

(viii)                        Such
counsel have verified the accuracy and completeness of the statements, as of
the date thereof, contained in the 10-K under the heading
“Business—Intellectual Property” 
concerning the patents and patent applications purported to be owned by
the Company listed in such counsel’s schedule;

 

provided, however, that with respect to each such opinion, Dorsey &
Whitney shall be entitled to omit any phrases appearing above in italics.

 

(e)                             Covington & Burling,
special counsel for the Company, shall have furnished to the Purchasers their
written opinion, dated such Time of Delivery, in form and substance
satisfactory to you, to the effect that the statements set forth in the
Company’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2003 under the captions “Business — Regulatory Issues”, “Risk
Factors — We are subject to extensive and costly government regulation” and
“Risk Factors — If we or our manufacturing partners do not comply with current
good manufacturing practices requirements, we will not be able to commercialize
our product candidates”, “Risk Factors – We do not have, and may never obtain,
the regulatory approvals we need to market our product candidates”, and “Risk
Factors – Even if approved, our products will be subject to extensive
post-approval regulation”  summarize the
provisions of the Federal Food, Drug and Cosmetic Act, the Prescription Drug
User Fee Act and the Public Health Service Act and the rules and regulations
thereunder that are material to the Company’s business and, insofar as they
purport to describe the provisions of the laws and regulations referred to
therein, are accurate, complete and fair.

 

(f)                               On the date of the
Offering Circular prior to the execution of this Agreement and also at each
Time of Delivery, Ernst & Young LLP shall have furnished to you a letter or
letters, dated the respective dates of delivery thereof, in form and substance
satisfactory to you, to the effect set forth in Annex I hereto;

 

(g)                            (i) Neither the Company nor
any of its subsidiaries shall have sustained since the date of the latest
audited financial statements included in the Offering Circular any loss or interference
with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Offering Circular, and (ii) since the respective dates as of which information
is given in the Offering Circular there shall not have been any change in the
capital stock or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, shareholders’ equity or
results of operations of the Company and its subsidiaries, otherwise than as
set forth or contemplated in the Offering Circular, the effect of which, in any
such case described in clause (i) or (ii), is in your judgment so material and
adverse as to make it impracticable or inadvisable to proceed with the sale and
delivery of the Securities being issued at such Time of Delivery on the terms
and in the manner contemplated in this Agreement and  in the Offering Circular;

 

(h)                            On or after the date hereof
and at or prior to such Time of Delivery there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange or on NASDAQ; (ii) a suspension or
material limitation in trading in the Company’s securities on NASDAQ; (iii) a
general moratorium on commercial banking activities declared by either Federal
or New York State authorities or a material disruption in commercial

 

16

 

banking or securities settlement or clearance services in the United
States; (iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency or war,
if the effect of any such event specified in this clause (iv) in your judgment
makes it impracticable or inadvisable to proceed with the sale and delivery of
the Securities on the terms and in the manner contemplated in the Offering
Circular; or (v) the occurrence of any other calamity or crisis or any change
in the existing, financial, political or economic conditions in the United
States or elsewhere which, in your judgment, would materially and adversely
affect the financial markets or the markets for the Securities and other debt
securities or the market for equity securities;

 

(i)                                The Securities have
been designated for trading on PORTAL;

 

(j)                                The Conversion Stock
shall have been duly listed, subject to notice of issuance, on NASDAQ;

 

(k)                             The Registration Rights
Agreement shall have been duly authorized, executed and delivered by the
Company;

 

(l)                                The Company shall have
furnished or caused to be furnished to you at such Time of Delivery
certificates of officers of the Company satisfactory to you as to the accuracy
of the representations and warranties of the Company herein at and as of such
Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of Delivery, as
to the matters set forth in subsection (g) of this Section 7 and as
to such other matters as you may reasonably request; and

 

(m)                          The Company shall have
obtained and delivered to the Purchasers executed copies of agreements from
each executive officer or director of the Company, substantially to the effect
set forth in Section 5(d) hereof in form and substance satisfactory to
you.

 

8.                                       (a)  The Company will indemnify and hold harmless
each Purchaser against any losses, claims, damages or liabilities, joint or
several, to which such Purchaser may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Offering Circular or the Offering Circular, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary to make the statements therein not
misleading, and will reimburse each Purchaser for any legal or other expenses
reasonably incurred by such Purchaser in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Offering Circular or the Offering Circular or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Purchaser through Goldman, Sachs
& Co. expressly for use therein.

 

(b)                            Each Purchaser will
indemnify and hold harmless the Company against any losses, claims, damages or
liabilities to which the Company may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are

 

17

 

based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Offering Circular or the Offering
Circular, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary Offering
Circular or the Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by such Purchaser through Goldman, Sachs & Co. expressly for use
therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.

 

(c)                             Promptly after receipt by
an indemnified party under subsection (a) or (b) above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such subsection,
notify the indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than under such
subsection.  In case any such action
shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party under such
subsection for any legal expenses of other counsel or any other expenses,
in each case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation.  No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or compromise
of, or consent to the entry of any judgment with respect to, any pending or
threatened action or claim in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified party is an actual or
potential party to such action or claim) unless such settlement, compromise or
judgment (i) includes an unconditional release of the indemnified party from
all liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.

 

(d)                            If the indemnification
provided for in this Section 8 is unavailable to or insufficient to hold
harmless an indemnified party under subsection (a) or (b) above in respect
of any losses, claims, damages or liabilities (or actions in respect thereof)
referred to therein, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Purchasers on the other from the offering of
the Securities.  If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under subsection (c) above, then each indemnifying party shall contribute
to such amount paid or payable by such indemnified party in such proportion as
is appropriate to reflect not only such relative benefits but also the relative
fault of the Company on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. 
The relative benefits received by the Company on the one hand and the

 

18

 

Purchasers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total discounts received by the Purchasers.  The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand or
the Purchasers on the other and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or
omission.  The Company and the Purchasers
agree that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the
Purchasers were treated as one entity for such purpose) or by any other method
of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). 
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.  Notwithstanding the provisions of this subsection (d), no Purchaser
shall be required to contribute any amount in excess of the amount by which the
total price at which the Securities purchased by it and distributed to
investors were offered to investors exceeds the amount of any damages which
such Purchaser has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Purchasers’
obligations in this subsection (d) to contribute are several in proportion
to their respective underwriting obligations and not joint.

 

(e)                             The obligations of the
Company under this Section 8 shall be in addition to any liability which
the Company may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Purchaser within the
meaning of the Act; and the obligations of the Purchasers under this
Section 8 shall be in addition to any liability which the respective
Purchasers may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Company within the meaning of the Act.

 

9.                                       (a)  If any Purchaser shall default in its
obligation to purchase the Securities which it has agreed to purchase
hereunder, you may in your discretion arrange for you or another party or other
parties to purchase such Securities on the terms contained herein.  If within thirty-six hours after such
default by any Purchaser you do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to you to purchase such Securities on such terms.  In the event that, within the respective
prescribed periods, you notify the Company that you have so arranged for the
purchase of such Securities, or the Company notifies you that it has so
arranged for the purchase of such Securities, you or the Company shall have the
right to postpone the Time of Delivery for such Securities for a period of not
more than  seven days, in order to
effect whatever changes may thereby be made necessary in the Offering Circular,
or in any other documents or arrangements, and the Company agrees to prepare
promptly any amendments to the Offering Circular which in your opinion may
thereby be made necessary.  The term
“Purchaser” as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been
a party to this Agreement with respect to such Securities.

 

(b)                            If, after giving effect to
any arrangements for the purchase of the Securities of a defaulting Purchaser
or Purchasers by you and the Company as provided in subsection (a) above,
the aggregate principal amount of such Securities which remains unpurchased
does not exceed

 

19

 

one-eleventh of the aggregate principal amount of all the Securities,
then the Company shall have the right to require each non-defaulting Purchaser
to purchase the principal amount of Securities which such Purchaser agreed to purchase
hereunder and, in addition, to require each non-defaulting Purchaser to
purchase its pro rata share (based on the principal amount of Securities which
such Purchaser agreed to purchase hereunder) of the Securities of such
defaulting Purchaser or Purchasers for which such arrangements have not been
made; but nothing herein shall relieve a defaulting Purchaser from liability
for its default.

 

(c)                             If, after giving effect to
any arrangements for the purchase of the Securities of a defaulting Purchaser or
Purchasers by you and the Company as provided in subsection (a) above, the
aggregate principal amount of Securities which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of all the Securities, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Purchasers to purchase Securities of a defaulting
Purchaser or Purchasers, then this Agreement shall thereupon terminate, without
liability on the part of any non-defaulting Purchaser or the Company, except
for the expenses to be borne by the Company and the Purchasers as provided in
Section 6 hereof and the indemnity and contribution agreements in
Section 8 hereof; but nothing herein shall relieve a defaulting Purchaser
from liability for its default.

 

10.                                 The respective
indemnities, agreements, representations, warranties and other statements of
the Company and the several Purchasers, as set forth in this Agreement or made
by or on behalf of them, respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation (or any statement as
to the results thereof) made by or on behalf of any Purchaser or any
controlling person of any Purchaser, or the Company, or any officer or director
or controlling person of the Company, and shall survive delivery of and payment
for the Securities.

 

11.                                 If this Agreement
shall be terminated pursuant to Section 9 hereof, the Company shall not
then be under any liability to any Purchaser except as provided in Sections 6
and 8 hereof; but, if for any other reason, the Securities are not delivered by
or on behalf of the Company as provided herein, the Company will reimburse the
Purchasers through you for all out-of-pocket expenses, including reasonable
fees and disbursements of counsel, reasonably incurred by the Purchasers in
making preparations for the purchase, sale and delivery of the Securities, but
the Company shall then be under no further liability to any Purchaser except as
provided in Sections 6 and 8 hereof.

 

12.                                 In all dealings
hereunder, you shall act on behalf of each of the Purchasers, and the parties
hereto shall be entitled to act and rely upon any statement, request, notice or
agreement on behalf of any Purchaser made or given by you jointly or by Goldman,
Sachs & Co. on behalf of you as the representatives.

 

All
statements, requests, notices and agreements hereunder shall be in writing, and
if to the Purchasers shall be delivered or sent by mail, telex or facsimile
transmission to you as the representatives in care of Goldman, Sachs & Co.,
85 Broad Street, New York, New York 10004, Attention: Registration Department;
and if to the Company shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Company set forth in the Offering Circular,
Attention: Secretary; provided, however, that any notice to
a Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Purchaser at its address set
forth in its Purchasers’ Questionnaire, or telex constituting such
Questionnaire, which address will be

 

20

 

supplied to the Company by you upon request.  Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.

 

13.                                 This Agreement shall
be binding upon, and inure solely to the benefit of, the Purchasers, the
Company and, to the extent provided in Sections 8 and 10 hereof, the officers
and directors of the Company and each person who controls the Company or any
Purchaser, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities from any
Purchaser shall be deemed a successor or assign by reason merely of such
purchase.

 

14.                                 Time shall be of the
essence of this Agreement.

 

15.                                                                               This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.

 

16.                                 This
Agreement may be executed by any one or more of the parties hereto in any
number of counterparts, each of which shall be deemed to be an original, but
all such respective counterparts shall together constitute one and the same
instrument.

 

17.                                 The
Company is authorized, subject to applicable law, to disclose any and all
aspects of this potential transaction that are necessary to support any U.S.
federal income tax benefits expected to be claimed with respect to such
transaction, and all materials of any kind (including tax opinions and other
tax analyses) related to those benefits, without the Purchasers imposing any
limitation of any kind.

 

21

 

If the
foregoing is in accordance with your understanding, please sign and return to
us six (6) counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Purchasers, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Purchasers and the Company.  It is understood that your acceptance of
this letter on behalf of each of the Purchasers is pursuant to the authority
set forth in a form of Agreement among Purchasers, the form of which shall be
submitted to the Company for examination upon request, but without warranty on your
part as to the authority of the signers thereof.

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  Medarex, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted as of
  the date hereof:

  	
   

  
	
   

  	
   

  
	
  Goldman, Sachs & Co.

  	
   

  
	
  J.P. Morgan
  Securities Inc.

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  (Goldman, Sachs
  & Co.)

  	
   

  	
   

  

 

22

 

	
  SCHEDULE I

   

   

  

 

	
   

  	
   

  	
  Principal
  Amount of Firm

  Securities to be

  Purchased

  	
   

  	
  Principal
  Amount of

  Optional Securities to be

  Purchased if Maximum

  Option Exercised

  	
   

  
	
  Purchaser

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Goldman, Sachs & Co.

  	
   

  	
  $

  	
  105,000,000

  	
   

  	
  $

  	
  50,000,000

  	
   

  
	
  J.P. Morgan Securities Inc. .

  	
   

  	
  45,000,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  150,000,000

  	
   

  	
  $

  	
  50,000,000

  	
   

  

 

23

 

ANNEX I

 

Pursuant
to Section 7(f) of the Purchase Agreement, the accountants shall furnish
letters to the Purchasers to the effect that:

 

(i)                         They
are independent certified public accountants with respect to the Company and
its subsidiaries within the meaning of the Securities Exchange Act of 1934 (the
“Exchange Act”) and the applicable published rules and regulations thereunder;

 

(ii)                      In
their opinion, the consolidated financial statements and financial statement
schedules audited by them and included in the Offering Circular comply as to
form in all material respects with the applicable requirements of the Exchange
Act and the related published rules and regulations;

 

(iii)                   The unaudited selected financial
information with respect to the consolidated results of operations and
financial position of the Company for the five most recent fiscal years
included in the Offering Circular agrees with the corresponding amounts (after
restatements where applicable) in the audited consolidated financial statements
for such five fiscal years;

 

(iv)                  On
the basis of limited procedures not constituting an audit in accordance with
generally accepted auditing standards, consisting of a reading of the unaudited
financial statements and other information referred to below, a reading of the
latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements included
in the Offering Circular, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:

 

(A)      the unaudited
consolidated statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Offering Circular are not in
conformity with generally accepted accounting principles applied on the basis
substantially consistent with the basis for the unaudited condensed
consolidated statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Offering Circular;

 

(B)        any other
unaudited income statement data and balance sheet items included in the
Offering Circular do not agree with the corresponding items in the unaudited
consolidated financial statements from which such data and items were derived,
and any such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included in the Offering Circular;

 

(C)        the
unaudited financial statements which were not included in the Offering Circular
but from which were derived any unaudited condensed financial statements
referred to in clause (A) and any unaudited income statement data and balance
sheet items included in the Offering Circular and referred to in clause (B)
were not

 

 

determined on a basis substantially consistent with
the basis for the audited consolidated financial statements included in the
Offering Circular;

 

(D)       any unaudited
pro forma consolidated condensed financial statements included in the Offering
Circular do not comply as to form in all material respects with the applicable
accounting requirements or the pro forma adjustments have not been properly
applied to the historical amounts in the compilation of those statements;

 

(E)         as of a
specified date not more than five days prior to the date of such letter, there
have been any changes in the consolidated capital stock (other than issuances
of capital stock upon exercise of options and stock appreciation rights, upon
earn-outs of performance shares and upon conversions of convertible securities,
in each case which were outstanding on the date of the latest financial statements
included in the Offering Circular or any increase in the consolidated long-term
debt of the Company and its subsidiaries, or any decreases in consolidated net
current assets or shareholders’ equity or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the latest
balance sheet included in the Offering Circular except in each case for
changes, increases or decreases which the Offering Circular discloses have
occurred or may occur or which are described in such letter; and

 

(F)         for the
period from the date of the latest financial statements included in the
Offering Circular to the specified date referred to in clause (E) there were
any decreases in consolidated net revenues or operating profit or the total or
per share amounts of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length specified by
the Representatives, except in each case for decreases or increases which the
Offering Circular discloses have occurred or may occur or which are described
in such letter; and

 

(v)                     In
addition to the examination referred to in their report(s) included in the
Offering Circular and the limited procedures, inspection of minute books,
inquiries and other procedures referred to in paragraphs (iii) and (iv) above,
they have carried out certain specified procedures, not constituting an audit
in accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives, which are derived from the general accounting records of the
Company and its subsidiaries, which appear in the Offering Circular, and have
compared certain of such amounts, percentages and financial information with
the accounting records of the Company and its subsidiaries and have found them
to be in agreement.

 

I-2

 

ANNEX
II

 

Cross
License Agreement, effective as of March 26, 1997, among Cell Genesys,
Inc., Abgenix, Inc., Xenotech, L.P., Japan Tobacco, Inc. and GenPharm International,
Inc.

 

Evaluation
and Commercialization Agreement dated as of February 25, 1999 among
Medarex, Inc., GenPharm International, Inc. and GenMab (as amended).

 

Collaboration
Agreement dated as of June 1, 2000 among Medarex, Inc. and Biosite Diagnostics,
Inc. (as amended).

 

Collaboration
and License Agreement, dated September 4, 2002, among Medarex, Genpharm
International, Inc. and Kirin Brewery Co., Ltd.

 

II-1

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