-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SmtdptJRkJSba7QygCSDva7wDU7IuScyw79MFF1p/hkeJuPsSFPD50Y1oXq1G/2J feC5M7wdsu17qAw6dtF7sQ== 0000899140-01-500073.txt : 20010524 0000899140-01-500073.hdr.sgml : 20010524 ACCESSION NUMBER: 0000899140-01-500073 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20010523 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MEDICINES CO/ MA CENTRAL INDEX KEY: 0001113481 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 043324394 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-60201 FILM NUMBER: 1646599 BUSINESS ADDRESS: STREET 1: ONE CAMBRIDGE CTR CITY: CAMBRIDGE STATE: MA ZIP: 02142 BUSINESS PHONE: 6172259099 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS VENTURES LP CENTRAL INDEX KEY: 0000942263 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 133784037 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: E M WARBURG PINCUS & CO INC STREET 2: 466 LEXINGTON AVE 10TH FL CITY: NEW YORK STATE: NY ZIP: 10017-3147 BUSINESS PHONE: 2128780600 MAIL ADDRESS: STREET 1: E M WARBURG PINCUS & CO INC STREET 2: 466 LEXINGTON AVE 10TH FL CITY: NEW YORK STATE: NY ZIP: 10017-3147 SC 13D 1 wpv899386b.txt INITIAL FILING ON SCHEDULE 13D ------------------------- UNITED STATES OMB APPROVAL SECURITIES AND EXCHANGE COMMISSION OMB Number: 3235-0145 Washington, D.C. 20549 Expires: October 31, 2002 Estimated average burden SCHEDULE 13D hours per response...14.9 ------------------------- Under the Securities Exchange Act of 1934* THE MEDICINES COMPANY, INC. - ------------------------------------------------------------------------------- (Name of Issuer) Common Stock, $0.001 Par Value - ------------------------------------------------------------------------------- (Title of Class of Securities) 584688 10 5 - ------------------------------------------------------------------------------- (CUSIP Number) Scott A. Arenare, Esq. Vice President and General Counsel Warburg Pincus LLC 466 Lexington Avenue New York, New York 10017 (212) 878-0600 - ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) Copies to: Peter H. Jakes, Esq. Willkie Farr & Gallagher 787 Seventh Avenue New York, NY 10019-6099 (212) 728-8000 May 16, 2001 - ------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box: [ ] NOTE: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). page 1 of 19 pages SCHEDULE 13D - --------------------------- ------------------------- CUSIP No. 584688 10 5 Page 2 of 19 Pages - --------------------------- ------------------------- - ----------- ------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Warburg, Pincus Ventures, L.P. I.R.S. #13-3784037 - ----------- ------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) [ ] (b) [X] - ----------- ------------------------------------------------------------------- 3 SEC USE ONLY - ----------- ------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC (See Item 3 for description of consideration) - ----------- ------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT [ ] TO ITEMS 2(d) or 2(e) - ----------- ------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - --------------------- --------- ----------------------------------------------- 7 SOLE VOTING POWER 0 NUMBER OF --------- ----------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY EACH 10,655,256 REPORTING PERSON WITH --------- ----------------------------------------------- 9 SOLE DISPOSITIVE POWER 0 --------- ----------------------------------------------- 10 SHARED DISPOSITIVE POWER 10,655,256 - ----------- ------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,655,256 - ----------- ------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - ----------- ------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 29.9% - ----------- ------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) PN - ----------- ------------------------------------------------------------------- SCHEDULE 13D - ---------------------------- --------------------------- CUSIP No. 584688 10 5 Page 3 of 19 Pages - ---------------------------- --------------------------- - ---------- -------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Warburg, Pincus & Co. I.R.S. #13-6358475 - ----------- ------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (See Instructions) (b) [X] - ----------- ------------------------------------------------------------------- 3 SEC USE ONLY - ----------- ------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC (See Item 3 for description of consideration) - ----------- ------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) [ ] - ----------- ------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - --------------------- --------- ----------------------------------------------- 7 SOLE VOTING POWER 0 --------- ----------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 10,655,256 OWNED BY EACH REPORTING --------- ----------------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 0 --------- ----------------------------------------------- 10 SHARED DISPOSITIVE POWER 10,655,256 - ----------- ------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,655,256 - ----------- ------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - ----------- ------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 29.9% - ----------- ------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) PN - ----------- ------------------------------------------------------------------- SCHEDULE 13D - ---------------------------- --------------------------- CUSIP No. 584688 10 5 Page 4 of 19 Pages - ---------------------------- --------------------------- - ---------- -------------------------------------------------------------------- 1 NAMES OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (entities only) Warburg Pincus LLC (formerly E.M. Warburg, Pincus & Co., LLC) I.R.S. #13-3536050 - ---------- -------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (See Instructions) (b) [X] - ---------- -------------------------------------------------------------------- 3 SEC USE ONLY - ---------- -------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC (See Item 3 for description of consideration) - ---------- -------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT [ ] TO ITEMS 2(d) or 2(e) - ---------- -------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - --------------------- --------- ----------------------------------------------- 7 SOLE VOTING POWER 0 --------- ----------------------------------------------- NUMBER OF 8 SHARED VOTING POWER SHARES BENEFICIALLY 10,655,256 OWNED BY EACH REPORTING --------- ----------------------------------------------- PERSON WITH 9 SOLE DISPOSITIVE POWER 0 --------- ----------------------------------------------- 10 SHARED DISPOSITIVE POWER 10,655,256 - ---------- -------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 10,655,256 - ---------- -------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) [ ] - ---------- -------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 29.9% - ---------- -------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - ---------- -------------------------------------------------------------------- This Schedule 13D is being filed on behalf of Warburg, Pincus Ventures, L.P., a Delaware limited partnership ("WPV"), Warburg, Pincus & Co., a New York general partnership ("WP") and Warburg Pincus LLC (formerly E.M. Warburg, Pincus & Co., LLC), a New York limited liability company ("WP LLC" and, together with WPV and WP, the "Reporting Entities"). This Schedule 13D relates to the Common Stock, par value $0.001, of The Medicines Company, Inc., a corporation organized under Delaware law (the "Company"). Unless the context otherwise requires, references herein to the "Common Stock" are to the Common Stock of the Company, par value $0.001 per share. Item 1. Security and Issuer. This statement on Schedule 13D relates to the Common Stock and is being filed within 10 days after a direct acquisition of the Common Stock pursuant to Rule 13d-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). The address of the principal executive offices of the Company is One Cambridge Center, Cambridge, Massachusetts 02142. Item 2. Identity and Background. (a) This statement is filed by the Reporting Entities. The sole general partner of WPV is WP. WP LLC manages WPV. Lionel I. Pincus is the managing partner of WP and the managing member of WP LLC and may be deemed to control WP, WPV and WP LLC. Lionel I. Pincus disclaims any beneficial ownership of the Common Stock that is reported herein as beneficially owned by the Reporting Entities. The general partners of WP and the members of WP LLC are described in Schedule I hereto. Page 5 of 19 Pages (b) The address of the principal business and principal office of WPV, WP, WP LLC and those persons listed on Schedule I hereto is 466 Lexington Avenue, New York, New York 10017. (c) The principal business of WP is acting as general partner of Warburg, Pincus International Partners, L.P., Warburg, Pincus Equity Partners, L.P., Warburg, Pincus Ventures International, L.P., WPV and Warburg, Pincus Investors, L.P. The principal business of WP LLC is acting as manager of Warburg, Pincus International Partners, L.P., Warburg, Pincus Equity Partners, L.P., Warburg, Pincus Ventures International, L.P., WPV and Warburg, Pincus Investors, L.P. The principal business of WPV is that of a partnership engaged in making venture capital and related investments. (d) None of the Reporting Entities, nor, to the best of their knowledge, any of the directors, executive officers, control persons, general partners or members referred to in paragraph (a) above has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Entities nor, to the best of their knowledge, any of the directors, executive officers, control persons, general partners or members referred to in paragraph (a) above has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Page 6 of 19 Pages (f) Except as otherwise indicated on Schedule I hereto, each of the individuals referred to in paragraph (a) above is a United States citizen. Item 3. Source and Amount of Funds or Other Consideration. Pursuant to a Stock Purchase Agreement, made as of May 11, 2001 between the Company and WPV (such agreement, the "Purchase Agreement"), WPV purchased 1,050,000 shares of the Common Stock at a price of $11.00 per share (the "Shares") with the purchase price paid in cash at the closing, which occurred on May 16, 2001 (such transaction, the "Transaction"). Pursuant to stock purchase agreements made as of May 11, 2001, certain other investors purchased an aggregate of 2,950,000 shares of the Common Stock at a price of $11.00 per share on substantially the same terms (such purchases, together with the Transaction, the "Share Purchases"). Prior to the Company's initial public offering of the Common Stock in August 2000, WPV held four series of shares of the Company's Convertible Preferred Stock that were converted automatically into 8,329,446 shares of the Common Stock on the closing of the Company's initial public offering. The 10,655,256 shares of Common Stock beneficially owned by WPV as of May 16, 2001 include 9,379,446 shares held directly in the form of Common Stock and 1,275,810 shares of Common Stock held indirectly in the form of immediately exercisable warrants to acquire shares of Common Stock. The shares of Common Stock, Convertible Preferred Stock and warrants to acquire Common Stock were acquired in various transactions involving private equity investments, including investments made in connection with the formation of the Company. Page 7 of 19 Pages All of the funds required to acquire the shares of Common Stock held by WPV were obtained from the working capital of WPV. Item 4. Purpose of Transaction. The acquisition by WPV of the Shares was effected because of the Reporting Entities' belief that the Transaction and the Common Stock represent an attractive investment. Prior acquisitions of the Common Stock of the Company were made on the basis of similar beliefs. The Reporting Entities may from time to time acquire additional shares of Common Stock or engage in discussions with the Company concerning further acquisitions of shares of Common Stock, warrants to acquire shares of Common Stock, or further investments by them in the Company. The Reporting Entities intend to review their investment in the Company on a continuing basis and, depending upon the price and availability of shares of Common Stock, subsequent developments affecting the Company, the Company's business and prospects, other investment and business opportunities available to the Reporting Entities, general stock market and economic conditions, tax considerations and other factors considered relevant, may decide at any time to increase, or to decrease, the size of their investment in the Company. Except as set forth above in this statement, none of the Reporting Entities nor, to the best of their knowledge, any person listed in Schedule I hereto, has any plans or proposals that relate to or would result in: (a) the acquisition by any person of additional securities of the Company, or the disposition of securities of the Company; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Company or any of its subsidiaries; (d) any change in the present Page 8 of 19 Pages Board of Directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the Company; (f) any other material change in the Company's business or corporate structure; (g) changes in the Company's charter, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to any of those enumerated above. Item 5. Interest in Securities of the Issuer. (a) As of May 16, 2001 WPV beneficially owned 10,655,256 shares of the Common Stock. By reason of their respective relationships with WPV, each of the Reporting Entities may be deemed under Rule 13d-3 of the Exchange Act to own beneficially all of the shares of the Common Stock that WPV beneficially owns. The 10,655,256 Shares of the Common Stock represented approximately 29.9% of the outstanding Common Stock, based on a total of 35,667,758 shares of Common Stock outstanding comprised of: (i) the 34,391,948 shares of Common Stock outstanding as of May 16, 2001 (giving effect to the issuance of 4,000,000 new shares of Common Stock in connection with the Share Purchases), as represented by the Company in connection with the Transaction; and (ii) 1,275,810 additional shares of Common Stock issuable on the exercise of the immediately exercisable warrants held by WPV. Page 9 of 19 Pages (b) WPV, as direct holder of the Common Stock, and WP and WP LLC by virtue of their control position with respect to WPV, may each be deemed to have the shared power to vote or to direct the vote and to dispose or to direct the disposition with respect to the 10,655,256 shares of Common Stock beneficially owned by WPV. (c) Other than the acquisition of the Shares, during the last sixty days no transactions involving the Common Stock were effected by the Reporting Entities or by any of the persons set forth on Schedules I and II hereto. (d) Except as set forth in this Item 5, no person other than each respective record owner referred to herein of securities is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities. (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. By virtue of the relationships among the Reporting Entities as described in Item 2, the Reporting Entities may be deemed to be a "group" under the Federal securities laws. Pursuant to Rule 13d-1(k) promulgated under the Exchange Act, the Reporting Entities have entered into an agreement, attached hereto as Exhibit 1, with respect to the joint filing of this statement and any amendment or amendments hereto. The Purchase Agreement was entered into as of May 11, 2001 and is described herein in Item 3. The summary of the Purchase Agreement in this Schedule 13D is Page 10 of 19 Pages qualified in its entirety by reference to the Purchase Agreement, which is attached as Exhibit 2 hereto. Pursuant to the terms of the Purchase Agreement, the Company has agreed, among other things, to file a registration statement on Form S-1 with the Commission relating to the resale of the shares of the Common Stock purchased under the Purchase Agreement, and to use its reasonable best efforts to cause such registration statement to become effective within 30 days after filing. Pursuant to the Purchase Agreement, the Company has also agreed to use its reasonable best efforts to prepare and file with the Commission, within 10 days after the Company first becomes eligible to file a registration statement on Form S-3, a registration statement on Form S-3 to enable the resale of the shares of Common Stock purchased under the Purchase Agreement by the purchasers of such shares from time to time on the Nasdaq National Market or in privately negotiated transactions, and to use its reasonable best efforts to cause such registration statement to become effective as soon as practicable thereafter. Under the Purchase Agreement, WPV and the other purchasers of the Company's Common Stock in connection with the Share Purchases have agreed to be bound by certain restrictions on the transfer of shares of the Common Stock and their right to acquire the shares of the Common Stock. Pursuant to the terms of an Amended and Restated Registration Rights Agreement (the "Registration Rights Agreement"), made and entered into as of August 12, 1998, among the Company, WPV and certain other individuals and entities listed on Schedules I and II thereto, as amended by: (i) an Amendment No. 2 to the Registration Rights Agreement, dated as of October 19, 1999, by and among the Company and certain Page 11 of 19 Pages investors described therein; (ii) an Amendment No. 3 to the Registration Rights Agreement, dated as of March 2, 2000, by and among the Company and certain investors described therein; and (iii) an Amendment No. 4 to the Registration Rights Agreement, dated as of May 17, 2000, by and among the Company and certain investors described therein (Amendments (i) through (iii) above, collectively, the "Registration Rights Agreement Amendments"), the Company has agreed, among other things, to provide WPV and certain other shareholders with demand and piggyback registration rights with respect to certain shares of the Common Stock. Pursuant to the Registration Rights Agreement, WPV and the other shareholders party thereto have agreed to be bound by certain restrictions on the transfer of shares of the Common Stock and other securities of the Company. The foregoing summary of the Registration Rights Agreement is qualified in its entirety by reference to the Registration Rights Agreement and the Registration Rights Agreement Amendments, which are incorporated herein by reference to Exhibit 10.3 to the Company's registration statement on Form S-1, filed with the Commission on May 19, 2000. Pursuant to the terms of a Third Amended and Restated Stockholders' Agreement, dated as of August 12, 1998, by and among the Company and certain individuals and entities described on Schedule I thereto (the "Stockholders' Agreement"), a group of eight persons, including three representatives of WPV, was elected to the Company's Board of Directors. The Stockholders' Agreement terminated by its terms on the completion of the Company's initial public offering, with the exception of a provision that continues to allow any investor party to the Stockholders' Agreement, excluding Biotech Growth S.A., that owns: (a) twenty percent of the outstanding Common Stock to Page 12 of 19 Pages nominate two individuals to serve as directors; and (b) ten percent of the outstanding Common Stock to nominate one individual to serve as a director. Pursuant to these provisions, WPV is currently entitled to nominate two individuals to serve as directors. Nicholas Lowcock and Stewart Hen currently serve on the Company's Board of Directors as representatives of WPV. The foregoing summary of the Stockholders' Agreement is qualified in its entirety by reference to the Stockholders' Agreement, which is incorporated herein by reference to Exhibit 10.4 to the Company's registration statement on Form S-1, filed with the Commission on May 19, 2000. Except as described above, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 or between such persons and any other person with respect to any securities of the Company. Item 7. Material to be Filed as Exhibits. 1. Joint Filing Agreement, dated as of May 21, 2001, by and among the Reporting Entities. 2. Stock Purchase Agreement, made as of May 11, 2001, by and among WPV and the Company. 3. Amended and Restated Registration Rights Agreement, made and entered into as of August 12, 1998, by and among the Company, WPV and certain other individuals and entities listed on Schedules I and II thereto (incorporated by reference to Exhibit 10.3 to the Company's registration statement on Form S-1, filed with the Commission on May 19, 2000). Page 13 of 19 Pages 4. Third Amended and Restated Stockholders' Agreement, dated as of August 12, 1998, by and among the Company, WPV and certain other individuals and entities listed on Schedule I thereto (incorporated by reference to Exhibit 10.4 to the Company's registration statement on Form S-1, filed with the Commission on May 19, 2000). Page 14 of 19 Pages SIGNATURES After reasonable inquiry and to the best of our knowledge and belief, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: May 23, 2001 WARBURG, PINCUS VENTURES, L.P. By: Warburg, Pincus & Co., General Partner By: /s/ Scott Arenare ------------------------------------ Name: Scott Arenare Title: Attorney-in-Fact Dated: May 23, 2001 WARBURG, PINCUS & CO. By: /s/ Scott Arenare ------------------------------------ Name: Scott Arenare Title: Attorney-in-Fact Dated: May 23, 2001 WARBURG PINCUS LLC By: /s/ Scott Arenare ------------------------------------ Name: Scott Arenare Title: Attorney-in-Fact Page 15 of 19 Pages SCHEDULE I ---------- Set forth below is the name, position and present principal occupation of each of the general partners of Warburg, Pincus & Co. ("WP") and members of Warburg Pincus LLC ("WP LLC"). The sole general partner of Warburg, Pincus Ventures, L.P. ("WPV") is WP. WPV, WP, and WP LLC are hereinafter collectively referred to as the "Reporting Entities". Except as otherwise indicated, the business address of each of such persons is 466 Lexington Avenue, New York, New York 10017, and each of such persons is a citizen of the United States. GENERAL PARTNERS OF WP ---------------------- - ------------------------------------------------------------------------------- PRESENT PRINCIPAL OCCUPATION IN ADDITION TO POSITION WITH WP, AND POSITIONS NAME WITH THE REPORTING ENTITIES - ---------------------- -------------------------------------------------------- Joel Ackerman Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Gregory Back Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- David Barr Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Harold Brown Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Sean D. Carney Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Timothy J. Curt Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- W. Bowman Cutter Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Cary J. Davis Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Stephen Distler Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Stewart K. P. Gross Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Patrick T. Hackett Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Jeffrey A. Harris Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- William H. Janeway Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Charles R. Kaye Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Henry Kressel Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Joseph P. Landy Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Sidney Lapidus Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Kewsong Lee Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Jonathan S. Leff Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Reuben S. Leibowitz Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- David E. Libowitz Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Nancy Martin Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Edward J. McKinley Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Rodman W. Moorhead III Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- James Neary Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Howard H. Newman Partner of WP; Member and Vice Chairman of WP LLC - ---------------------- -------------------------------------------------------- Gary D. Nusbaum Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Dalip Pathak Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Lionel I. Pincus Managing Partner of WP; Managing Member, Chairman of the Board and Chief Executive Officer of WP LLC - ---------------------- -------------------------------------------------------- John D. Santoleri Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Steven G. Schneider Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Barry Taylor Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- John L. Vogelstein Partner of WP; Member, and President of WP LLC - ---------------------- -------------------------------------------------------- Elizabeth H.Weatherman Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- David Wenstrup Partner of WP; Member and Managing Director of WP LLC - ---------------------- -------------------------------------------------------- Pincus & Co.* - ---------------------- -------------------------------------------------------- NL & Co.** - ---------------------- -------------------------------------------------------- - ------------------ * New York limited partnership; primary activity is ownership interest in WP and WP LLC. ** New York limited partnership; primary activity is ownership interest in WP. Page 16 of 19 Pages MEMBERS OF WP LLC ----------------- - ------------------------------------------------------------------------------- PRESENT PRINCIPAL OCCUPATION IN ADDITION TO POSITION WITH WP LLC, AND POSITIONS NAME WITH THE REPORTING ENTITIES - ------------------------ ----------------------------------------------------- Joel Ackerman Member and Managing Director of WP LLC; Partner of WP - ------------------------ ----------------------------------------------------- Gregory Back Member and Managing Director of WP LLC; Partner of WP - ------------------------ ----------------------------------------------------- David Barr Member and Managing Director of WP LLC; Partner of WP - ------------------------ ----------------------------------------------------- Frank M. Brochin (1) Member and Managing Director of WP LLC - ------------------------ ----------------------------------------------------- Harold Brown Member and Managing Director of WP LLC; Partner of WP - ------------------------ ----------------------------------------------------- Sean D. Carney Member and Managing Director of WP LLC; Partner of WP - ------------------------ ----------------------------------------------------- Timothy J. Curt Member and Managing Director of WP LLC; Partner of WP - ------------------------ ----------------------------------------------------- W. Bowman Cutter Member and Managing Director of WP LLC; Partner of WP - ------------------------ ----------------------------------------------------- Cary J. Davis Member and Managing Director of WP LLC; Partner of WP - ------------------------ ----------------------------------------------------- Stephen Distler Member and Managing Director of WP LLC; Partner of WP - ------------------------ ----------------------------------------------------- Tetsuya Fukagawa (2) Member and Managing Director of WP LLC - ------------------------ ----------------------------------------------------- Makoto Fukuhara (2) Member and Managing Director of WP LLC - ------------------------ ------------------------------------------------------ Stewart K. P. Gross Member and Managing Director of WP LLC; Partner of WP - ------------------------ ----------------------------------------------------- Alf Grunwald (3) Member and Managing Director of WP LLC - ------------------------ ------------------------------------------------------ Patrick T. Hackett Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Jeffrey A. Harris Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Sung-Jin Hwang (4) Member and Managing Director of WP LLC - ------------------------ ------------------------------------------------------ Roberto Italia (5) Member and Managing Director of WP LLC - ------------------------ ------------------------------------------------------ William H. Janeway Member and Managing Director of WP LLC; Partner of WP - ------------------------ ----------------------------------------------------- Charles R. Kaye Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Rajesh Khanna (6) Member and Managing Director of WP LLC - ------------------------ ------------------------------------------------------ Henry Kressel Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Rajiv B. Lall (6) Member and Managing Director of WP LLC - ------------------------ ------------------------------------------------------ Joseph P. Landy Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Sidney Lapidus Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Kewsong Lee Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Jonathan S. Leff Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Reuben S. Leibowitz Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ David E. Libowitz Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Nicholas J. Lowcock (7) Member and Managing Director of WP LLC - ------------------------ ------------------------------------------------------ John W. MacIntosh (8) Member and Managing Director of WP LLC - ------------------------ ------------------------------------------------------ Nancy Martin Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Edward J. McKinley Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Rodman W. Moorhead III Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ James Neary Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Howard H. Newman Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Gary D. Nusbaum Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Dalip Pathak Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Lionel I. Pincus Managing Member, Chairman of the Board and Chief Executive Officer of WP LLC; Managing Partner of WP - ------------------------ ------------------------------------------------------ Pulak Chandan Prasad (6) Member and Managing Director of WP LLC - ------------------------ ------------------------------------------------------ John D. Santoleri Member and Managing Director of WP LLC; Partner of WP - ------------------------ ------------------------------------------------------ Page 17 of 19 Pages MEMBERS OF WP LLC (continued) ----------------------------- - ------------------------- ----------------------------------------------------- PRESENT PRINCIPAL OCCUPATION IN ADDITION TO POSITION WITH WP LLC, AND POSITIONS NAME WITH THE REPORTING ENTITIES - ------------------------- ----------------------------------------------------- Steven G. Schneider Member and Managing Director of WP LLC; Partner of WP - ------------------------- ----------------------------------------------------- Melchior Stahl (3) Member and Managing Director of WP LLC - ------------------------- ----------------------------------------------------- Chang Q. Sun (9) Member and Managing Director of WP LLC - ------------------------- ----------------------------------------------------- Barry Taylor Member and Managing Director of WP LLC, Partner of WP - ------------------------- ----------------------------------------------------- John L. Vogelstein Member and President of WP LLC; Partner of WP - ------------------------- ----------------------------------------------------- Elizabeth H. Weatherman Member and Managing Director of WP LLC; Partner of WP - ------------------------- ----------------------------------------------------- David Wenstrup Member and Managing Director of WP LLC; Partner of WP - ------------------------- ----------------------------------------------------- Jeremy S. Young (7) Member and Managing Director of WP LLC - ------------------------- ----------------------------------------------------- Pincus & Co.* - ------------------------- ----------------------------------------------------- (1) Citizen of France (2) Citizen of Japan (3) Citizen of Germany (4) Citizen of Korea (5) Citizen of Italy (6) Citizen of India (7) Citizen of United Kingdom (8) Citizen of Canada (9) Citizen of China * New York limited partnership; primary activity is ownership interest in WP and WP LLC Page 18 of 19 Pages Exhibit Index Exhibit 1 Joint Filing Agreement, dated as of May 21, 2001, by and among Warburg, Pincus Ventures, L.P., Warburg, Pincus & Co. and Warburg Pincus LLC. Exhibit 2 Stock Purchase Agreement, made as of May 11, 2001, by and among Warburg, Pincus Ventures, L.P. and The Medicines Company, Inc. (the "Company"). Exhibit 3 Amended and Restated Registration Rights Agreement, made and entered into as of August 12, 1998, by and among the Company, Warburg, Pincus Ventures, L.P., and certain other individuals and entities listed on Schedules I and II thereto (incorporated by reference to Exhibit 10.3 to the Company's registration statement on Form S-1 filed with the Securities and Exchange Commission (the "Commission") on May 19, 2000). Exhibit 4 Third Amended and Restated Stockholders' Agreement, dated as of August 12, 1998, by and among the Company, Warburg, Pincus Ventures, L.P., and certain other individuals and entities listed on Schedule I thereto (incorporated by reference to Exhibit 10.4 to the Company's registration statement on Form S-1 filed with the Commission on May 19, 2000). Page 19 of 19 Pages EX-99.1 2 wpv899386c.txt JOINT FILING AGREEMENT Exhibit 1 --------- Joint Filing Agreement Joint Filing Agreement The undersigned hereby agree that the statement on Schedule 13D filed by the undersigned with respect to the Common Stock, $0.001 par value is, and any amendment thereto signed by each of the undersigned shall be, filed on behalf of each undersigned pursuant to and in accordance with the provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended. Dated: May 23, 2001 WARBURG, PINCUS & CO. By: /s/ Scott Arenare ----------------------------------- Name: Scott Arenare Title: Attorney-in-Fact Dated: May 23, 2001 WARBURG PINCUS LLC By: /s/ Scott Arenare ----------------------------------- Name: Scott Arenare Title: Attorney-in-Fact Dated: May 23, 2001 WARBURG, PINCUS VENTURES, L.P. By: Warburg, Pincus & Co., General Partner By: /s/ Scott Arenare ----------------------------------- Name: Scott Arenare Title: Attorney-in-Fact EX-99.2 3 b39512.txt STOCK PURCHASE AGREEMENT Exhibit 2 --------- Stock Purchase Agreement STOCK PURCHASE AGREEMENT The Medicines Company One Cambridge Center Cambridge, Massachusetts 02142 Ladies & Gentlemen: The undersigned, Warburg, Pincus Ventures, L.P. (the "Investor"), hereby confirms its agreement with you as follows: 1. This Stock Purchase Agreement (the "Agreement") is made as of May 11, 2001 between The Medicines Company, a Delaware corporation (the "Company"), and the Investor. 2. The Company has authorized the sale and issuance of up to 4,000,000 shares (the "Shares") of common stock of the Company, $0.001 par value per share (the "Common Stock"), to certain investors in a private placement (the "Offering"). 3. The Company and the Investor agree that the Investor will purchase from the Company and the Company will issue and sell to the Investor 1,050,000 Shares, for a purchase price of $11.00 per share, or an aggregate purchase price of $11,550,000, pursuant to the Terms and Conditions for Purchase of Shares attached hereto as Annex I and incorporated herein by reference as if fully set forth herein. Unless otherwise requested by the Investor, certificates representing the Shares purchased by the Investor will be registered in the Investor's name and address as set forth below. 4. The Investor represents that, except as set forth below, (a) it has had no position, office or other material relationship within the past three years with the Company or persons known to it to be affiliates of the Company, (b) neither it, nor any group of which it is a member or to which it is related, beneficially owns (including the right to acquire or vote) any securities of the Company and (c) it has no direct or indirect affiliation or association with any NASD member as of the date hereof. Exceptions: WP Ventures is existing shareholder. Stewart Hen and Nick Lowcock sit on board - -------------------------------------------------------------------------------- of company. - -------------------------------------------------------------------------------- (If no exceptions, write "none." If left blank, response will be deemed to be "none.") Please confirm that the foregoing correctly sets forth the agreement between us by signing in the space provided below for that purpose. By executing this Agreement, you acknowledge that the Company may use the information in paragraph 4 above and the name and address information below in preparation of the Registration Statement (as defined in Annex 1). [Remainder of Page Intentionally Left Blank] [SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT] AGREED AND ACCEPTED: THE MEDICINES COMPANY Investor: Warburg, Pincus Ventures, L.P. ------------------------------------- By: /s/ Stewart J. Hen ------------------------------------------- /s/ Peyton J. Marshall - -------------------------- By: Peyton J. Marshall Print Name: Stewart J. Hen Title: Chief Financial Officer ----------------------------------- Title: Vice President ---------------------------------------- Address: 466 Lexington Ave. -------------------------------------- New York, NY 10017 ----------------------------------------------- Tax ID No.: 13-3784037 ----------------------------------- Contact name: Stewart Hen --------------------------------- Telephone: 212-878-0795 ------------------------------------ Name in which shares should be registered (if different): ----------------------------------------------- -2- ANNEX I TERMS AND CONDITIONS FOR PURCHASE OF SHARES 1. AUTHORIZATION AND SALE OF THE SHARES. Subject to these Terms and Conditions for Purchase of Shares (the "Terms and Conditions"), the Company has authorized the sale of up to 4,000,000 Shares. The Company reserves the right to increase or decrease this number. 2. AGREEMENT TO SELL AND PURCHASE THE SHARES; SUBSCRIPTION DATE. 2.1 At the Closing (as defined in Section 3), the Company will sell to the Investor, and the Investor will purchase from the Company, upon the terms and conditions hereinafter set forth, the number of Shares set forth in Section 3 of the Stock Purchase Agreement to which these Terms and Conditions are attached at the purchase price set forth therein. 2.2 The Company may enter into the same form of Stock Purchase Agreement, including these Terms and Conditions, with certain other investors (the "Other Investors") and expects to complete sales of Shares to them. (The Investor and the Other Investors are hereinafter sometimes collectively referred to as the "Investors," and the Stock Purchase Agreement to which these Terms and Conditions are attached and the Stock Purchase Agreements (including attached Terms and Conditions) executed by the Other Investors are hereinafter sometimes collectively referred to as the "Agreements.") The Company may accept executed Agreements from Investors for the purchase of Shares commencing upon the date on which the Company provides the Investors with the proposed purchase price per Share and concluding upon the date (the "Subscription Date") on which the Company has (i) executed Agreements with Investors for the purchase of at least 4,000,000 Shares, and (ii) notified the Investors in writing that it is no longer accepting additional Agreements from Investors for the purchase of Shares. The Company may not enter into any Agreements after the Subscription Date. 3. DELIVERY OF THE SHARES AT CLOSING. The completion of the purchase and sale of the Shares (the "Closing") shall occur (the "Closing Date") on May 16, 2001, at the offices of the Company's counsel. At the Closing, the Company shall deliver to the Investor one or more stock certificates representing the number of Shares set forth in Section 3 of the Stock Purchase Agreement, each such certificate to be registered in the name of the Investor or, if so indicated on the signature page hereto, in the name of a nominee designated by the Investor. The Company's obligation to issue the Shares to the Investor shall be subject to the following conditions, any one or more of which may be waived by the Company: (a) receipt by the Company of a certified or official bank check or wire transfer of funds in the full amount of the purchase price for the Shares being purchased hereunder as set forth in Section 3 of the Stock Purchase Agreement; (b) completion of the purchases and sales under the Agreements with the Other Investors; and (c) the accuracy of the representations and warranties made by the Investors and the fulfillment of those undertakings of the Investors to be fulfilled prior to the Closing. The Investor's obligation to purchase the Shares shall be subject to the following conditions, any one or more of which may be waived by the Investor: (a) Investors shall have executed Agreements for the purchase of at least 4,000,000 Shares, (b) the representations and warranties of the Company set forth herein shall be true and correct as of the Closing Date in all material respects and (c) the Investor shall have received such documents as such Investor shall reasonably have requested, including, a standard opinion of Company Counsel as to the matters set forth in Section 4.2 and as to exemption from the registration requirements of the Securities Act of 1933, as amended (the "Securities Act"), of the sale of the Shares. 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company hereby represents and warrants to, and covenants with, the Investor, as follows: 4.1 ORGANIZATION. The Company is duly organized and validly existing in good standing under the laws of the jurisdiction of its organization. Each of the Company and its Subsidiaries (as defined in Rule 405 under the Securities Act) has full power and authority to own, operate and occupy its properties and to conduct its business as presently conducted and as described in the documents filed by the Company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), since the end of its most recently completed fiscal year through the date hereof, including, without limitation, its report on Form 10-K for the year ended December 31, 2000 and its current report on Form 10-Q for the quarter ended March 31, 2001 (the "Exchange -3- Act Documents"), and is registered or qualified to do business and in good standing in each jurisdiction in which the nature of the business conducted by it or the location of its properties owned or leased by it requires such qualification and where the failure to be so qualified would have a material adverse effect upon the condition (financial or otherwise), earnings, business or business prospects, properties or operations of the Company and its Subsidiaries, considered as one enterprise (a "Material Adverse Effect"), and no proceeding has been instituted in any such jurisdiction, revoking, limiting or curtailing, or seeking to revoke, limit or curtail, such power and authority or qualification. 4.2 DUE AUTHORIZATION AND VALID ISSUANCE. The Company has all requisite power and authority to execute, deliver and perform its obligations under the Agreements, and the Agreements have been duly authorized and validly executed and delivered by the Company and constitute legal, valid and binding agreements of the Company enforceable against the Company in accordance with their terms, except as rights to indemnity and contribution may be limited by state or federal securities laws or the public policy underlying such laws, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). The Shares being purchased by the Investor hereunder will, upon issuance and payment therefor pursuant to the terms hereof, be duly authorized, validly issued, fully-paid and nonassessable. 4.3 NON-CONTRAVENTION. The execution and delivery of the Agreements, the issuance and sale of the Shares under the Agreements, the fulfillment of the terms of the Agreements and the consummation of the transactions contemplated thereby will not (A) conflict with or constitute a violation of, or default (with the passage of time or otherwise) under, (i) any material bond, debenture, note or other evidence of indebtedness, lease, contract, indenture, mortgage, deed of trust, loan agreement, joint venture or other agreement or instrument to which the Company or any Subsidiary is a party or by which it or any of its Subsidiaries or their respective properties are bound, (ii) the charter, by-laws or other organizational documents of the Company or any Subsidiary, or (iii) any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or any Subsidiary or their respective properties, except in the case of clauses (i) and (iii) for any such conflicts, violations or defaults which are not reasonably likely to have a Material Adverse Effect or (B) result in the creation or imposition of any lien, encumbrance, claim, security interest or restriction whatsoever upon any of the material properties or assets of the Company or any Subsidiary or an acceleration of indebtedness pursuant to any obligation, agreement or condition contained in any material bond, debenture, note or any other evidence of indebtedness or any material indenture, mortgage, deed of trust or any other agreement or instrument to which the Company or any Subsidiary is a party or by which any of them is bound or to which any of the material property or assets of the Company or any Subsidiary is subject. No consent, approval, authorization or other order of, or registration, qualification or filing with, any regulatory body, administrative agency, or other governmental body in the United States or any other person is required for the execution and delivery of the Agreements and the valid issuance and sale of the Shares to be sold pursuant to the Agreements, other than such as have been made or obtained, and except for any post-closing securities filings or notifications required to be made under federal or state securities laws. 4.4 CAPITALIZATION. The capitalization of the Company as of March 31, 2001 is as set forth in the most recent applicable Exchange Act Documents, increased as set forth in the next sentence. The Company has not issued any capital stock since that date other than pursuant to (i) employee benefit plans disclosed in the Exchange Act Documents, or (ii) outstanding warrants, options or other securities disclosed in the Exchange Act Documents. The Shares to be sold pursuant to the Agreements have been duly authorized, and when issued and paid for in accordance with the terms of the Agreements will be duly and validly issued, fully paid and nonassessable. The outstanding shares of capital stock of the Company have been duly and validly issued and are fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and were not issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. Except as set forth in or contemplated by the Exchange Act Documents or options granted after March 31, 2001, there are no outstanding rights (including, without limitation, preemptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any unissued shares of capital stock or other equity interest in the Company or any Subsidiary, or any contract, commitment, agreement, understanding or arrangement of any kind to which the Company is a party or of which the Company has knowledge and relating to the issuance or sale of any capital stock of the Company or any Subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options. Without limiting the foregoing, except as set forth in the Exchange Act Documents, no preemptive right, co-sale right, right of first refusal, registration right, or other similar right exists with respect to the Shares or the issuance and sale thereof. No further approval or authorization of any stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Shares. The Company owns the entire equity interest in each of its Subsidiaries, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest, other than as described in the Exchange Act -4- Documents. Except as disclosed in the Exchange Act Documents, there are no stockholders agreements, voting agreements or other similar agreements with respect to the Common Stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders. 4.5 LEGAL PROCEEDINGS. There is no material legal or governmental proceeding pending or, to the knowledge of the Company, threatened to which the Company or any Subsidiary is or may be a party or of which the business or property of the Company or any Subsidiary is subject that is not disclosed in the Exchange Act Documents. 4.6 NO VIOLATIONS. Neither the Company nor any Subsidiary is in violation of its charter, bylaws, or other organizational document, or in violation of any law, administrative regulation, ordinance or order of any court or governmental agency, arbitration panel or authority applicable to the Company or any Subsidiary, which violation, individually or in the aggregate, would be reasonably likely to have a Material Adverse Effect, or is in default (and there exists no condition which, with the passage of time or otherwise, would constitute a default) in any material respect in the performance of any bond, debenture, note or any other evidence of indebtedness in any indenture, mortgage, deed of trust or any other material agreement or instrument to which the Company or any Subsidiary is a party or by which the Company or any Subsidiary is bound or by which the properties of the Company or any Subsidiary are bound, which would be reasonably likely to have a Material Adverse Effect upon the business or financial condition of the Company and its Subsidiaries, considered as one enterprise. 4.7 GOVERNMENTAL PERMITS, ETC. Each of the Company and its Subsidiaries has all necessary franchises, licenses, certificates, permits and other authorizations from any foreign, federal, state or local government or governmental agency, department, or body that are currently necessary for the operation of the business of the Company and its Subsidiaries as currently conducted and as described in the Exchange Act Documents except where the failure to currently possess could not reasonably be expected to have a Material Adverse Effect. 4.8 INTELLECTUAL PROPERTY. Except as specifically disclosed in the Exchange Act Documents (i) each of the Company and its Subsidiaries owns or possesses sufficient rights to use all material patents, patent rights, trademarks, copyrights, licenses, inventions, trade secrets, trade names and know-how (collectively, "Intellectual Property") described or referred to in the Exchange Act Documents as owned or possessed by it or that are necessary for the conduct of its business as now conducted or as proposed to be conducted as described in the Exchange Act Documents except where the failure to currently own or possess would not have a Material Adverse Effect, (ii) neither the Company nor any of its Subsidiaries has received any notice of infringement, or to the best knowledge of the Company after due inquiry neither the Company nor any of its Subsidiaries is infringing, or has any knowledge of, any asserted infringement by the Company or any of its Subsidiaries of, any rights of a third party with respect to any Intellectual Property that, individually or in the aggregate, would have a Material Adverse Effect and (iii) neither the Company nor any of its Subsidiaries has received any notice of, or has any knowledge of, infringement by a third party with respect to any Intellectual Property rights of the Company or of any Subsidiary that, individually or in the aggregate, would have a Material Adverse Effect. 4.9 FINANCIAL STATEMENTS. The financial statements of the Company and the related notes contained in the Exchange Act Documents present fairly, in accordance with generally accepted accounting principles, the financial position of the Company and its Subsidiaries as of the dates indicated, and the results of its operations and cash flows for the periods therein specified consistent with the books and records of the Company and its Subsidiaries except that unaudited interim financial statements were or are subject to normal and recurring year-end adjustments which are not expected to be material in amount. Such financial statements (including the related notes) have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods therein specified, except as may be included in the notes to such financial statements, or the case of unaudited statements, as may be permitted by the SEC on Form 10-Q under the Exchange Act and except as disclosed in the Exchange Act Documents. The other financial information contained in the Exchange Act Documents has been prepared on a basis consistent with the financial statements of the Company. 4.10 NO MATERIAL ADVERSE CHANGE. Except as disclosed in the Exchange Act Documents, since March 31, 2001, there has not been (i) any material adverse change in the financial condition or earnings of the Company and its Subsidiaries considered as one enterprise, (ii) any material adverse event affecting the Company or its Subsidiaries, (iii) any obligation, direct or contingent, that is material to the Company and its Subsidiaries considered as one enterprise, incurred by the Company, except obligations incurred in the ordinary course of business, (iv) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any of its Subsidiaries, or (v) any loss or damage (whether or not insured) to the physical property of the Company or any of its Subsidiaries which has been sustained which has a Material Adverse Effect. -5- 4.11 DISCLOSURE. The representations and warranties of the Company contained in this Section 4 as of the date hereof and as of the Closing Date, did not and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. In addition, since January 5, 2001, the date that the Company filed its registration statement on Form S-1 which was subsequently withdrawn on March 19, 2001, there have been no changes in the Company's business or financial condition that are material to the investment decision of the Investor in the Offering and have not been disclosed in the Exchange Act Documents. 4.12 NASDAQ COMPLIANCE. The Company's Common Stock is registered pursuant to Section 12(g) of the Exchange Act and is listed on The Nasdaq Stock Market, Inc. National Market (the "Nasdaq National Market"), and the Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act or de-listing the Common Stock from the Nasdaq National Market, nor has the Company received any notification that the Securities and Exchange Commission (the "SEC") or the National Association of Securities Dealers, Inc. ("NASD") is contemplating terminating such registration or listing. 4.13 REPORTING STATUS. The Company has filed in a timely manner all documents that the Company was required to file under the Exchange Act during the period from August 8, 2000, the closing date of the Company's initial public offering, to the date of this Agreement. The following documents complied in all material respects with the SEC's requirements as of their respective filing dates, and the information contained therein as of the date thereof did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances under which they were made not misleading: (a) amendment no. 1 to the proxy statement pursuant to Section 14(a) of the Exchange Act, filed on May 3, 2001; (b) the proxy statement pursuant to Section 14(a) of the Exchange Act, filed on April 30, 2001; (c) the annual report on Form 10-K for the year ended December 31, 2000, filed on April 2, 2001; (d) the quarterly report on Form 10-Q for the quarter ended March 31, 2001 filed on May 10, 2001; (e) the quarterly report on Form 10-Q for the quarter ended September 30, 2001, filed on November 8, 2001; (f) the quarterly report on Form 10-Q for the quarter ended June 30, 2000, filed on September 19, 2000; (g) the registration on Form 8-A, under the Exchange Act, filed July 28, 2000; and (h) All other documents, if any, filed by the Company with the SEC since August 8, 2000 pursuant to the reporting requirements of the Exchange Act. 4.14 LISTING. The Company shall comply with all requirements of the National Association of Securities Dealers, Inc. with respect to the issuance of the Shares and the listing thereof on the Nasdaq National Market. 4.15 NO MANIPULATION OF STOCK. The Company has not taken and will not, in violation of applicable law, take, any action designed to or that might reasonably be expected to cause or result in stabilization or manipulation of the price of the Common Stock to facilitate the sale or resale of the Shares. 4.16 COMPANY NOT AN "INVESTMENT COMPANY". The Company has been advised of the rules and requirements under the Investment Company Act of 1940, as amended (the "Investment Company Act"). The Company is not, and immediately after receipt of payment for the Shares will not be, an "investment company" or an entity "controlled" by an -6- "investment company" within the meaning of the Investment Company Act and shall conduct its business in a manner so that it will not become subject to the Investment Company Act. 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR. 5.1 The Investor represents and warrants to, and covenants with, the Company that: (i) the Investor is an "accredited investor" as defined in Regulation D under the Securities Act and the Investor is also knowledgeable, sophisticated and experienced in making, and is qualified to make decisions with respect to investments in shares presenting an investment decision like that involved in the purchase of the Shares, including investments in securities issued by the Company and investments in comparable companies, and has requested, received, reviewed and considered all information it deemed relevant in making an informed decision to purchase the Shares; (ii) the Investor is acquiring the number of Shares set forth in Section 3 of the Stock Purchase Agreement in the ordinary course of its business and for its own account for investment only and with no present intention of distributing any of such Shares or any arrangement or understanding with any other persons regarding the distribution of such Shares; (iii) the Investor will not, directly or indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase or otherwise acquire or take a pledge of) any of the Shares except in compliance with the Securities Act, applicable state securities laws and the respective rules and regulations promulgated thereunder; (iv) the Investor has answered all questions on the Investor Questionnaire for use in preparation of the Registration Statement and the answers thereto are true, correct and complete as of the date hereof and will be true, correct and complete as of the Closing Date; (v) the Investor will notify the Company immediately of any change in any of such information until such time as the Investor has sold all of its Shares or until the Company is no longer required to keep the Registration Statement effective; and (vi) the Investor has, in connection with its decision to purchase the number of Shares set forth in Section 3 of the Stock Purchase Agreement, relied only upon the Exchange Act Documents and the representations and warranties of the Company contained herein. The Investor understands that its acquisition of the Shares has not been registered under the Securities Act or registered or qualified under any state securities law in reliance on specific exemptions therefrom, which exemptions may depend upon, among other things, the bona fide nature of the Investor's investment intent as expressed herein. Investor has completed or caused to be completed and delivered to the Company the Investor Questionnaire, which questionnaire is true, correct and complete in all material respects. 5.2 The Investor acknowledges, represents and agrees that no action has been or will be taken in any jurisdiction outside the United States by the Company that would permit an offering of the Shares, or possession or distribution of offering materials in connection with the issue of the Shares, in any jurisdiction outside the United States where legal action by the Company for that purpose is required. Each Investor outside the United States will comply with all applicable laws and regulations in each foreign jurisdiction in which it purchases, offers, sells or delivers Shares or has in its possession or distributes any offering material, in all cases at its own expense. 5.3 The Investor hereby covenants with the Company not to make any sale of the Shares without complying with the provisions of this Agreement and without causing the prospectus delivery requirement under the Securities Act to be satisfied, and the Investor acknowledges that the certificates evidencing the Shares will be imprinted with a legend that prohibits their transfer except in accordance therewith. The Investor acknowledges that there may occasionally be times when the Company determines that it must suspend the use of the Prospectus forming a part of the Registration Statement, as set forth in Section 7.2(c). 5.4 The Investor further represents and warrants to, and covenants with, the Company that (i) the Investor has full right, power, authority and capacity to enter into this Agreement and to consummate the transactions contemplated hereby and has taken all necessary action to authorize the execution, delivery and performance of this Agreement, and (ii) this Agreement constitutes a valid and binding obligation of the Investor enforceable against the Investor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' and contracting parties' rights generally and except as enforceability may be subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law) and except as the indemnification agreements of the Investors herein may be legally unenforceable. 5.5 Investor will not use any of the restricted Shares acquired pursuant to this Agreement to cover any short position in the Common Stock of the Company if doing so would be in violation of applicable securities laws. 5.6 The Investor understands that nothing in the Exchange Act Documents, this Agreement or any other materials presented to the Investor in connection with the purchase and sale of the Shares constitutes legal, tax or investment -7- advice. The Investor has consulted such legal, tax and investment advisors as it, in its sole discretion, has deemed necessary or appropriate in connection with its purchase of Shares. 5.7 The Investor understands that the Company filed a registration statement on Form S-1 under the Securities Act on January 5, 2001, as amended on January 26, 2001 and February 23, 2001, for a public offering of shares of the Company's Common Stock, that such public offering was never completed and has been abandoned and that such registration statement was withdrawn on March 19, 2001. The Investor understands that the Shares have not been registered under the Securities Act by reason of their issuance in a transaction exempt from the registration requirements of the Securities Act pursuant to Section 4(2) or Regulation D promulgated thereunder and, as a result, the Investor will not have the protection of Section 11 of the Securities Act (15 U.S.C. 77k) with respect to the purchase of the Shares. 6. ___ SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Notwithstanding any investigation made by any party to this Agreement, all covenants, agreements, representations and warranties made by the Company and the Investor herein shall survive the execution of this Agreement, the delivery to the Investor of the Shares being purchased and the payment therefor. 7. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT. 7.1 REGISTRATION PROCEDURES AND OTHER MATTERS. The Company shall: (a) subject to receipt of necessary information from the Investors after prompt request from the Company to the Investors to provide such information, prepare and file with the SEC, within 10 days after the Closing Date, a registration statement on Form S-1 (the "S-1 Registration Statement") to enable the resale of the Shares by the Investors from time to time through the automated quotation system of the Nasdaq National Market or in privately-negotiated transactions; (b) use its reasonable best efforts, subject to receipt of necessary information from the Investors after prompt request from the Company to the Investors to provide such information, to cause the S-1 Registration Statement to become effective within 30 days after the S-1 Registration Statement is filed by the Company such efforts to include, without limiting the generality of the foregoing, preparing and filing with the SEC in such 30-day period any financial statements that are required to be filed prior to the effectiveness of such S-1 Registration Statement; (c) use its reasonable best efforts, subject to receipt of necessary information from the Investors after prompt request from the Company to the Investors to provide such information, to prepare and file with the SEC, within 10 days after the Company first becomes eligible to file a registration statement on Form S-3, a registration statement on Form S-3 (the "S-3 Registration Statement") to enable the resale of the Shares by the Investors from time to time through the automated quotation system of the Nasdaq National Market or in privately-negotiated transactions; and to use its reasonable best efforts to cause the S-3 Registration Statement to become effective as soon as practicable thereafter, such efforts to include, without limiting the generality of the foregoing, preparing and filing with the SEC as promptly as practicable any financial statements that are required to be filed prior to the effectiveness of such S-3 Registration Statement (the term "Registration Statement" shall mean the S-1 Registration Statement until the S-3 Registration Statement is declared effective by the SEC, after which time it shall mean the S-3 Registration Statement). (d) use its reasonable best efforts to prepare and file with the SEC such amendments and supplements to the Registration Statement and the Prospectus used in connection therewith as may be necessary to keep the Registration Statement current, effective and free from any material misstatement or omission to state a material fact for a period not exceeding, with respect to each Investor's Shares purchased hereunder, the earlier of (i) the second anniversary of the Closing Date, (ii) the date on which the Investor may sell all Shares then held by the Investor without restriction by the volume limitations of Rule 144(e) of the Securities Act, or (iii) such time as all Shares purchased by such Investor in this Offering have been sold pursuant to a registration statement; (e) furnish to the Investor with respect to the Shares registered under the Registration Statement such number of copies of the Registration Statement, Prospectuses and Preliminary Prospectuses in conformity with the requirements of the Securities Act and such other documents as the Investor may reasonably request, in order to facilitate the public sale or other disposition of all or any of the Shares by the Investor; provided, however, that the obligation of the Company to deliver copies of Prospectuses or Preliminary Prospectuses to the Investor shall be subject to the receipt by the Company of reasonable assurances from the Investor that the Investor will comply with the applicable provisions of the Securities Act and of such -8- other securities or blue sky laws as may be applicable in connection with any use of such Prospectuses or Preliminary Prospectuses; (f) file documents required of the Company for normal blue sky clearance in states specified in writing by the Investor and use its reasonable best efforts to maintain such blue sky qualifications during the period the Company is required to maintain the effectiveness of the Registration Statement pursuant to Section 7.1(d); provided, however, that the Company shall not be required to qualify to do business or consent to service of process in any jurisdiction in which it is not now so qualified or has not so consented; (g) bear all expenses in connection with the procedures in paragraph (a) through (f) of this Section 7.1 and the registration of the Shares pursuant to the Registration Statement; and (h) advise the Investor, promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the SEC delaying or suspending the effectiveness of the Registration Statement or of the initiation or threat of any proceeding for that purpose; and it will promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliest possible moment if such stop order should be issued. Notwithstanding anything to the contrary herein, the Registration Statement shall cover only the Shares. In no event at any time before the Registration Statement becomes effective with respect to the Shares shall the Company publicly announce or file any other registration statement, other than registration statements on Form S-8, without the prior written consent of a majority in interest of the Investors. The Company understands that the Investor disclaims being an underwriter, but the Investor being deemed an underwriter by the SEC shall not relieve the Company of any obligations it has hereunder; PROVIDED, HOWEVER that if the Company receives notification from the SEC that the Investor is deemed an underwriter, then the period by which the Company is obligated to submit an acceleration request to the SEC shall be extended to the earlier of (i) the 90th day after such SEC notification, or (ii) 120 days after the initial filing of the Registration Statement with the SEC. 7.2 TRANSFER OF SHARES AFTER REGISTRATION; SUSPENSION. (a) The Investor agrees that it will not effect any disposition of the Shares or its right to purchase the Shares that would constitute a sale within the meaning of the Securities Act except as contemplated in the Registration Statement referred to in Section 7.1 and as described below or as otherwise permitted by law, and that it will promptly notify the Company of any changes in the information set forth in the Registration Statement regarding the Investor or its plan of distribution. (b) Except in the event that paragraph (c) below applies, the Company shall (i) if deemed necessary by the Company, prepare and file from time to time with the SEC a post-effective amendment to the Registration Statement or a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document so that such Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and so that, as thereafter delivered to purchasers of the Shares being sold thereunder, such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) provide the Investor copies of any documents filed pursuant to Section 7.2(b)(i); and (iii) inform each Investor that the Company has complied with its obligations in Section 7.2(b)(i) (or that, if the Company has filed a post-effective amendment to the Registration Statement which has not yet been declared effective, the Company will notify the Investor to that effect, will use its reasonable best efforts to secure the effectiveness of such post-effective amendment as promptly as possible and will promptly notify the Investor pursuant to Section 7.2(b)(i) hereof when the amendment has become effective). (c) Subject to paragraph (d) below, in the event (i) of any request by the SEC or any other federal or state governmental authority during the period of effectiveness of the Registration Statement for amendments or supplements to a Registration Statement or related Prospectus or for additional information; (ii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose; (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction or the initiation or threatening of any -9- proceeding for such purpose; or (iv) of any event or circumstance which, upon the advice of its counsel, necessitates the making of any changes in the Registration Statement or Prospectus, or any document incorporated or deemed to be incorporated therein by reference, so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or any omission to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; then the Company shall deliver a certificate in writing to the Investor (the "Suspension Notice") to the effect of the foregoing and, upon receipt of such Suspension Notice, the Investor will refrain from selling any Shares pursuant to the Registration Statement (a "Suspension") until the Investor's receipt of copies of a supplemented or amended Prospectus prepared and filed by the Company, or until it is advised in writing by the Company that the current Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in any such Prospectus. In the event of any Suspension, the Company will use its reasonable best efforts to cause the use of the Prospectus so suspended to be resumed as soon as reasonably practicable within 20 business days after the delivery of a Suspension Notice to the Investor. In addition to and without limiting any other remedies (including, without limitation, at law or at equity) available to the Investor, the Investor shall be entitled to specific performance in the event that the Company fails to comply with the provisions of this Section 7.2(c). (d) Notwithstanding the foregoing paragraphs of this Section 7.2, the Investor shall not be prohibited from selling Shares under the Registration Statement as a result of Suspensions on more than two occasions of not more than 30 days each in any twelve month period, unless, in the good faith judgment of the Company's Board of Directors, upon the written opinion of counsel of counsel, the sale of Shares under the Registration Statement in reliance on this paragraph 7.2(d) would be reasonably likely to cause a violation of the Securities Act or the Exchange Act and result in liability to the Company. (e) Provided that a Suspension is not then in effect, the Investor may sell Shares under the Registration Statement, provided that it arranges for delivery of a current Prospectus to the transferee of such Shares. Upon receipt of a request therefor, the Company has agreed to provide an adequate number of current Prospectuses to the Investor and to supply copies to any other parties requiring such Prospectuses. (f) In the event of a sale of Shares by the Investor pursuant to the Registration Statement, the Investor must also deliver to the Company's transfer agent, with a copy to the Company, a Certificate of Subsequent Sale substantially in the form attached hereto as EXHIBIT A, so that the Shares may be properly transferred. 7.3 INDEMNIFICATION. For the purpose of this Section 7.3: (i) the term "Selling Stockholder" shall include the Investor and any affiliate of such Investor; (ii) the term "Registration Statement" shall include the Prospectus in the form first filed with the SEC pursuant to Rule 424(b) of the Securities Act or filed as part of the Registration Statement at the time of effectiveness if no Rule 424(b) filing is required, exhibit, supplement or amendment included in or relating to the Registration Statement referred to in Section 7.1; and (iii) the term "untrue statement" shall include any untrue statement or alleged untrue statement, or any omission or alleged omission to state in the Registration Statement a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (a) The Company agrees to indemnify and hold harmless each Selling Stockholder from and against any losses, claims, damages or liabilities to which such Selling Stockholder may become subject (under the Securities Act or otherwise) insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon (i) any breach of the representations or warranties of the Company contained herein or failure to comply with the covenants and agreements of the Company contained herein, (ii) any untrue statement of a material fact contained in the Registration Statement as amended at the time of effectiveness or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, or (iii) any failure by the Company to fulfill any undertaking included in the Registration Statement as amended at the time of effectiveness, and the Company will reimburse such Selling Stockholder for any reasonable legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim, or preparing to defend any such action, proceeding or claim, PROVIDED, HOWEVER, that the Company shall not -10- be liable in any such case to the extent that such loss, claim, damage or liability arises out of, or is based upon, an untrue statement made in such Registration Statement or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading in reliance upon and in conformity with written information furnished to the Company by or on behalf of such Selling Stockholder specifically for use in preparation of the Registration Statement or the failure of such Selling Stockholder to comply with its covenants and agreements contained in Section 7.2 hereof respecting sale of the Shares or any statement or omission in any Prospectus that is corrected in any subsequent Prospectus that was delivered to the Selling Stockholder prior to the pertinent sale or sales by the Selling Stockholder. The Company shall reimburse each Selling Stockholder for the amounts provided for herein on demand as such expenses are incurred. (b) The Investor agrees to indemnify and hold harmless the Company (and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, each officer of the Company who signs the Registration Statement and each director of the Company) from and against any losses, claims, damages or liabilities to which the Company (or any such officer, director or controlling person) may become subject (under the Securities Act or otherwise), insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of, or are based upon, (i) any failure to comply with the covenants and agreements contained in Section 7.2 hereof respecting sale of the Shares, or (ii) any untrue statement of a material fact contained in the Registration Statement or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading if such untrue statement or omission was made in reliance upon and in conformity with written information furnished by or on behalf of the Investor specifically for use in preparation of the Registration Statement, and the Investor will reimburse the Company (or such officer, director or controlling person), as the case may be, for any legal or other expenses reasonably incurred in investigating, defending or preparing to defend any such action, proceeding or claim; provided that the Investor's obligation to indemnify the Company shall be limited to the net amount received by the Investor from the sale of the Shares. (c) Promptly after receipt by any indemnified person of a notice of a claim or the beginning of any action in respect of which indemnity is to be sought against an indemnifying person pursuant to this Section 7.3, such indemnified person shall notify the indemnifying person in writing of such claim or of the commencement of such action, but the omission to so notify the indemnifying person will not relieve it from any liability which it may have to any indemnified person under this Section 7.3 (except to the extent that such omission materially and adversely affects the indemnifying person's ability to defend such action) or from any liability otherwise than under this Section 7.3. Subject to the provisions hereinafter stated, in case any such action shall be brought against an indemnified person, the indemnifying person shall be entitled to participate therein, and, to the extent that it shall elect by written notice delivered to the indemnified person promptly after receiving the aforesaid notice from such indemnified person, shall be entitled to assume the defense thereof, with counsel reasonably satisfactory to such indemnified person. After notice from the indemnifying person to such indemnified person of its election to assume the defense thereof, such indemnifying person shall not be liable to such indemnified person for any legal expenses subsequently incurred by such indemnified person in connection with the defense thereof, PROVIDED, HOWEVER, that if there exists or shall exist a conflict of interest that would make it inappropriate, in the opinion of counsel to the indemnified person, for the same counsel to represent both the indemnified person and such indemnifying person or any affiliate or associate thereof, the indemnified person shall be entitled to retain its own counsel at the expense of such indemnifying person; provided, however, that no indemnifying person shall be responsible for the fees and expenses of more than one separate counsel (together with appropriate local counsel) for all indemnified parties. In no event shall any indemnifying person be liable in respect of any amounts paid in settlement of any action unless the indemnifying person shall have approved the terms of such settlement; PROVIDED that such consent shall not be unreasonably withheld. No indemnifying person shall, without the prior written consent of the indemnified person, effect any settlement of any pending or threatened proceeding in respect of which any indemnified person is or could have been a party and indemnification could have been sought hereunder by such indemnified person, unless such settlement includes an unconditional release of such indemnified person from all liability on claims that are the subject matter of such proceeding. (d) If the indemnification provided for in this Section 7.3 is unavailable to or insufficient to hold harmless an indemnified person under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each indemnifying person shall contribute to the amount paid or payable by such indemnified person 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 fault of the Company on the one hand and the Investor, as well as any other Selling Shareholders under such registration statement on the other in connection with the statements or omissions or other matters which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault shall be determined by reference to, among other things, in the case of an untrue statement, whether the untrue statement relates to information supplied by the Company on the one hand or an Investor or other Selling -11- Shareholder on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement. The Company and the Investor 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 Investor and other Selling Shareholders were treated as one entity for such purpose) or by any other method of allocation which does not take into account the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified person 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 person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), the Investor shall not be required to contribute any amount in excess of the amount by which the net amount received by the Investor from the sale of the Shares to which such loss relates exceeds the amount of any damages which such Investor has otherwise been required to pay by reason of such untrue statement. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Investor's obligations in this subsection to contribute shall be in proportion to its Investor sale of Shares to which such loss relates and shall not be joint with any other Selling Shareholders. (e) The parties to this Agreement hereby acknowledge that they are sophisticated business persons who were represented by counsel during the negotiations regarding the provisions hereof including, without limitation, the provisions of this Section 7.3, and are fully informed regarding said provisions. They further acknowledge that the provisions of this Section 7.3 fairly allocate the risks in light of the ability of the parties to investigate the Company and its business in order to assure that adequate disclosure is made in the Registration Statement as required by the Act and the Exchange Act. The parties are advised that federal or state public policy as interpreted by the courts in certain jurisdictions may be contrary to certain of the provisions of this Section 7.3, and the parties hereto hereby expressly waive and relinquish any right or ability to assert such public policy as a defense to a claim under this Section 7.3 and further agree not to attempt to assert any such defense. 7.4 TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions precedent imposed by Section 5 or this Section 7 upon the transferability of the Shares shall cease and terminate as to any particular number of the Shares when such Shares shall have been effectively registered under the Securities Act and sold or otherwise disposed of in accordance with the intended method of disposition set forth in the Registration Statement covering such Shares or at such time as an opinion of counsel reasonably satisfactory to the Company shall have been rendered to the effect that such conditions are not necessary in order to comply with the Securities Act. 7.5 INFORMATION AVAILABLE. So long as the Registration Statement is effective covering the resale of Shares owned by the Investor, the Company will furnish to the Investor: (a) as soon as practicable after it is available, one copy of (i) its Annual Report to Stockholders (which Annual Report shall contain financial statements audited in accordance with generally accepted accounting principles by a national firm of certified public accountants), (ii) its Annual Report on Form 10-K and (iii) its Quarterly Reports on Form 10-Q (the foregoing, in each case, excluding exhibits); (b) upon the request of the Investor, all exhibits excluded by the parenthetical to subparagraph (a) of this Section 7.5 as filed with the SEC and all other information that is made available to shareholders; and (c) upon the reasonable request of the Investor, an adequate number of copies of the Prospectuses to supply to any other party requiring such Prospectuses; and upon the reasonable request of the Investor, the President or the Chief Financial Officer of the Company (or an appropriate designee thereof) will meet with the Investor or a representative thereof at the Company's headquarters to discuss all information relevant for disclosure in the Registration Statement covering the Shares and will otherwise cooperate with any Investor conducting an investigation for the purpose of reducing or eliminating such Investor's exposure to liability under the Securities Act, including the reasonable production of information at the Company's headquarters; provided, that the Company shall not be required to disclose any confidential information to or meet at its headquarters with any Investor until and unless the Investor shall have entered into a confidentiality agreement in form and substance reasonably satisfactory to the Company with the Company with respect thereto. 8. NOTICES. All notices, requests, consents and other communications hereunder shall be in writing, shall be mailed (A) if within the United States by first-class registered or certified airmail, or nationally recognized overnight express courier, postage prepaid, or by facsimile, or (B) if delivered from outside the United States, by International Federal Express or facsimile, and shall be deemed given (i) if delivered by first-class registered or certified mail, three business days after so mailed, (ii) -12- if delivered by nationally recognized overnight carrier, one business day after so mailed, (iii) if delivered by International Federal Express, two business days after so mailed, (iv) if delivered by facsimile, upon electronic confirmation of receipt and shall be delivered as addressed as follows: (a) if to the Company, to: The Medicines Company One Cambridge Center Cambridge, Massachusetts 02142 Attn: Clive A. Meanwell (b) with a copy to: Hale and Dorr LLP 60 State Street Boston, Massachusetts 02109 Attn: Stuart M. Falber, Esq. (c) if to the Investor, at its address on the signature page hereto, or at such other address or addresses as may have been furnished to the Company in writing. 9. CHANGES. This Agreement may not be modified or amended except pursuant to an instrument in writing signed by the Company and the Investor. 10. HEADINGS. The headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement. 11. SEVERABILITY. In case any provision contained in this Agreement should be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby. 12. GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with, the internal laws of the State of Delaware, without giving effect to the principles of conflicts of law. 13. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one instrument, and shall become effective when one or more counterparts have been signed by each party hereto and delivered to the other parties. 14. RULE 144. The Company covenants that it will timely file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder (or, if the Company is not required to file such reports, it will, upon the request of any Investor holding Shares purchased hereunder made after the first anniversary of the Closing Date, make publicly available such information as necessary to permit sales pursuant to Rule 144 under the Securities Act), and it will take such further action as any such Investor may reasonably request, all to the extent required from time to time to enable such Investor to sell Shares purchased hereunder without registration under the Securities Act within the limitation of the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the SEC. Upon the request of the Investor, the Company will deliver to such holder a written statement as to whether it has complied with such information and requirements. 15. CONFIDENTIAL INFORMATION. The Investor represents to the Company that, at all times during the Company's offering of the Shares, the Investor has maintained in confidence all non-public information regarding the Company received by the Investor from the Company or its agents, and covenants that it will continue to maintain in confidence such information until such information (a) becomes generally publicly available other than through a violation of this provision by the Investor or its agents or (b) is required to be disclosed in legal proceedings (such as by deposition, interrogatory, request for documents, subpoena, civil investigation demand, filing with any governmental authority or similar process), PROVIDED, HOWEVER, that before making any use or -13- disclosure in reliance on this subparagraph (b) the Investor shall give the Company at least fifteen (15) days prior written notice (or such shorter period as required by law) specifying the circumstances giving rise thereto and will furnish only that portion of the non-public information which is legally required and will exercise its reasonable best efforts to obtain reliable assurance that confidential treatment will be accorded any non-public information so furnished. -14- -----END PRIVACY-ENHANCED MESSAGE-----