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Exhibit 1.1
3,100,000 SHARES
TRANSKARYOTIC THERAPIES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
June 25, 2001
XX XXXXX SECURITIES CORPORATION
As Representative of the several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Transkaryotic Therapies, Inc., a Delaware corporation
(the "Company"), proposes to sell, pursuant to the terms of this Agreement, to
the several underwriters named in Schedule A hereto (the "Underwriters," or,
each, an "Underwriter"), an aggregate of 3,100,000 shares of Common Stock, $.01
par value per share (the "Common Stock"), of the Company. The aggregate of
3,100,000 shares so proposed to be sold is hereinafter referred to as the "Firm
Stock". The Company also propose to sell to the Underwriters, upon the terms and
conditions set forth in Section 3 hereof, up to an additional 465,000 shares of
Common Stock (the "Optional Stock"). The Firm Stock and the Optional Stock are
hereinafter collectively referred to as the "Stock". XX Xxxxx Securities
Corporation ("XX Xxxxx") is acting as representative of the several Underwriters
and in such capacity is hereinafter referred to as the "Representative."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-51772) (the
"Initial Registration Statement") in respect of the Stock has been filed
with the Securities and Exchange Commission (the "Commission"); the
Initial Registration Statement and any post-effective amendment thereto,
each in the form heretofore delivered to you, and, excluding exhibits
thereto but including all documents incorporated by reference in the
prospectus contained therein, to you for each of the other Underwriters,
have been declared effective by the Commission in such form; other than
a registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Securities Act"), and
the rules and regulations (the "Rules and Regulations") of the
Commission thereunder, which became effective upon filing, no other
document with respect to the Initial Registration Statement or document
incorporated by reference therein has heretofore been filed with the
Commission of which the Company has not advised you; and no stop order
suspending the effectiveness of the Initial Registration Statement, any
post-effective amendment thereto or the Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose
has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with
the Commission pursuant to Rule 424(a) of the Rules and Regulations, is
hereinafter called a "Preliminary Prospectus");
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the various parts of the Initial Registration Statement and the Rule
462(b) Registration Statement, if any, including all exhibits thereto
and including (i) the information contained in the form of final
prospectus filed with the Commission pursuant to Rule 424(b) under the
Securities Act and deemed by virtue of Rule 430A under the Securities
Act to be part of the Initial Registration Statement at the time it was
declared effective and (ii) the documents incorporated by reference in
the prospectus contained in the Initial Registration Statement at the
time such part of the Initial Registration Statement became effective,
each as amended at the time such part of the Initial Registration
Statement became effective or such part of the Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, are
hereinafter collectively called the "Registration Statements"; and such
final prospectus, in the form most recently filed pursuant to Rule
424(b) under the Securities Act, is hereinafter called the
"Prospectus"; and any reference herein to any Preliminary Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Securities Act, as of the date of such Preliminary Prospectus or
Prospectus, as the case may be, any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after the date of
such Preliminary Prospectus or Prospectus, as the case may be, under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; and any reference to any amendment to
the Registration Statements shall be deemed to refer to and include any
annual report of the Company filed pursuant to Section 13(a) or 15(d)
of the Exchange Act after the effective date of the Initial
Registration Statement that is incorporated by reference in the
Registration Statements. No document has been or will be prepared or
distributed in reliance on Rule 434 under the Securities Act. No order
preventing or suspending the use of any Preliminary Prospectus has been
issued by the Commission.
(b) The Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or
supplements to either of the Registration Statements or the Prospectus,
when they become effective or are filed with the Commission, as the case
may be, will conform) in all material respects to the requirements of
the Securities Act and the Rules and Regulations and do not and will
not, as of the applicable effective date (as to the Registration
Statements and any amendment thereto) and as of the applicable filing
date (as to the Prospectus and any amendment or supplement thereto)
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that the foregoing
representations and warranties shall not apply to information contained
in or omitted from the Registration Statements or the Prospectus or any
such amendment or supplement thereto in reliance upon, and in conformity
with, written information furnished to the Company through the
Representative by or on behalf of any Underwriter specifically for
inclusion therein.
(c) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder, and none of such documents as of such dates
contained any untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus, when such documents
become effective or are filed with Commission , as the case may be, will
conform in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder and will not contain any untrue statement of
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a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading; provided, however, that the foregoing representations and
warranties shall not apply to information contained in or omitted from
any such document so filed after the date hereof in reliance upon, and
in conformity with, written information furnished to the Company
through the Representative by or on behalf of any Underwriter
specifically for inclusion therein.
(d) The Company and each of its subsidiaries (as defined in Section 14)
have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good
standing as foreign corporations in each jurisdiction in which their
respective ownership or lease of property or the conduct of their
respective businesses requires such qualification (it being understood
that some or all of the foregoing statements may not be applicable to
the Company's Swedish subsidiary as a matter of Swedish law), and have
all power and authority necessary to own or hold their respective
properties and to conduct the businesses in which they are engaged,
except where the failure to so qualify or have such power or authority
would not have, singularly or in the aggregate, a material adverse
effect on the condition (financial or otherwise), results of operations,
business or prospects of the Company and its subsidiaries taken as a
whole (a "Material Adverse Effect"). The Company does not own or
control, directly or indirectly, any corporations, associations or other
entities, except such corporations as are set forth on the Company's
Form 10-K for the year ended December 31, 2000, including the exhibits
thereto or such corporations ("Insignificant Subsidiaries") as would not
be required to be listed as a subsidiary under Item 601 of Regulation
S-K).
(e) This Agreement has been duly authorized executed and delivered by
the Company.
(f) The Stock to be issued and sold by the Company to the Underwriters
hereunder has been duly and validly authorized and, when issued and
delivered against payment therefor as provided herein, will be duly and
validly issued, fully paid and non-assessable and free of any preemptive
or similar rights and will conform to the description thereof contained
in the Prospectus.
(g) The Company's authorized capital stock consists of 10,000,000 shares
of Preferred Stock, of which 10,000 shares have been designated as
Series A Convertible Preferred Stock, and 1,000,000 shares have been
designated as Series B Junior Participating Preferred Stock, and
100,000,000 shares of Common Stock, and all of the issued and
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the Prospectus.
(h) All the outstanding shares of capital stock of each subsidiary of
the Company have been duly authorized and validly issued, are fully paid
and non-assessable and, except to the extent set forth in the Prospectus
and except with respect to TKT Europe 5S AB or any Insignificant
Subsidiary, are owned by the Company directly or indirectly through one
or more wholly-owned subsidiaries, free and clear of any claim, lien,
encumbrance, security interest, restriction upon voting or transfer or
any other claim of any third party.
(i) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby
will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which
the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject,
except such conflicts, breach, violation or default which, singularly or
in the aggregate, would
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not have a Material Adverse Effect, nor will such actions result in any
violation of the provisions of the charter or by-laws of the Company or
any of its subsidiaries or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties or
assets.
(j) Except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(k) Ernst & Young LLP, who have expressed their opinions on the audited
financial statements included or incorporated by reference in the
Registration Statements and the Prospectus, are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(l) The financial statements, together with the related notes, included
or incorporated by reference in the Prospectus and in each Registration
Statement fairly present the financial position and the results of
operations and changes in financial position of the Company and its
consolidated subsidiaries at the respective dates or for the respective
periods therein specified. Such statements and related notes have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis except as may be set forth in the
Prospectus.
(m) Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since the respective dates
as of which information is given in the Prospectus, there has not been
any change in the capital stock (excluding stock option grants and the
exercise of stock options) or long-term debt of the Company or any of
its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
business, general affairs, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries
taken as a whole, otherwise than as set forth or contemplated in the
Prospectus.
(n) Except as set forth in the Prospectus, there is no legal or
governmental proceeding pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, singularly or
in the aggregate, if determined adversely to the Company or any of its
subsidiaries, might have a Material Adverse Effect or would prevent or
adversely affect the ability of the Company to perform its obligations
under this Agreement; and to the best of the Company's knowledge, no
such proceedings that would reasonably be expected to have a Material
Adverse Effect are threatened or contemplated by governmental
authorities or threatened by others.
(o) Neither the Company nor any of its subsidiaries (i) is in violation
of its charter or by-laws, (ii) is in default in any respect, and no
event has occurred which, with notice or lapse of time or both, would
constitute such a default, in the due performance or observance of any
term, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement or
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other agreement or instrument to which it is a party or by which it is
bound or to which any of its property or assets is subject or (iii) is
in violation in any respect of any law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be
subject, except, in the case of clauses (ii) and (iii), any violations
or defaults which, singularly or in the aggregate, would not have a
Material Adverse Effect.
(p) Except as described in the Prospectus, the Company and each of its
subsidiaries possesses such permits, licenses, approvals, consents and
other authorizations (including, licenses, pharmacy licenses,
accreditation and other similar documentation or approvals of any local
health departments) (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies, including, without limitation, the Food and Drug Administration
("FDA"), necessary to conduct its business as described in the
Prospectus; the Company is in compliance with the terms and conditions
of all such Governmental Licenses and all applicable FDA rules and
regulations, guidelines and policies, except where the failure so to
comply would not reasonably be expected to, singly or in the aggregate,
result in a Material Adverse Effect; all of the Governmental Licenses
are valid and in full force and effect, except where the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses
to be in full force and effect would not reasonably be expected to
result in a Material Adverse Effect; and the Company has not received
any notice of proceedings relating to the revocation or modification of
any such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would reasonably
be expected to result in a Material Adverse Effect.
(q) The Company is not, and after giving effect to the offering of the
Stock and the application of the proceeds thereof as described in the
Prospectus, will not become an "investment company" within the meaning
of the Investment Company Act of 1940, as amended and the rules and
regulations of the Commission thereunder.
(r) Neither the Company nor, to the Company's knowledge, any of its
officers, directors or affiliates, has taken, directly or indirectly,
any action designed or intended to stabilize or manipulate the price of
any security of the Company, or which caused or resulted in, or which
would in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the
Company.
(s) To the knowledge of the Company, the Company and its subsidiaries
own or possess the right to use all patents, trademarks, trademark
registrations, service marks, service xxxx registrations, trade names,
copyrights, licenses, inventions, trade secrets and rights described in
the Prospectus as being owned by them for the conduct of their
respective businesses, and the Company is not aware of any claim to the
contrary or any challenge by any other person to the rights of the
Company and its subsidiaries with respect to the foregoing, that would
reasonably be expected to result in a Material Adverse Effect. Except as
described in the Prospectus, the Company does not believe that it or any
of its subsidiaries infringes any valid patents, trademarks, service
marks, trade names, copyrights, trade secrets, licenses or other
intellectual property or franchise right of any other person known to
the Company which would reasonably be expected to have a Material
Adverse Effect (it being understood that the Company is not representing
that no person will make a claim against the Company or its subsidiaries
alleging the infringement by the Company or its subsidiaries of any
patent, trademark, service xxxx, trade name, copyright, trade secret,
license or other intellectual property or franchise right or as to the
outcome of any claim that may be made). Except as described in the
Prospectus, to the knowledge of the Company, no claim has been made
against the Company alleging the
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infringement by the Company of any patent, trademark, service xxxx,
trade name, copyright, trade secret, license in or other intellectual
property right or franchise right of any person.
(t) The Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use,
all items of real or personal property which are material to the
business of the Company and its subsidiaries taken as a whole, in each
case free and clear of all liens, encumbrances, claims and defects,
except such as are described in the Prospectus or such as do not
materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property by
the Company and its subsidiaries.
(u) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is
imminent which would reasonably be expected to have a Material Adverse
Effect. The Company is not aware that any employee or significant group
of employees of the Company or any subsidiary plans to terminate
employment with the Company or any such subsidiary, which termination
would reasonably be expected to have a Material Adverse Effect.
(v) There has been no storage, generation, transportation, handling,
treatment, disposal, discharge, emission, or other release of any kind
of toxic or other wastes or other hazardous substances by, due to, or
caused by the Company or any of its subsidiaries (or, to the Company's
knowledge, any other entity for whose acts or omissions the Company or
any of its subsidiaries is or would be liable) upon any of the property
now or previously owned or leased by the Company or any of its
subsidiaries, or upon any other property, in violation of any statute or
any ordinance, rule, regulation, order, judgment, decree or permit or
which would, under any statute or any ordinance, rule (including rule of
common law), regulation, order, judgment, decree or permit, give rise to
any liability, except for any violation or liability which would not
have, singularly or in the aggregate with all such violations and
liabilities, a Material Adverse Effect; there has been no disposal,
discharge, emission or other release of any kind onto any of the
property now or previously owned or leased by the Company or any of its
subsidiaries or into the environment surrounding such property of any
toxic or other wastes or other hazardous substances with respect to
which the Company or any of its subsidiaries have knowledge, except for
any such disposal, discharge, emission, or other release of any kind
which would not have, singularly or in the aggregate with all such
discharges and other releases, a Material Adverse Effect.
(w) The Company and its subsidiaries each (i) have filed all federal,
state and foreign income and franchise tax returns required to be filed,
(ii) have paid all federal state, local and foreign taxes due and
payable for which it is liable (other than matters, if any, which the
Company is contesting in good faith), and (iii) do not have any tax
deficiency or claims outstanding or assessed or, to the Company's
knowledge, proposed against it which would reasonably be expected to
have a Material Adverse Effect.
(x) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is customary for
companies engaged in similar businesses in similar industries with
products in a similar stage of development.
(y) There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or to be filed as an exhibit to the
Registration Statements which is not described or filed therein as
required; and all descriptions of any such franchises, leases,
contracts, agreements or documents contained in the
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Registration Statements are accurate and complete descriptions of such
documents in all material respects.
(z) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers or 5% stockholders
of the Company on the other hand, which is required to be described in
the Prospectus and which is not so described.
(aa) No person or entity has the right to require registration of shares
of Common Stock or other securities of the Company because of the filing
or effectiveness of the Registration Statement, except for persons and
entities who have expressly waived such right or who have been given
proper notice and have failed to exercise such right within the time or
times required under the terms and conditions of such right.
(bb) Neither the Company nor any of its subsidiaries own any "margin
securities" as that term is defined in Regulations G and U of the Board
of Governors of the Federal Reserve System (the "Federal Reserve
Board"), and none of the proceeds of the sale of the Stock will be used,
directly or indirectly, for the purpose of purchasing or carrying any
margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Company's securities to be considered a "purpose credit" within the
meanings of Regulation G, T, U or X of the Federal Reserve Board.
(cc) Neither the Company nor any of its subsidiaries is a party to any
contract, agreement or understanding with any person that would give
rise to a valid claim against the Company or the Underwriters for a
brokerage commission, finder's fee or like payment in connection with
the offering and sale of the Stock.
(dd) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in the
Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(ee) The Company is subject to and in compliance with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act. The
Common Stock is registered pursuant to Section 12(b) of the Exchange Act
and is listed on the Nasdaq Stock Market's 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 delisting the Common Stock from the Nasdaq National Market, nor
has the Company received any notification that the Commission of the
Nasdaq National Market is contemplating terminating such registration or
listing.
(ff) To the knowledge of the Company, the human clinical trials
conducted by the Company or in which the Company has participated that
are described in, or incorporated by reference into, the Prospectus, or
the results of which are referred to in, or incorporated by reference
into, the Prospectus were and, if still pending, are being, conducted in
accordance with experimental protocols, procedures and controls pursuant
to accepted professional scientific standards; the descriptions of the
results of such studies, tests and trials contained in, or incorporated
by reference into, the Prospectus are accurate in all material respects.
The Company has not received any notices or correspondence from the FDA
or any other governmental agency requiring the termination or suspension
of any clinical trials conducted by, or on behalf of, the Company or in
which the Company has participated that are described in, or
incorporated by
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reference into, the Prospectus or the results of which are referred to
in, or incorporated by reference into, the Prospectus.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company that number of shares of Firm Stock (rounded up or down, as
determined by XX Xxxxx in its discretion, in order to avoid fractions) obtained
by multiplying 3,100,000 shares of Firm Stock by a fraction the numerator of
which is the number of shares of Firm Stock set forth opposite the name of such
Underwriter in Schedule A hereto and the denominator of which is the total
number of shares of Firm Stock.
The purchase price per share to be paid by the Underwriters to the
Company for the Stock will be $27.075 per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representative for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representative may direct by notice in writing to the Company given at or prior
to 12:00 Noon, New York time, on the second full business day preceding the
First Closing Date (as defined below) against payment of the aggregate Purchase
Price therefor by wire transfer to an account at a bank acceptable to XX Xxxxx,
payable to the order of the Company, all at the offices of Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxxx, XX 00000. Time shall be of the essence,
and delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligations of each Underwriter hereunder. The time and
date of the delivery and closing shall be at 10:00 A.M., New York time, on June
29, 2001, in accordance with Rule 15c6-1 of the Exchange Act. The time and date
of such payment and delivery are herein referred to as the "First Closing Date".
The First Closing Date and the location of delivery of, and the form of payment
for, the Firm Stock may be varied by agreement between the Company and XX Xxxxx.
The Company shall make the certificates for the Stock available to the
Representative for examination on behalf of the Underwriters in New York, New
York at least twenty-four hours prior to the First Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or less than all of the Optional Stock. The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
Company agrees to sell to the Underwriters the number of shares of Optional
Stock specified in the written notice by XX Xxxxx described below and the
Underwriters agree, severally and not jointly, to purchase such shares of
Optional Stock. Such shares of Optional Stock shall be purchased from the
Company and for the account of each Underwriter in the same proportion as the
number of shares of Firm Stock set forth opposite such Underwriter's name bears
to the total number of shares of Firm Stock (subject to adjustment by XX Xxxxx
to eliminate fractions). The option granted hereby may be exercised as to all or
any part of the Optional Stock at any time, and from time to time, not more than
thirty (30) days subsequent to the date of this Agreement. No Optional Stock
shall be sold and delivered unless the Firm Stock previously has been, or
simultaneously is, sold and delivered. The right to purchase the Optional Stock
or any portion thereof may be surrendered and terminated at any time upon notice
by XX Xxxxx to the Company.
The option granted hereby may be exercised by written notice being given
to the Company by XX Xxxxx setting forth the number of shares of the Optional
Stock to be purchased by the Underwriters and
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the date and time for delivery of and payment for the Optional Stock. Each date
and time for delivery of and payment for the Optional Stock (which may be the
First Closing Date, but not earlier) is herein called the "Option Closing Date"
and shall in no event be earlier than two (2) business days nor later than five
(5) business days after written notice is given. (The Option Closing Date and
the First Closing Date are herein called the "Closing Dates".)
The Company will deliver the Optional Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representative may direct by notice in writing to the Company given at or
prior to 12:00 Noon, New York time, on the second full business day preceding
the Option Closing Date against payment of the aggregate Purchase Price therefor
in federal (same day) funds by certified or official bank check or checks or
wire transfer to an account at a bank acceptable to XX Xxxxx payable to the
order of the Company, all at the offices of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, 000
Xxxx Xxxxxx, Xxxxxx, XX 00000. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligations of each Underwriter hereunder. The Company shall make the
certificates for the Optional Stock available to the Representative for
examination on behalf of the Underwriters in New York, New York not later than
10:00 A.M., New York Time, on the business day preceding the Option Closing
Date. The Option Closing Date and the location of delivery of, and the form of
payment for, the Optional Stock may be varied by agreement between the Company
and XX Xxxxx.
The several Underwriters propose to offer the Stock for sale upon the
terms and conditions set forth in the Prospectus.
(4) FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters that:
(a) The Company will prepare the Rule 462(b) Registration Statement, if
necessary, in a form approved by the Representative and file such Rule
462(b) Registration Statement with the Commission on the date hereof;
prepare the Prospectus in a form approved by the Representative and file
such Prospectus pursuant to Rule 424(b) under the Securities Act not
later than the second business day following the execution and delivery
of this Agreement; make no further amendment or any supplement to the
Registration Statements or to the Prospectus prior to the Option Closing
Date to which the Representative shall reasonably object by notice to
the Company after a reasonable period to review; advise the
Representative, promptly after it receives notice thereof, of the time
when any amendment to either Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representative with copies
thereof; file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Stock; advise the Representative, promptly after it receives
notice thereof, of the issuance by the Commission of any stop order or
of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus, of the suspension of the qualification of
the Stock for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by
the Commission for the amending or supplementing of the Registration
Statements or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, use promptly its best efforts to
obtain its withdrawal.
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(b) If at any time prior to the expiration of nine months after the
effective date of the Initial Registration Statement when a prospectus
relating to the Stock is required to be delivered any event occurs as a
result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact, or omit to state any
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus to
comply with the Securities Act or the Exchange Act, the Company will
promptly notify the Representative thereof and upon their request will
prepare an amended or supplemented Prospectus or make an appropriate
filing pursuant to Section 13 or 14 of the Exchange Act which will
correct such statement or omission or effect such compliance. The
Company will furnish without charge to each Underwriter and to any
dealer in securities as many copies as the Representative may from time
to time reasonably request of such amended or supplemented Prospectus;
and in case any Underwriter is required to deliver a prospectus relating
to the Stock nine months or more after the effective date of the Initial
Registration Statement, the Company upon the request of the
Representative and at the expense of such Underwriter will prepare
promptly an amended or supplemented Prospectus as may be necessary to
permit compliance with the requirements of Section 10(a)(3) of the
Securities Act.
(c) The Company will furnish promptly to the Representative and to
counsel for the Underwriters a signed copy of each of the Registration
Statements as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith.
(d) The Company will deliver promptly to the Representative in New York
City such number of the following documents as the Representative shall
reasonably request: (i) conformed copies of the Registration Statements
as originally filed with the Commission and each amendment thereto (in
each case excluding exhibits), (ii) each Preliminary Prospectus, (iii)
the Prospectus (not later than 10:00 A.M., New York time, of the
business day following the execution and delivery of this Agreement) and
any amended or supplemented Prospectus (not later than 10:00 A.M., New
York City time, on the business day following the date of such amendment
or supplement) and (iv) any document incorporated by reference in the
Prospectus (excluding exhibits thereto).
(e) The Company will make generally available to its stockholders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Securities Act), an earnings statement of the
Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(f) The Company will promptly take from time to time such actions as the
Representative may reasonably request to qualify the Stock for offering
and sale under the securities or Blue Sky laws of such jurisdictions as
the Representative may designate and to continue such qualifications in
effect for so long as required for the distribution of the Stock;
provided that the Company and its subsidiaries shall not be obligated to
qualify as foreign corporations in any jurisdiction in which they are
not so qualified or to file a general consent to service of process in
any jurisdiction;
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(g) During the period of five years from the date hereof, the Company
will deliver to the Representative and, upon request, to each of the
other Underwriters, (i) as soon as they are available, copies of all
reports or other communications furnished to stockholders and (ii) as
soon as they are available, copies of any reports and financial
statements furnished or filed by the Company with the Commission
pursuant to the Exchange Act or any national securities exchange or
automatic quotation system on which the Stock is listed or quoted, in
each case other than such documents as are available on the internet.
(h) The Company will not directly or indirectly offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of any shares
of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock for a period of 90 days from the date of
the Prospectus without the prior written consent of XX Xxxxx other than:
(i) the Company's sale of the Stock hereunder and the issuance of shares
pursuant to employee benefit plans, qualified stock option plans or
other employee compensation plans existing on the date hereof or
pursuant to currently outstanding options or warrants, or rights
pursuant to The Rights Agreement dated December 13, 2000 by and between
the Company and Equiserve Trust Company, N.A. or upon the conversion or
exchange of convertible or exchangeable securities outstanding on the
date hereof, or (ii) the issuance by the Company of shares of Common
Stock as consideration for mergers, acquisitions, other business
combinations, or strategic alliances, occurring after the date of this
Agreement, provided that each recipient of shares pursuant to this
clause (ii) agrees that all such shares remain subject to restrictions
substantially similar to those contained in this subsection. The Company
will cause each executive officer and director of the Company to furnish
to the Representative, prior to the Closing Date, a letter,
substantially in the form of Exhibit I hereto, containing so-called
lock-up provisions.
(i) The Company will supply the Representative with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(j) Prior to each of the Closing Dates, the Company will furnish to the
Representative, as soon as they have been prepared, copies of any
unaudited interim consolidated financial statements of the Company for
any monthly periods subsequent to the periods covered by the financial
statements appearing in the Registration Statement and the Prospectus.
(k) Prior to the First Closing Date, the Company will not issue any
press release or other communication directly or indirectly or hold any
press conference with respect to the Company, its condition, financial
or otherwise, or earnings, business affairs or business prospects
(except for routine oral marketing communications in the ordinary course
of business and consistent with the past practices of the Company and of
which the Representative is notified), without the prior written consent
of the Representative, unless in the judgment of the Company and its
counsel, and after notification to the Representative, such press
release or communication is required by law.
(l) In connection with the offering of the Stock, until XX Xxxxx shall
have notified the Company of the completion of the resale of the Stock,
the Company will not, and will use its best efforts to cause its
affiliated purchasers (as defined in Regulation M under the Exchange
Act) not to, either alone or with one or more other persons, bid for or
purchase, for any account in which it or any of its affiliated
purchasers has a beneficial interest, any Stock, or attempt to induce
any person to purchase any Stock, except in compliance with Regulation
M; and not to, and to cause
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its affiliated purchasers not to, make bids or purchase for the purpose
of creating actual, or apparent, active trading in or of raising the
price of the Stock.
(m) The Company will apply the net proceeds from the sale of the Stock
as set forth in the Prospectus under the heading "Use of Proceeds".
5. PAYMENT OF EXPENSES. The Company agrees with the Underwriter to pay (a) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Stock and any taxes payable in that connection; (b) the costs incident to
the Registration of the Stock under the Securities Act; (c) the costs incident
to the preparation, printing and distribution of the Registration Statement,
Preliminary Prospectus, Prospectus any amendments and exhibits thereto or any
document incorporated by reference therein the costs of printing, reproducing
and distributing the "Agreement Among Underwriters" between the Representative
and the Underwriters, the Master Selected Dealers' Agreement, the Underwriters'
Questionnaire and this Agreement by mail, telex or other means of
communications; (d) the fees and expenses (including related fees and expenses
of counsel for the Underwriters) incurred in connection with filings made with
the National Association of Securities Dealers; (e) any applicable listing or
other fees; (f) the fees and expenses of qualifying the Stock under the
securities laws of the several jurisdictions as provided in Section 4(f) and of
preparing, printing and distributing Blue Sky Memoranda and Legal Investment
Surveys (including related fees and expenses of counsel to the Underwriters);
(g) all fees and expenses of the registrar and transfer agent of the Stock; and
(h) all other costs and expenses incident to the performance of the obligations
of the Company under this Agreement (including, without limitation, the fees and
expenses of the Company's counsel and the Company's independent accountants);
provided that, except as otherwise provided in this Section 5 and in Section 9,
the Underwriters shall pay their own costs and expenses, including the fees and
expenses of their counsel, any transfer taxes on the Stock which they may sell
and the expenses of advertising any offering of the Stock made by the
Underwriters.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of the
several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of their obligations hereunder, and to each of the following additional
terms and conditions:
(a) No stop order suspending the effectiveness of either the
Registration Statements shall have been issued and no proceedings for
that purpose shall have been initiated or threatened by the Commission,
and any request for additional information on the part of the Commission
(to be included in the Registration Statements or the Prospectus or
otherwise) shall have been complied with to the reasonable satisfaction
of the Representative. The Rule 462(b) Registration Statement, if any,
and the Prospectus shall have been timely filed with the Commission in
accordance with Section 4(a).
(b) None of the Underwriters shall have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an
untrue statement of a fact which, in the written opinion of counsel for
the Underwriters, is material or omits to state any fact which, in the
written opinion of such counsel, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of each of this Agreement, the Stock,
the Registration Statement and the Prospectus and
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all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material
respects to counsel for the Underwriters, and the Company shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Xxxx and Xxxx LLP shall have furnished to the Representative such
counsel's written opinion, as counsel to the Company, addressed to the
Underwriters and dated the Closing Date, in form and substance
reasonably satisfactory to the Representative, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the
laws of the State of Delaware. The Company is duly
qualified to do business and is in good standing as a
foreign corporation in the Commonwealth of
Massachusetts, and has all corporate power and
authority necessary to own or hold its properties and
to conduct the business in which it is engaged.
(ii) The Company's authorized capital stock consists of
10,000,000 shares of Preferred Stock, of which 10,000
shares have been designated as Series A Convertible
Preferred Stock, and 1,000,000 shares have been
designated as Series B Junior Participating Preferred
Stock, and 100,000,000 shares of Common Stock, and
all of the issued and outstanding shares of capital
stock of the Company have been duly and validly
authorized and issued, are fully paid and
non-assessable and conform, in all material respects,
to the description thereof contained in the
Prospectus.
(iii) The Stock has been duly and validly
issued and, when issued and delivered to the
Underwriters against payment therefor as provided in
this Agreement, will be validly issued, fully paid
and non-assessable.
(iv) There are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock
pursuant to the Company's charter or by-laws or any
Material Contract (as defined below).
(v) This Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The execution and delivery of this Agreement by the
Company and the consummation by the Company of the
transactions contemplated hereby will not conflict
with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under
any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument (a
"Material Contract") to which the Company or any of
its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any
of the properties or assets of the Company or any of
its subsidiaries is subject, which has been filed as
an exhibit to the Registration Statement or as an
exhibit to any report filed under the Exchange Act
that has been incorporated by reference in the
Prospectus, nor will such actions result in any
violation of the Charter or by-laws of the Company or
of any of its United States subsidiaries or any
Federal or Massachusetts statute, rule or regulation,
or any order known to such counsel of any court or
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governmental agency or body or court having
jurisdiction over the Company or any of its
subsidiaries or any of their properties.
(vii) Except for the registration of the Stock under the
Securities Act and such consents, approvals,
authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable
state securities laws in connection with the purchase
and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or
filing or registration with, any court or any Federal
or Massachusetts governmental agency or body is
required for the execution and delivery of this
Agreement by the Company and the consummation of the
transactions contemplated hereby.
(viii) The statements in the Prospectus under the heading
"Description of Common and Preferred Stock" and "Plan
of Distribution" in so far as they constitute
summaries of matters of law or regulation or legal
conclusions, have been reviewed by such counsel and
are accurate in all material respects.
(ix) To such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Company
or any of its subsidiaries are a party or any such
proceedings known to such counsel which are
threatened or contemplated against the Company or any
of its subsidiaries that are required to be described
in the Registration Statement or Prospectus which are
not described as required, and, to such counsel's
knowledge, there are no contracts or other documents
that are required to be filed as exhibits to the
Registration Statement which are not filed as
required.
(x) The Registration Statement was declared effective
under the Securities Act as of the date and time
specified in such opinion, the Rule 462(b)
Registration Statement, if any, was filed with the
Commission on the date specified therein, the
Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date
specified therein and, to such counsel's knowledge,
no stop order suspending the effectiveness of the
Registration Statement has been issued and no
proceeding for that purpose is pending or threatened
by the Commission.
(xi) The Registration Statements, as of the respective
effective dates and the Prospectus, as of its date,
and any further amendments or supplements thereto, as
of their respective dates, made by the Company prior
to the Closing Date (other than the financial
statements and other financial data, including notes
and schedules, contained therein, as to which such
counsel need express no opinion) complied as to form
in all material respects with the requirements of the
Securities Act and the Rules and Regulations; and the
documents incorporated by reference in the Prospectus
and any further amendment or supplement to any such
incorporated document made by the Company prior to
the Closing Date (other than the financial statements
and related schedules therein, as to which such
counsel need express no opinion), when they became
effective or were filed with the Commission, as the
case may be, complied as to form in all material
respects with the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder.
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(xii) To such counsel's knowledge, no person or entity has
the right to require registration of shares of Common
Stock or other securities of the Company because of
the filing or effectiveness of the Registration
Statements, except for persons and entities who have
expressly waived such right or who have been given
proper notice and have failed to exercise such right
within the time or times required under the terms and
conditions of such right.
(xiii) The Company is not an "investment company" within the
meaning of the Investment Company Act and the rules
and regulations of the Commission thereunder.
Such counsel shall also state, without passing upon or assuming
any responsibility for the accuracy or completeness of the statements
contained in any of the following documents that nothing has come to
their attention that has led them to believe (a) that, as of the
effective date of the Registration Statement, the Registration Statement
(or as of its date, any amendment or supplement thereto made by the
Company prior to the date of such opinion) contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading or (b) that, as of its date, the Prospectus as
amended or supplemented or any further amendment or supplement thereto
made by the Company prior to the Closing Date contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading or (c) that, as of the Closing Date, the
Registration Statement as amended contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or
(d) that, as of the Closing Date, the Prospectus as amended or
supplemented contained any untrue statement of a material fact or
omitted 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.
Notwithstanding the foregoing, such counsel need express no belief as to
(a) the financial statements, including the notes and schedules thereto,
or any financial data set forth or referred to in the Registration
Statement or the Prospectus as amended or supplemented, (b) any matters
arising under the published rules, regulations and policies of the U.S.
Food and Drug Administration or any other federal statute or regulation
governing the provision of drug administration, and (c) any matters
arising under state statues and regulations governing the provision of
drug administration. We note with respect to the foregoing statement
that we do not serve as the Company's patent or regulatory counsel.
(e) Intellectual property counsel and regulatory counsel shall have
furnished to the Representative such counsels' written opinions, as
counsels to the Company, addressed to the Underwriters and dated the
Closing Date, in form and substance reasonably satisfactory to the
Representative, to such effect as the Underwriters have previously
specified to the Company
(f) The Representative shall have received from Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to such matters as the Underwriters
may reasonably require, and the Company shall have furnished to such
counsel such documents as they request for enabling them to pass upon
such matters.
(g) At the time of the execution of this Agreement, the Representative
shall have received from Ernst & Young LLP a letter, addressed to the
Underwriters and dated such date, in form and substance satisfactory to
the Representative (i) confirming that they are independent certified
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public accountants with respect to the Company and its subsidiaries
within the meaning of the Securities Act and the Rules and Regulations
and (ii) stating the conclusions and findings of such firm with respect
to the financial statements and certain financial information contained
or incorporated by reference in the Prospectus.
(h) On the Closing Date, the Representative shall have received a letter
(the "bring-down letter") from Ernst & Young LLP addressed to the
Underwriters and dated the Closing Date confirming, as of the date of
the bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus as of a date not more than three
business days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by its letter delivered to the
Representative concurrently with the execution of this Agreement
pursuant to Section 6(g).
(i) The Company shall have furnished to the Representative a
certificate, dated the Closing Date, of its chief financial officer
stating that he has carefully examined the Registration Statement and
certifying on behalf of the Company that (i) the Registration Statements
as of their respective effective dates and the Prospectus, as of each
date thereof, did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) since
the effective date of the Initial Registration Statement no event has
occurred which should have been set forth in a supplement or amendment
to the Registration Statements or the Prospectus, (iii) as of the
Closing Date, the representations and warranties of the Company in this
Agreement are true and correct and the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and (iv) subsequent
to the date of the most recent financial statements included or
incorporated by reference in the Prospectus, there has been no material
adverse change in the financial position or results of operations of the
Company and its subsidiaries, or any change, or any development
including a prospective change, in or affecting the condition (financial
or otherwise), results of operations, business or prospects of the
Company and its subsidiaries taken as a whole, except as set forth in
the Prospectus.
(j) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute
or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and (ii) since such date there
shall not have been any change in the capital stock (other than stock
option grants and any exercises of stock options) or long-term debt of
the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the business, general
affairs, management, financial position, stockholders' equity or results
of operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of the
Representative, so material and adverse as to make it impracticable or
inadvisable to proceed with the sale or delivery of the Stock on the
terms and in the manner contemplated in the Prospectus.
(k) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance
or sale of the Stock; and no injunction, restraining order or order of
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any other nature by any federal or state court of competent jurisdiction
shall have been issued as of the Closing Date which would prevent the
issuance or sale of the Stock.
(l) Subsequent to the execution and delivery of this Agreement (i) no
downgrading shall have occurred in the rating accorded the Company's
debt securities by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes of
Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under
surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of any of the
Company's debt securities.
(m) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange
or in the over-the-counter market, or trading in any securities of the
Company on any exchange or in the over-the-counter market, shall have
been suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any
other regulatory body or governmental authority having jurisdiction,
(ii) a banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States or (iv) there shall have
occurred such a material adverse change in general economic, political
or financial conditions (or the effect of international conditions on
the financial markets in the United States shall be such) as to make it,
in the judgment of the Representative, impracticable or inadvisable to
proceed with the sale or delivery of the Stock on the terms and in the
manner contemplated in the Prospectus.
(n) The National Market System shall have approved the Stock for
quotation, subject only to official notice of issuance.
(o) XX Xxxxx shall have received the written agreements, substantially
in the form of Exhibit I hereto, of the executive officers and directors
of the Company.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Underwriter, its
officers, employees, representative and agents and each person, if any,
who controls any Underwriter within the meaning of the Securities Act
(collectively the "Underwriter Indemnified Parties" and , each an
"Underwriter Indemnified Party") against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
that Underwriter Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Preliminary Prospectus, either of the Registration Statements or the
Prospectus or in any amendment or supplement thereto or (ii) the
omission or alleged omission to state in any Preliminary Prospectus,
either of the Registration Statements or the Prospectus or in any
amendment or supplement thereto a material fact required to be stated
therein or necessary to make the statements therein not misleading and
shall reimburse each Underwriter Indemnified
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Party promptly upon demand for any legal or other expenses reasonably
incurred by that Underwriter Indemnified Party in connection with
investigating or preparing to defend or defending against or appearing
as a third party witness in connection with any such loss, claim,
damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises
out of or is based upon an untrue statement or alleged untrue statement
in or omission or alleged omission from the Preliminary Prospectus,
either of the Registration Statements or the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company through the Representative by or
on behalf of any Underwriter specifically for use therein, which
information the parties hereto agree is limited to the Underwriter's
Information (as defined in Section 16). This indemnity agreement is not
exclusive and will be in addition to any liability which the Company
might otherwise have and shall not limit any rights or remedies which
may otherwise be available at law or in equity to each Underwriter
Indemnified Party.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless the Company its officers, employees, representative and
agents, each of its directors and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively the
"Company Indemnified Parties" and each a "Company Indemnified Party")
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company Indemnified Parties may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Prospectus, either of the Registration
Statements or the Prospectus or in any amendment or supplement thereto
or (ii) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written
information furnished to the Company through the Representative by or on
behalf of that Underwriter specifically for use therein, and shall
reimburse the Company Indemnified Parties for any legal or other
expenses reasonably incurred by such parties in connection with
investigating or preparing to defend or defending against or appearing
as third party witness in connection with any such loss, claim, damage,
liability or action as such expenses are incurred; provided that the
parties hereto hereby agree that such written information provided by
the Underwriters consists solely of the Underwriter's Information. This
indemnity agreement is not exclusive and will be in addition to any
liability which the Underwriters might otherwise have and shall not
limit any rights or remedies which may otherwise be available at law or
in equity to the Company Indemnified Parties.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced by
such failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If any
such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume
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the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim
or action, the indemnifying party shall not be liable to the
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense
thereof but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment thereof has
been specifically authorized by the indemnifying party in writing, (ii)
such indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying
party and in the reasonable judgment of such counsel it is advisable
for such indemnified party to employ separate counsel or (iii) the
indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party, in
which case, if such indemnified party notifies the indemnifying party
in writing that it elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right
to assume the defense of such action on behalf of such indemnified
party, it being understood, however, that the indemnifying party shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties, which firm
shall be designated in writing by XX Xxxxx, if the indemnified parties
under this Section 7 consist of any Underwriter Indemnified Party, or
by the Company if the indemnified parties under this Section 7 consist
of any Company Indemnified Parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 7(a) and
7(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. Subject
to the provisions of Section 7(e) below, no indemnifying party shall be
liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but
if settled with its written consent or if there be a final judgment for
the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under Section 7(a)
or 7(b), then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other from the offering of the
Stock or if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on
the other with respect to the statements or omissions which resulted in
such loss, claim, damage or liability, or action in respect thereof, as
well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on
the other with respect to such offering shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses) received by
the Company bear to the total underwriting discounts and commissions
received by the Underwriters with respect to the Stock purchased under
this Agreement, in each case as set forth in the table on the cover page
of the Prospectus. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or
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alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the Underwriters on the
other, the intent of the parties and their relative knowledge, access
to information and opportunity to correct or prevent such untrue
statement or omission; provided that the parties hereto agree that the
written information furnished to the Company through the Representative
by or on behalf of the Underwriters for use in any Preliminary
Prospectus, either of the Registration Statements or the Prospectus
consists solely of the Underwriter's Information. The Company and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 7(d) were to be determined by
pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which
does not take into account the equitable considerations referred to
herein. The amount paid or payable by an indemnified party as a result
of the loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 7(d) shall be deemed to include, for
purposes of this Section 7(d), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of
this Section 7(d), no Underwriter shall be required to contribute any
amount in excess of the amount by which the total price at which the
Stock underwritten by it and distributed to the public were offered to
the public less the amount of any damages which such Underwriter has
otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. 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 Underwriters' obligations to contribute as provided in this Section
7(e) are several in proportion to their respective underwriting obligations and
not joint.
8. TERMINATION. The obligations of the Underwriters hereunder may be terminated
by XX Xxxxx, in its absolute discretion by notice given to and received by the
Company prior to delivery of and payment for the Stock if, prior to that time,
any of the events described in Sections 6(i), 6(k) or 6(m) have occurred or if
the Underwriters shall decline to purchase the Stock for any reason permitted
under this Agreement.
9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) this Agreement shall have
been terminated pursuant to Section 8 or 10, (b) the Company shall fail to
tender the Stock for delivery to the Underwriters for any reason permitted under
this Agreement, or (c) the Underwriters shall decline to purchase the Stock for
any reason permitted under this Agreement the Company shall reimburse the
Underwriters for the fees and expenses of their counsel and for such other
out-of-pocket expenses as shall have been reasonably incurred by them in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company shall pay the full amount thereof to the XX Xxxxx. If this
Agreement is terminated pursuant to Section 10 by reason of the default of one
or more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
10. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the
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Representative and the Company for the purchase of such shares by other persons
are not made within forty-eight (48) hours after such default, this Agreement
shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 10, (i) the Company
shall have the right to postpone the Closing Dates for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 10 shall be without liability on the part of
any non-defaulting Underwriter or the Company, except expenses to be paid or
reimbursed pursuant to Sections 5 and 9 and except the provisions of Section 7
shall not terminate and shall remain in effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the several Underwriters, the
Company and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Underwriter Indemnified Parties, and the
indemnities of the several Underwriters shall also be for the benefit of the
Company Indemnified Parties.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the several Underwriters, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter, the Company or any person controlling any of them and shall
survive delivery of and payment for the Stock.
13. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to SG Securities Corporation Attention: Xxxxx
Xxxxxxxx;
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Transkaryotic Therapies, Inc. Attention:
Xxxxxx X. Xxxxxxx, Chief Financial Officer.
Any such statements, requests, notices and agreements shall take effect
at the time of receipt.
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a) "business
day" means any day on which the New York Stock Exchange, Inc. is open for
trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the Rules
and Regulations.
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15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. UNDERWRITERS' INFORMATION. The parties hereto acknowledge and agree that,
for all purposes of this Agreement, the Underwriters' Information consists
solely of the following information in the Prospectus: the statements concerning
the Underwriters contained in the third paragraph under the table in the section
called "Underwriting."
17. AUTHORITY OF THE REPRESENTATIVE. In connection with this Agreement, you will
act for and on behalf of the several Underwriters, and any action taken under
this Agreement by the Representative, will be binding on all the Underwriters.
18. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
19. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Representative.
20. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
[Signatures on next page.]
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If the foregoing is in accordance with your understanding of the
agreement between the Company and XX Xxxxx, kindly indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
TRANSKARYOTIC THERAPIES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President,
Finance and Chief Financial Officer
Accepted as of the date first above written:
XX XXXXX SECURITIES CORPORATION
By: /s/ Xxxx Xxxxxx
------------------------------
Name: Xxxx Xxxxxx
Title: Managing Director
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SCHEDULE A
Number of Firm Shares Number of Optional
Name to be Purchased Shares to be Purchased
XX Xxxxx Securities Corporation 3,100,000 465,000