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PLACEMENT AGREEMENT
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July , 199
PACIFIC GROWTH EQUITIES
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Ladies and Gentlemen:
SECTION
1. Introductory. Transkaryotic Therapies, Inc., a Delaware corporation (the
"Company"), hereby engages Pacific Growth Equities (the "Agent") upon the terms
and conditions set forth herein, as the Company's agent in connection with the
proposed offering to the entities identified on Exhibit A of the number of
shares set forth opposite such entity's name on Exhibit A (the "Placement
Shares") of the Company's authorized but unissued common stock, $0.01 par value
("Common Stock").
SECTION 2. Representations and Warranties of the Company. The
Company hereby represents and warrants to the Agent that:
(a) A registration statement on Form S-1 (File No. ) as to
shares of Common Stock (the "Shares"), including the Placement Shares, has been
prepared by the Company in conformity with the requirements of the Securities
Act of 1933, as amended (the "Act"), and the rules and regulations (the "Rules
and Regulations") of the Securities and Exchange Commission (the "Commission")
thereunder, and has been filed with the Commission. The Company meets the
necessary requirements for filing on Form S-1. The Company has prepared and has
filed or proposes to file prior to the effective date of such registration
statement an amendment or amendments to such registration statement, which
amendment or amendments have been or will be similarly prepared. There have been
delivered to you two signed copies of such registration statement and
amendments, together with two copies of each exhibit filed therewith. The
Company will next file with the Commission one of the following: (i) prior to
effectiveness of such registration statement, a further amendment thereto,
including the form of final prospectus, or (ii) a final prospectus in accordance
with Rules 430A and 424(b) of the Rules and Regulations. As filed, the final
prospectus, such amendment and form of final prospectus, or such final
prospectus, shall include all Rule 430A Information (as hereinafter defined)
and, except to the extent that you shall agree in writing to a modification,
shall be in all substantive respects in the form furnished to you prior to the
date and time that this Agreement was executed and delivered by the parties
hereto, or, to the extent not completed at such date and time, shall contain
only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus (as hereinafter defined)) as the
Company shall have previously advised you in writing would be included or made
therein.
The term "Registration Statement" as used in this Agreement shall
mean the registration statement referred to in the preceding paragraph at the
time such registration statement becomes effective and, in the event any
post-effective amendment thereto becomes effective prior to the Closing Date (as
hereinafter defined), shall also mean such registration statement as so amended;
provided, however, that such term shall also include (i) all Rule 430A
Information deemed to be included in such
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registration statement at the time such registration statement becomes effective
as provided by Rule 430A of the Rules and Regulations, and (ii) a registration
statement, if any, filed pursuant to Rule 462(b) of the Rules and Regulations
relating to the Shares. The term "Preliminary Prospectus" shall mean any
preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement at the time it
becomes effective that omits Rule 430A Information. The term "Prospectus" as
used in this Agreement shall mean either (i) the prospectus relating to the
Shares in the form in which it is first filed with the Commission pursuant to
Rule 424(b) of the Rules and Regulations or, (ii) no filing pursuant to Rule
424(b) of the Rules and Regulations is required, the form of final prospectus
included in the Registration Statement at the time such registration statement
becomes effective. The term "Rule 430A Information" means information with
respect to the Shares and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A of the
Rules and Regulations.
(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus has conformed in all material respects to the requirements of the Act
and the Rules and Regulations and, as of its date, has not included any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading; and at the time the Registration Statement becomes
effective, and at all times subsequent thereto up to and including the Closing
Date, the Registration Statement and the Prospectus, and any amendments or
supplements thereto, will contain all material statements and information
required to be included therein by the Act and the Rules and Regulations and
will in all material respects conform to the requirements of the Act and the
Rules and Regulations, and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto, will include any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading;
provided, however, no representation or warranty contained in this subsection
2(b) shall be applicable to information contained in or omitted from any
Preliminary Prospectus, the Registration Statement, the Prospectus or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Agent, specifically
for use in the preparation thereof. The documents incorporated by reference in
the Prospectus, when they were filed with the Commission, conformed in all
material respects to the requirements of the Securities Exchange Act of 1934
("Exchange Act") and the rules and regulations of the Commission thereunder, and
none of such documents contained an 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.
(c) The Company does not own or control, directly or
indirectly, any corporation, association or other entity. The Company has been
duly incorporated and is validly existing under the laws of the State of
Delaware. The Company has full power and authority (corporate and other) to own
and lease its properties and conduct its business as described in the
Prospectus; except as disclosed in the Prospectus, the Company is in possession
of and operating in compliance with all authorizations, licenses, permits,
consents, certificates and orders material to the conduct of its business (as
such business is currently conducted), all of which are valid and in full force
and effect; the Company is duly qualified to do business and in good standing as
foreign corporations in each jurisdiction in which the ownership or leasing of
properties or the conduct of its business requires such qualification, except
for jurisdictions in which the failure to so qualify would not have a material
adverse effect upon the Company; 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.
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(d) The Company has an authorized and issued share capital as
set forth in the Prospectus; the issued and outstanding shares of Common Stock
have been duly authorized and validly issued, are fully paid, have been issued
in compliance with all federal and state securities laws, were not issued in
violation of or subject to any preemptive rights or other rights to subscribe
for or purchase securities, and conform to the description thereof incorporated
in the Prospectus. Except as disclosed in the Prospectus and the financial
statements of the Company, and the related notes thereto, included in or
incorporated into the Prospectus, the Company does not have outstanding any
options to purchase, or any preemptive rights or other rights to subscribe for
or to purchase, any securities or obligations convertible into, or any contracts
or commitments to issue or sell, shares of its capital stock or any such
options, rights, convertible securities or obligations. The description of the
Company's stock option, stock bonus and other stock schemes, plans or
arrangements, and the options or other rights granted and exercised thereunder,
incorporated into the Prospectus accurately and fairly presents the information
required to be shown with respect to such schemes, plans, arrangements, options
and rights. The Common Stock is quoted in the Nasdaq National Market.
(e) The Placement Shares to be sold by the Company have been
duly authorized and, when issued, delivered and paid for in the manner set forth
in the Agreements with the purchasers thereof, will be duly authorized, validly
issued and fully paid, and will conform to the description thereof contained in
the Prospectus. No preemptive rights or other rights to subscribe for or
purchase exist as to such issuances and sale of the Placement Shares by the
Company. No stockholder of the Company has any right that has not been waived to
require the Company to register the sale of any shares owned by such stockholder
under the Act in connection with the offering of the Placement Shares. No
further approval or authority of the stockholders or the Board of Directors of
the Company will be required for the issuance and sale of the Placement Shares
to be sold by the Company as contemplated herein other than actions to be taken
by the Board of Directors through the duly appointed Pricing Committee of the
Board of Directors, which will occur prior to the Closing.
(f) The Company has full legal right, power and authority to
enter into this Agreement and perform the transactions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by the Company and
constitutes a valid and binding obligation of the Company enforceable against
the Company in accordance with its terms. The making and performance of this
Agreement by the Company and the consummation of the transactions herein
contemplated will not (A) violate any provisions of the Certificate of
Incorporation or other organizational documents, of the Company, and (B) except
for conflicts, defaults, breaches or violations which would not have a material
adverse effect on the Company, conflict with, result in the breach or violation
of, or constitute, either by itself or upon notice or the passage of time or
both, a default under (i) any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the Company
is a party or by which the Company or any of its properties may be bound or
affected, (ii) any statute or any authorization, judgment, decree, order, rule
or regulation of any court or (iii) any regulatory body, administrative agency
or other governmental body applicable to the Company or any of its properties.
No consent, approval, authorization or other order of any court, regulatory
body, administrative agency or other governmental body is required for the
execution and delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement, except for compliance with the Act, the Blue Sky
laws applicable to the public offering of the Placement Shares by the Company
and the Agent on behalf of the Company and the clearance of such offering with
the National Association of Securities Dealers, Inc. (the "NASD").
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(g) Ernst & Young LLP, who have expressed their opinion with
respect to the financial statements and schedules incorporated as part of the
Registration Statement and Prospectus, are independent accountants as required
by the Act and the Rules and Regulations.
(h) The financial statements and schedules of the Company and
the related notes thereto incorporated in the Registration Statement and the
Prospectus present fairly the financial position of the Company as of the
respective dates of such financial statements and schedules, and the results of
operations and changes in financial position of the Company for the respective
periods covered thereby. Such statements, schedules and related notes have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis as certified by the independent accountants named in
subsection 2(g). No other financial statements or schedules are required to be
incorporated into or included in the Registration Statement.
(i) Except as disclosed in the Prospectus, and except as to
defaults that individually or in the aggregate would not be material to the
Company, the Company is not in violation or default of any provision of its
Certificate of Incorporation or other organizational documents, nor is it in
breach of or default with respect to any provision of any agreement, judgment,
decree, order, mortgage, deed of trust, lease, franchise, license, indenture,
permit or other instrument to which it is a party or by which it or any of its
properties are bound; and there does not exist any state of facts that
constitutes an event of default on the part of the Company as defined in such
documents or that, with notice or lapse of time or both, would constitute such
an event of default.
(j) There are no contracts or other documents required to be
described in the Registration Statement or to be filed as exhibits to the
Registration Statement by the Act or by the Rules and Regulations that have not
been described or filed as required. The descriptions of the contracts so
described in the Prospectus are accurate and complete; all such contacts, other
than contracts the termination of which would not have a material adverse effect
on the Company, are in full force and effect on the date hereof.
(k) There are no legal or governmental actions, suits or
proceedings pending or, to the best of the Company's knowledge, threatened to
which the Company is or may be a party or of which property owned or leased by
the Company is or may be the subject, or related to environmental or
discrimination matters, which actions, suits or proceedings might, individually
or in the aggregate, prevent or materially adversely affect the transactions
contemplated by this Agreement or result in a material adverse change in the
condition (financial or otherwise), properties, business, results of operations
or, to the best of the Company's knowledge, prospects of the Company; and no
labor disturbance by the employees of the Company exists or is imminent that
might be expected to affect adversely such condition, properties, business,
results of operations or, to the best of Company's knowledge, prospects. The
Company is not a party or subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory body, administrative agency
or other governmental body.
(l) Except as disclosed in the Prospectus, the Company has
good and marketable title to all the properties and assets reflected as owned in
the financial statements hereinabove described (or elsewhere in or incorporated
into the Prospectus), subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except (i) those, if any, reflected in such financial
statements (or elsewhere in or incorporated into the Prospectus), or (ii) those
which are not material in amount and do not adversely affect the use made and
proposed to be made of such property by the Company. The Company holds its
leased properties under valid and binding leases, with such
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exceptions as are not materially significant in relation to the business of the
Company. Except as disclosed in the Prospectus, the Company owns or leases all
such properties as are necessary to its operations as now conducted.
(m) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, and except as described in
or contemplated by the Prospectus: (i) the Company has not incurred any material
liabilities or obligations, indirect, direct or contingent, or entered into any
material verbal or written agreement or other transaction that is not in the
ordinary course of business or that, in the Company's reasonable judgment is
likely to result in a material reduction in the future earnings of the Company;
(ii) the Company has not sustained any material loss or interference with its
business or properties from fire, flood, windstorm, accident or other calamity,
whether or not covered by insurance; (iii) the Company has not paid or declared
any dividends or other distributions with respect to its issued share capital
and the Company is not in default in the payment of principal or interest on any
outstanding debt obligations; (iv) there has not been any change in the share
capital (other than upon the sale of the Placement Shares hereunder) or
indebtedness material to the Company (other than in the ordinary course of
business); and (v) there has not been any material adverse change in the
condition (financial or otherwise), business, properties, results of operations
or, to the best of the Company's knowledge, prospects of the Company.
(n) Except as disclosed in or specifically contemplated by the
Prospectus, (A) the Company has sufficient trademarks, trade names, patent
rights, copyrights, licenses and other similar rights and proprietary knowledge
(collectively, the "Intangibles"), approvals and governmental authorizations to
conduct their businesses as now conducted; (B) the Company has not received any
written notice of infringement by it of Intangibles or trade secrets of others;
and (C) there is no claim being made against the Company regarding the
infringement of Intangibles or trade secrets that could have a material adverse
effect on the condition (financial or otherwise), business, results of
operations or, to the best of the Company's knowledge, prospects of the Company.
(o) Except as disclosed in the Prospectus, the Company has not
been advised, and has no reason to believe, that either it is not conducting
business in compliance with all applicable laws, rules and regulations of the
jurisdictions in which it is conducting business, including, without limitation,
all applicable local, state and federal environmental laws and regulations;
except where failure to be so in compliance would not materially adversely
affect the condition (financial or otherwise), business, results of operations
or, to the best of the Company's knowledge, prospects of the Company.
(p) The Company has filed all necessary federal, state and
other income and franchise tax returns and have paid all taxes shown as due
thereon; and the Company has no knowledge of any tax deficiency that has been or
might be asserted or threatened against the Company that could materially and
adversely affect the business, operations or properties of the Company.
(q) The Company is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended.
(r) The Company has not distributed and will not distribute
prior to the Closing Date any offering material in connection with the offering
and sale of the Placement Shares other than the Preliminary Prospectus, the
Prospectus, the Registration Statement and the other materials permitted by the
Act.
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(s) Except as described in the Prospectus, the Company
maintains insurance of the types and in the amounts generally deemed adequate
for its business, including, but not limited to, insurance covering real and
personal property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily insured against,
all of which insurance is in full force and effect.
(t) The Company has not at any time during the last five years
(i) made any unlawful contribution to any candidate for public office, or failed
to disclose fully any contribution in violation of law, or (ii) made any payment
to any governmental officer or official, or other person charged with similar
public or quasi-public duties, other than payments required or permitted by the
laws of the United States or any jurisdiction thereof.
(u) The Company has not taken and will not take, directly or
indirectly, any action designed to or that might be reasonably expected to cause
or result in stabilization or manipulation of the price of the Common Stock to
facilitate the sale or resale of the Placement Shares.
(v) No transfer taxes are required to be paid in connection
with the sale and delivery of the Placement Shares hereunder.
(w) The Placement Shares have been duly authorized for
quotation on the Nasdaq National Market.
SECTION 3. Representations and Warranties of the Agent. The Agent
represents and warrants to the Company that (A) it is duly registered as a
broker/dealer pursuant to the Securities Exchange Act of 1934 and is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD"), and (B) it has not distributed and will not distribute prior to the
Closing Date any offering material in connection with the offering and sale of
the Placement Shares, or any other shares, other than the Preliminary
Prospectus, the Registration Statement and other materials permitted by the Act.
The Company acknowledges and agrees that no information set forth in the
Prospectus was furnished to the Company by and on behalf of the Agent for use in
connection with the preparation of the Registration Statement and the
Prospectus.
SECTION 4. Purchase, Sale and Delivery of the Placement Shares.
The purchase price per share to be paid by the several purchasers to the Company
shall be determined by separate agreement among the Company and the purchasers.
The Company agrees to pay to the Agent at the Closing a commission on each
Specified Placement Share sold equal to % of the purchase price.
Delivery of certificates for the Placement Shares shall be made
as agreed by the purchasers and the Company.
SECTION 5. Covenants of the Company. The Company covenants and
agrees that:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto, to
become effective. If the Registration Statement has become or becomes effective
pursuant to Rule 430A of the Rules and Regulations, or the filing of the
Prospectus is otherwise required under Rule 424(b) of the Rules and Regulations,
the Company will file the Prospectus, properly completed, pursuant to the
applicable paragraph of Rule 424(b) of the Rules and Regulations within the time
period prescribed and will provide evidence satisfactory to you of such
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timely filing. The Company will promptly advise you in writing (i) of the
receipt of any comments of the Commission, (ii) of any request of the Commission
for amendment of or supplement to the Registration Statement (either before or
after it becomes effective), any Preliminary Prospectus or the Prospectus or for
additional information, (iii) when the Registration Statement shall have become
effective, and (iv) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the institution
of any proceedings for that purpose. If the Commission shall enter any such stop
order at any time, the Company will use its best efforts to obtain the lifting
of such order at the earliest possible moment. The Company will not file any
amendment or supplement to the Registration Statement (either before or after it
becomes effective), any Preliminary Prospectus or the Prospectus of which you
have not been furnished with a copy a reasonable time prior to such filing or to
which you reasonably object or which is not in compliance with the Act and the
Rules and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon your request, any amendments or supplements to the Registration
Statement or the Prospectus that in your judgment may be necessary or advisable
to enable the Agent to continue the placement of the Placement Shares on behalf
of the Company and will use its best efforts to cause the same to become
effective as promptly as possible. The Company will fully and completely comply
with the provisions of Rule 430A of the Rules and Regulations with respect to
information omitted from the Registration Statement in reliance upon such Rule.
(c) As soon as practicable, but not later than 45 days after
the end of the first quarter ending after one year following the "effective date
of the Registration Statement" (as defined in Rule 158(c) of the Rules and
Regulations), the Company will make generally available to its security holders
an earnings statement (which need not be audited) covering a period of 12
consecutive months beginning after the effective date of the Registration
Statement which will satisfy the provisions of the last paragraph of Section
11(a) of the Act.
(d) During such period as a prospectus is required by law to
be delivered in connection with sales by a dealer, the Company, at its expense,
but only for the nine-month period referred to in Section 10(a)(3) of the Act,
will furnish to you or mail to your order copies of the Registration Statement,
the Prospectus, the Preliminary Prospectus and all amendments and supplements to
any such documents in each case as soon as available and in such quantities as
you may request, for the purposes contemplated by the Act.
(e) The Company shall cooperate with you and your counsel in
order to qualify or register the Placement Shares for sale under (or obtain
exemptions from the application of) the Blue Sky laws of such jurisdictions as
you designate, shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as reasonably
required for the distribution of the Placement Shares. The Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any such jurisdiction where it is not presently qualified.
The Company shall advise you promptly of the suspension of the qualification or
registration of (or any such exemption relating to) the Placement Shares for
offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order
suspending such qualification, registration or exemption, the Company, with your
cooperation, will use its best efforts to obtain the withdrawal thereof.
(f) During the period of five years hereafter, the Company
will furnish to you (i) as soon as practicable after the end of each fiscal
year, copies of the Annual Report of the Company
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containing the balance sheet of the Company as of the close of such fiscal year
and statements of income, stockholders' equity and cash flows for the year then
ended and the opinion thereon of the Company's independent public accountants;
(ii) as soon as practicable after the filing thereof, copies of each proxy
statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q, Report on
Form 8-K or other report filed by the Company with the Commission, the NASD or
any securities exchange; and (iii) as soon as available, copies of any report or
communication of the Company mailed generally to holders of its Shares.
(g) The Company shall apply the net proceeds of the sale of
the Placement Shares sold by it substantially in accordance with its statements
under the caption "Use of Proceeds" in the Prospectus.
(h) The Company shall use its best efforts to qualify or
register its Shares for sale in nonissuer transactions under (or obtain
exemptions from the application of) the Blue Sky laws of the State of California
(and thereby permit market making transactions and secondary trading in the
Company's Shares in California), will comply with such Blue Sky laws and will
continue such qualifications, registrations and exemptions in effect for a
period of five years after the date hereof.
You may, in your sole discretion, waive in writing the
performance by the Company of any one or more of the foregoing covenants or
extend the time for their performance.
SECTION 6. Payment of Expenses. Whether or not the transactions
contemplated hereunder are consummated, the Company and you each agree to pay
all of its own costs, fees and expenses incurred in connection with the
performance of its respective obligations hereunder and in connection with the
transactions contemplated hereby.
SECTION 7. Conditions of the Obligations of the Agent. The
Company shall not complete the sale of any of the Placement Shares unless the
representations and warranties on the part of the Company herein set forth are
true as of the date of such sale and as of the consummation or settlement
thereof (the "Closing Date") and:
(a) The Registration Statement shall have become effective not
later than 7:00 P.M. (or, in the case of a registration statement filed pursuant
to Rule 462(b) of the Rules and Regulations relating to the Placement Shares,
not later than 10 P.M.), Washington, D.C. time, on the date of this Agreement,
or at such later time as shall have been consented to by you; if the filing of
the Prospectus, or any supplement thereto, is required pursuant to Rule 424(b)
of the Rules and Regulations, the Prospectus shall have been filed in the manner
and within the time period required by Rule 424(b) of the Rules and Regulations;
and prior to such Closing Date, no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or shall be pending or, to the knowledge of
the Company or you, shall be contemplated by the Commission; and any request of
the Commission for inclusion of additional information in the Registration
Statement, or otherwise, shall have been complied with.
(b) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, (i) there shall not have
been any change in the authorized or issued share capital of the Company other
than pursuant to the exercise of outstanding options disclosed in the Prospectus
or any material change in the indebtedness (other than in the ordinary course of
business) of the Company, (ii) except as set forth or contemplated by the
Registration Statement or the Prospectus, no material verbal or written
agreement or other transaction shall have
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been entered into by the Company that is not in the ordinary course of business
or that could result in a material reduction in the future earnings of the
Company, (iii) no loss or damage (whether or not insured) to the property of the
Company shall have been sustained that materially and adversely affects the
condition (financial or otherwise), business, results of operations or prospects
of the Company, (iv) no legal or governmental action, suit or proceeding
affecting the Company that is material to the Company or that affects or may
affect the transactions contemplated by this Agreement shall have been
instituted or threatened, and (v) there shall not have been any material change
in the condition (financial or otherwise), business, management, results of
operations or prospects of the Company that makes it impractical or inadvisable
in your judgment to proceed with the public offering or purchase of the
Placement Shares as contemplated hereby.
(c) There shall have been furnished to you, on the Closing
Date, in form and substance satisfactory to you, except as otherwise expressly
provided below:
(i) An opinion of Xxxxxx & Dodge, LLP, counsel for
the Company, addressed to you to the effect set forth on APPENDIX A hereto.
(ii) A certificate of the Company executed by the
Chairman of the Board, the President and the Chief Financial Officer of the
Company, dated the Closing Date, to the effect that:
(1) The representations and warranties of the
Company set forth in Section 2 of this Agreement are true and correct as of the
date of this Agreement and as of the Closing Date, and the Company has complied
with all the agreements and satisfied all the conditions on its part to be
performed or satisfied on or prior to such Closing Date;
(2) The Commission has not issued any order
preventing or suspending the use of the Prospectus or any Preliminary Prospectus
filed as a part of the Registration Statement or any amendment thereto; no stop
order suspending the effectiveness of the Registration Statement has been
issued; and to the best of the knowledge of the respective signers, no
proceedings for that purpose have been instituted or are pending or contemplated
under the Act;
(3) Each of the respective signers of the
certificate has carefully examined the Registration Statement and the
Prospectus; in his opinion and to the best of his knowledge, the Registration
Statement and the Prospectus and any amendments or supplements thereto contain
all statements required to be stated therein regarding the Company and its
subsidiaries; and neither the Registration Statement nor the Prospectus nor any
amendment or supplement thereto includes any untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary
to make the statements therein not misleading;
(4) Since the initial date on which the
Registration Statement was filed, no agreement, written or oral, transaction or
event has occurred that should have been set forth in an amendment to the
Registration Statement or in a supplement to or amendment of any prospectus
which has not been disclosed in such a supplement or amendment;
(5) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus, there has not been any
material adverse change or a development involving a material
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adverse change in the condition (financial or otherwise), business, properties,
results of operations, management or, to the best knowledge of the respective
signing officers, prospects of the Company and no legal or governmental action,
suit or proceeding is pending or threatened against the Company that is material
to the Company, whether or not arising from transactions in the ordinary course
of business, or that may adversely affect the transactions contemplated by this
Agreement; since such dates and except as so disclosed, neither the Company nor
any of its subsidiaries has entered into any verbal or written agreement or
other transaction that is not in the ordinary course of business or that could
result in a material reduction in the future earnings of the Company or incurred
any material liability or obligation, direct, contingent or indirect, made any
change in its capital stock, made any material change in its short-term debt or
funded debt or repurchased or otherwise acquired any of the Company's capital
stock; and the Company has not declared or paid any dividend, or made any other
distribution, upon its outstanding capital stock payable to stockholders of
record on a date prior to the Closing Date; and
(6) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus and except
as disclosed in or contemplated by the Prospectus, the Company has not sustained
a material loss or damage by strike, fire, flood, windstorm, accident or other
calamity (whether or not insured).
(iii) A letter addressed to you from Ernst & Young LLP,
independent accountants, dated the Closing Date, in to the effect set forth on
APPENDIX B hereto.
If any of the foregoing conditions is not satisfied, this
Agreement at your election will terminate upon notification by you to the
Company without liability on the part of the Agent or the Company except to the
extent provided in Section 8 or 9 hereof.
SECTION 8. Reimbursement of Agent' Expenses. Notwithstanding any
other provisions hereof, if following the occurrence of any sale of Placement
Shares to any purchaser the sale is not consummated because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or to comply with any provision hereof, the Company agrees to reimburse you upon
demand for all out-of-pocket expenses that shall have been reasonably incurred
by you in connection with the proposed sale of the Placement Shares, including
but not limited to fees and disbursements of counsel, printing expenses, travel
expenses, postage, facsimile charges, telegraph charges and telephone charges
relating directly to the offering contemplated by the Prospectus. Any such
termination shall be without liability of any party to any other party except
that the provisions of this Section 8, Section 6 and Section 9 shall at all
times be effective and shall apply.
SECTION 9. Indemnification.
(a) The Company agrees to indemnify and hold harmless the
Agent and each person, if any, who controls the Agent within the meaning of the
Act against any losses, claims, damages, liabilities or expenses, joint or
several, to which such Agent or such controlling person may become subject,
under the Act, the Exchange Act, or other federal or state statutory law or
regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendment or supplement thereto, or
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arise out of or are based upon the omission or alleged omission to state in any
of them a material fact required to be stated therein or necessary to make the
statements in any of them not misleading; and will reimburse each Agent and each
such controlling person for any legal and other expenses as such expenses are
reasonably incurred by such Agent or such controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action; provided, however, that the Company will
not be liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with the
information furnished to the Company pursuant to Section 3 hereof. In addition
to its other obligations under this Section 9(a), the Company agrees that, as an
interim measure during the pendency of any claim, action, investigation, inquiry
or other proceeding arising out of or based upon any statement or omission, or
any alleged statement or omission, or any inaccuracy in the representations and
warranties of the Company herein or failure to perform its obligations
hereunder, all as described in this Section 9(a), it will reimburse each Agent
on a quarterly basis for all reasonable legal or other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of the Company's
obligation to reimburse each Agent for such expenses and the possibility that
such payments might later be held to have been improper by a court of competent
jurisdiction. To the extent that any such interim reimbursement payment is so
held to have been improper, each Agent shall promptly return it to the Company
together with interest, compounded daily, determined on the basis of the prime
rate (or other commercial lending rate for borrowers of the highest credit
standing) announced from time to time by Bank of America NT&SA, San Francisco,
California (the "Prime Rate"). Any such interim reimbursement payments which are
not made to an Agent within 30 days of a request for reimbursement shall bear
interest at the Prime Rate from the date of such request. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) The Agent will severally indemnify and hold harmless
the Company, each of its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of the Act, against any losses, claims, damages, liabilities or
expenses to which the Company, of any such director, officer or controlling
person may become subject, under the Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Agent), insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon any untrue or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with the
information furnished to the Company pursuant to Section 3 hereof; and will
reimburse the Company, or any such director, officer or controlling person for
any legal and other expense reasonably incurred by the Company, or any such
director, officer or controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action. In addition to its other obligations under this
Section 9(b), each Agent severally agrees that, as an interim measure during the
pendency of any claim, action, investigation, inquiry or other proceeding
arising out of or
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based upon any statement or omission, or any alleged statement or omission,
described in this Section 9(b) which relates to information furnished to the
Company pursuant to Section 3 hereof, it will reimburse the Company (and, to the
extent applicable, each officer, director or controlling person) on a quarterly
basis for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Agent's obligation to reimburse the
Company (and, to the extent applicable, each officer, director or controlling
person) for such expenses and the possibility that such payments might later be
held to have been improper by a court of competent jurisdiction. To the extent
that any such interim reimbursement payment is so held to have been improper,
the Company (and, to the extent applicable, each officer, director or
controlling person) shall promptly return it to the Agent together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company within 30 days
of a request for reimbursement, shall bear interest at the Prime Rate from the
date of such request. This indemnity agreement will be in addition to any
liability which such Agent may otherwise have.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against an indemnifying party
under this Section 9, notify the indemnifying party in writing of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party for
contribution or otherwise than under the indemnity agreement contained in this
Section 9 or to the extent it is not prejudiced as a proximate result of such
failure. In case any such action is brought against any indemnified party and
such indemnified party seeks or intends to seek indemnity from an indemnifying
party, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with all other indemnifying parties similarly
notified, to assume the defense thereof with counsel reasonably satisfactory to
such indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties (it being understood, however, that the
indemnifying party shall not be liable for the expenses of more than one
separate counsel, approved by the Agent in the case of paragraph (a),
representing the indemnified parties who are parties to such action). Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 9 for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the next
preceding sentence or (ii) the indemnifying party shall not have employed
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the
action, in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying party.
(d) If the indemnification provided for in this Section 9
is required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party under paragraphs
(a), (b) or (c) in respect of any losses, claims, damages, liabilities or
expenses
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referred to herein, then each applicable indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of any losses,
claims, damages, liabilities or expenses referred to herein (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Agent from the offering of the Placement Shares or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Agent in connection with the statements or omissions or inaccuracies in the
representations and warranties herein which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The respective relative benefits received by the Company and the
Agent shall be deemed to be in the same proportion, in the case of the Company,
as the total price paid to the Company for the Placement Shares sold by them
less the commissions to the Agent contemplated hereby (but before deducting
expenses) bears to the total price paid to the Company by the purchasers before
deducting such commissions, and in the case of the Agent as the commissions
received by them bears to the total price paid to the Company by the purchasers
before deducting such commissions. The relative fault of the Company and the
Agent shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact or the inaccurate or the alleged inaccurate
representation and/or warranty relates to information supplied by the Company or
the Agent and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid or
payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include, subject to the
limitations set forth in subparagraph (c) of this Section 9, any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim. The provisions set forth in
subparagraph (c) of this Section 9 with respect to notice of commencement of any
action shall apply if a claim for contribution is to be made under this
subparagraph (d); provided, however, that no additional notice shall be required
with respect to any action for which notice has been given under subparagraph
(c) for purposes of indemnification. The Company and the Agent agree that it
would not be just and equitable if contribution pursuant to this Section 9 were
determined solely by pro rata allocation (even if the Agent were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 9, no Agent
shall be required to contribute any amount in excess of the amount of the total
commissions received by such Agent in connection with the Placement Shares
placed by it. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Agent's
obligations to contribute pursuant to this Section 9 are several and not joint.
(e) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in Sections 9(a)
and 9(b) hereof, including the amounts of any requested reimbursement payments
and the method of determining such amounts, shall be settled by arbitration
conducted under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in Sections 9(a) and 9(b) hereof
and would not resolve the ultimate propriety or enforceability of the obligation
to reimburse expenses which is created by the provisions of such Sections 9(a)
and 9(b) hereof.
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SECTION 10. Termination. Without limiting the right to terminate
this Agreement pursuant to any other provision hereof:
(a) The Company may terminate this Agreement at any time
prior to any sale of Placement Shares.
(b) This Agreement shall also terminate at 5:00 P.M.,
California time, on the twentieth full business day after the Registration
Statement shall have become effective if no sale of Placement Shares shall have
occurred at or prior to such time. Any termination pursuant to this subsection
(b) shall be without liability on the part of the Agent to the Company or on the
part of the Company to the Agent except to the extent provided in Section 8 or
Section 9 hereof.
SECTION 11. Representations and Indemnities to Survive Delivery.
The respective indemnities, agreements, representations, warranties and other
statements of the Company and of its officers and of the Agent set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of the Agent or the Company or any of
its or their partners, officers or directors, or any controlling person, as the
case may be. The respective indemnities, representations and warranties of the
Company and the Agent will survive delivery of and payment for the Placement
Shares sold hereunder and any termination of this Agreement.
SECTION 12. Notices. All communications hereunder shall be in
writing and, if sent to the Agent shall be mailed, delivered or telegraphed and
confirmed to you at Pacific Growth Equities, 000 Xxxxxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Xx. Xxxxxxx X. Xxxxxx; with a copy to
Howard, Rice, Nemerovski, Canady, Xxxx & Rabkin, A Professional Corporation,
Three Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:
Xxxx X. Xxxxxxx; and if sent to the Company shall be mailed, delivered or
telegraphed and confirmed to the Company at 000 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx, 00000, Attention Xxxxxxx X. Xxxxxx, M.D., Ph.D.; with a copy to
Xxxxxx & Dodge, LLP, Xxx Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000, Attention:
Xxxxxxx Xxxxxx. The Company or you may change the address for receipt of
communications hereunder by giving notice to the others.
SECTION 13. Successors. This Agreement will inure to the benefit
of and be binding upon the parties hereto, and to the benefit of the officers
and directors and controlling persons referred to in Section 9, and in each case
their respective successors, personal representatives and assigns, and no other
person will have any right or obligation hereunder. No such assignment shall
relieve any party of its obligations hereunder. The term "successors" shall not
include any purchaser of the Placement Shares as such from any of the Agent
merely by reason of such purchase.
SECTION 14. 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.
SECTION 15. Applicable Law. This Agreement shall be governed by
and construed in accordance with the internal laws (and not the laws pertaining
to conflicts of laws) of the State of California.
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SECTION 16. 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. This Agreement may be executed in
several counterparts, each one of which shall be an original, and all of which
shall constitute one and the same document.
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 you.
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed copies hereof,
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whereupon it will become a binding agreement between the Company and the Agent,
all in accordance with its terms.
Very truly yours,
TRANSKARYOTIC THERAPIES, INC.
By:
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Xxxxxxx X Xxxxxx
President and Chief Executive Officer
The foregoing Placement
Agreement is hereby confirmed
and accepted by us in San
Francisco, California as of
the date first above written.
PACIFIC GROWTH EQUITIES
By:
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Authorized Signatory
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