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EXHIBIT 10.5
PURCHASE AGREEMENT
PURCHASE AGREEMENT (this "AGREEMENT"), dated as of August 29,
1997, by and among Genzyme Corporation, a Massachusetts corporation (the
"COMPANY"), and the entities whose names appear on the signature pages hereof.
Such entities are each referred to herein as a "PURCHASER" and, collectively, as
the "PURCHASERS".
The Company wishes to sell and each Purchaser wishes to buy, subject to
the terms and conditions set forth in this Agreement, a convertible debenture of
the Company in the principal amount set forth on the signature page hereof
executed by such Purchaser, having the terms and conditions and in the form
attached hereto as EXHIBIT A (a "GMO DEBENTURE" and, when taken together with
all of the debentures issued to the other Purchasers hereunder at the Closing
(as defined below), the "GMO DEBENTURES"), in reliance on the exemption from
securities registration afforded by the provisions of Section 4(2) under the
Securities Act of 1933, as amended (the "SECURITIES ACT").
The GMO Debentures are convertible into shares of Genzyme Molecular
Oncology Division Common Stock, $.01 par value (the "GMO STOCK"), and
exchangeable under certain conditions into Genzyme GGD Debentures in the form
attached hereto as EXHIBIT B (the "GGD DEBENTURES"). The GGD Debentures, if and
when issued, are convertible into shares of the Company's General Division
Common Stock, $.01 par value (the "GGD STOCK"). The term (i) "DEBENTURES" shall
mean, collectively, the GMO Debentures and, upon issuance, the GGD Debentures,
(ii) "CONVERSION SHARES" shall mean, at any time, the aggregate of (x) the
number of shares of GMO Stock that are issued or issuable upon conversion of the
GMO Debentures and (y) the number of shares of GGD Stock that are issued or
issuable upon conversion of the GGD Debentures, (iii) "INTEREST PAYMENT SHARES"
shall mean the shares of GMO Stock or GGD Stock, as the case may be, issued by
the Company in payment of interest on the Debentures in accordance with the
terms thereof and (iv) "SECURITIES" shall mean, collectively, the GMO Debentures
and, upon issuance, the GGD Debentures, the Conversion Shares and the Interest
Payment Shares.
The parties hereto agree as follows:
1. PURCHASE AND SALE OF DEBENTURES.
1.1 AGREEMENT TO PURCHASE AND SELL. Upon the terms and subject to the
conditions set forth herein, the Company agrees to sell at the Closing (as
defined below), and each Purchaser agrees to purchase, a GMO Debenture in the
principal amount set forth on the signature page hereof executed by such
Purchaser, at a purchase price equal to such principal amount (the "PURCHASE
PRICE").
1.2 CLOSING. Subject to the satisfaction of the conditions set forth
herein, the closing of the purchase and sale of the GMO Debentures (the
"CLOSING") will be deemed to occur when this Agreement, and the other
Transaction Documents (as defined below), have been executed and delivered by
both the Company and each Purchaser, and full payment of the amount of the
Purchase Price payable by each Purchaser has been made by such Purchaser by wire
transfer of same day
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funds to an account designated by the Company against delivery by the Company of
a duly executed GMO Debenture to such Purchaser. The date on which the Closing
is deemed to occur is referred to herein as the "CLOSING DATE".
1.3 CERTAIN DEFINITIONS. When used herein, (A) "business day" shall
mean any day on which the New York Stock Exchange and commercial banks in the
cities of Boston and New York are open for business and (B) an "affiliate" of a
party shall mean any person or entity controlling, controlled by or under common
control with that party.
2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser, solely with respect to it, hereby makes the following
representations and warranties to the Company (which shall be true as of the
Closing and as of any such later date as contemplated hereunder) and agrees with
the Company that:
2.1 AUTHORIZATION; ENFORCEABILITY. Such Purchaser is duly and validly
organized, validly existing and in good standing as a corporation under the laws
of the state of its incorporation with full power and authority to purchase the
Securities and to execute and deliver this Agreement. This Agreement and the
Registration Rights Agreement of even date herewith among the Company and the
Purchasers (the "REGISTRATION RIGHTS AGREEMENT") each constitutes such
Purchaser's valid and legally binding obligation, enforceable in accordance with
its terms, except as such enforcement may be limited by (i) applicable
bankruptcy, insolvency, reorganization or other laws of general application
relating to or affecting the enforcement of creditors' rights generally and (ii)
general principles of equity.
2.2 ACCREDITED INVESTOR; INVESTMENT INTENT. Such Purchaser is (i) an
accredited investor, as defined in Rule 501 of Regulation D under the Securities
Act, (ii) an institution and (iii) except as otherwise disclosed on the
signature page hereto executed by such Purchaser, a "qualified institutional
buyer" as defined in Rule 144A under the Securities Act. Such Purchaser is
acquiring the Securities solely for such Purchaser's own account for investment
purposes as a principal and not with a view to the public resale or distribution
of all or any part thereof; PROVIDED, HOWEVER, that in making such
representation, such Purchaser does not agree to hold the Securities for any
minimum or specific term and reserves the right to sell, transfer or otherwise
dispose of the Securities at any time in accordance with the provisions of this
Agreement and the Registration Rights Agreement and with Federal and state
securities laws applicable to such sale, transfer or disposition.
2.3 INFORMATION. The Company has provided such Purchaser with certain
written information regarding the Company and has granted to such Purchaser the
opportunity to ask questions of and receive answers from representatives of the
Company, its officers, directors, employees and agents concerning the terms and
conditions of the purchase and sale of the Securities hereunder, and the Company
and its business and prospects.
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2.4 LIMITATIONS ON DISPOSITION. Such Purchaser acknowledges that,
except as provided in the Registration Rights Agreement, the Securities have not
been and are not being registered under the Securities Act or any state
securities laws and applicable rules and regulations, and may not be transferred
unless and until:
(a) there is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition
is made in accordance with such registration statement; or
(b)(i) such Purchaser shall have notified the Company in advance
of the proposed disposition, and (ii) if reasonably requested by the
Company, such Purchaser shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration under the Securities Act. It
is agreed that no opinion of counsel will be required for the transfer
of the Securities or any interest therein to an affiliate of such
Purchaser or with respect to a sale thereof made pursuant to Rule 144
under the Securities Act (or any successor provision)("RULE 144");
PROVIDED, HOWEVER, that prior to any sale made pursuant to Rule 144,
such Purchaser will furnish to the Company, upon its request, a
certificate setting forth such representations as are customarily given
by a selling shareholder to the issuer in a Rule 144 transaction.
2.5 LEGEND. Such Purchaser understands that the Debentures, and until
such time as the Conversion Shares and the Interest Payment Shares have been
registered under the Securities Act as contemplated by the Registration Rights
Agreement or otherwise may be sold by such Purchaser pursuant to Rule 144(k),
shall bear at issuance a restrictive legend in substantially the following form:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the
"SECURITIES ACT"), and may not be sold or transferred in the
absence of an effective registration statement under the
Securities Act or an exemption from the registration requirements
thereunder."
The legend set forth above shall be removed and the Company shall
issue a new certificate without such legend to the holder of any such Security
upon which it is stamped if (i) the sale of such Security is registered under
the Securities Act, (ii) such Security can be sold publicly pursuant to
Rule 144(k) or (iii) such Security has been sold pursuant to Rule 144.
2.6 ISSUANCE OF GGD DEBENTURES; UPDATING OF REPRESENTATIONS. In the
event that the GMO Debentures are exchanged in whole or in part for the GGD
Debentures in accordance with the terms of the GMO Debentures, the
representations made herein with respect to the Debentures, the Conversion
Shares or the Interest Payment Shares, as the case may be, shall be deemed to be
repeated as of such date with respect to the GGD Debentures.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby makes the following representations and warranties
to each Purchaser (which shall be true as of the Closing and as of any such
later date as contemplated hereunder) and agrees with each Purchaser that:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the
Company and its subsidiaries is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation and
has all requisite corporate power and authority to carry on its business as now
conducted. Each of the Company and its subsidiaries is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure so to qualify would have a material adverse effect on the consolidated
business or financial condition of the Company and its subsidiaries taken as a
whole. Each of the Company and its subsidiaries is not the subject of any
pending or, to its knowledge, threatened investigation or administrative or
legal proceeding by the Internal Revenue Service, the taxing authorities of any
state or local jurisdiction, the Securities and Exchange Commission (the
"COMMISSION") or any state securities commission or other governmental entity
which could reasonably be expected to have a material adverse effect on the
consolidated business or financial condition of the Company. The term
"SUBSIDIARIES" means corporations in which the Company has an equity interest of
greater than 50%.
3.2 AUTHORIZATION; CONSENTS. All corporate action on the part of the
Company by its officers, directors and shareholders necessary for (A) the
authorization, execution and delivery of, and the performance by the Company of
its obligations under, (i) this Agreement, (ii) the Debentures, (iii) the
Registration Rights Agreement and (iv) all other agreements, documents,
certificates or other instruments delivered by the Company at the Closing (the
instruments described in (i), (ii), (iii) and (iv) being collectively referred
to herein as the "TRANSACTION DOCUMENTS"), and (B) the authorization,
reservation for issuance, and issuance and delivery of the Conversion Shares
upon conversion of the Debentures has been taken. The Transaction Documents
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, except as such enforcement may be
limited by (i) applicable bankruptcy, insolvency, reorganization or other laws
of general application relating to or affecting the enforcement of creditors'
rights generally and (ii) general principles of equity. Except as otherwise
provided in the Transaction Documents, the Company has obtained all governmental
or regulatory consents and approvals required for it to execute, deliver and
perform its obligations under the Transaction Documents.
3.3 DISCLOSURE DOCUMENTS; MATERIAL AGREEMENTS; OTHER INFORMATION. The
Company has filed with the Commission: (i) the Company's Annual Report on Form
10-K for the year ended December 31, 1996, (ii) Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1997 and June 30, 1997, (iii) all Current
Reports on Form 8-K required to be filed with the Commission since December 31,
1996, (iv) the Company's definitive Proxy Statement for its 1997 Annual Meeting
of Stockholders and (v) the Company's Prospectus and Joint Proxy Statement dated
May 14, 1997 for its Special Meeting of Stockholders held on June 12, 1997
(collectively, the "DISCLOSURE DOCUMENTS"). The Company is not aware of any
event that would require the filing of, or with respect to which the Company
intends to file, a Form 8-K after the Closing. Each
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Disclosure Document, as of the date of the filing thereof with the Commission,
conformed in all material respects to the requirements of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and/or the Securities
Act, as applicable, and the rules and regulations thereunder, and, as of the
date of such filing, such Disclosure Document did not contain an untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All material
agreements required to be filed as exhibits to the Disclosure Documents have
been filed as required; neither the Company nor any of its subsidiaries is in
breach of any such agreement where such breach is reasonably likely to have a
material adverse effect on the business or financial condition of the Company.
The information provided to the Purchaser as described in paragraph 2.3 above
does not contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
3.4 CAPITALIZATION. The capitalization of the Company as of
August 27, 1997 is as set forth on SCHEDULE 3.4 hereto, and there have been no
material changes thereto between such date and the Closing Date.
3.5 VALID ISSUANCE. The Debentures, when issued, sold and delivered
in accordance with the terms hereof, and the Conversion Shares and the Interest
Payment Shares, when issued in accordance with the terms of the Debentures, will
be duly and validly issued, fully paid and nonassessable, free and clear of any
liens, claims, preemptive rights or encumbrances imposed by or through the
Company and, based in part upon the representations of such Purchaser in this
Agreement, will be issued in compliance with all applicable Federal and state
securities laws.
3.6 NO CONFLICT WITH OTHER INSTRUMENTS. Neither the Company nor any
of its subsidiaries is in violation or default of any provisions of its charter,
bylaws or other organizational documents, as amended and in effect on and as of
the date hereof, or of any material provision of any material instrument or
contract to which it is a party or by which it is bound, or of any provision of
any Federal or state judgment, writ, decree, order, statute, rule or
governmental regulation applicable to the Company, which would have a material
adverse affect on the Company's consolidated business or financial condition.
The execution, delivery and performance of the Debentures, this Agreement and
the other Transaction Documents, and the consummation of the transactions
contemplated hereby and thereby, will not result in any such violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under any such provision, instrument or contract or an
event which results in the creation of any lien, charge or encumbrance upon any
assets of the Company or of any of its subsidiaries.
3.7 FINANCIAL CONDITION; TAXES; LITIGATION.
3.7.1 The Company's financial condition is, in all material
respects, as described in the Disclosure Documents, except for changes in the
ordinary course of business and normal year-end adjustments that are not, in the
aggregate, materially adverse to the Company. Except as
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otherwise described in the Disclosure Documents, there have been no material
adverse changes to the Company's consolidated business or financial condition
since June 30, 1997.
3.7.2 The financial statements contained in the Disclosure
Documents have been prepared in accordance with generally accepted accounting
principles consistently applied and fairly present the consolidated financial
condition of the Company as of the dates of the balance sheets included therein
and the consolidated results of its operations and cash flows for the period
then ended (except as may be indicated therein). Without limiting the foregoing,
there are no material liabilities, contingent or actual, that are required to be
disclosed in the Disclosure Documents that are not so disclosed.
3.7.3 The Company has filed all tax returns required to be filed
by it and paid all taxes which are due, except for taxes which it reasonably
disputes or which could not reasonably be expected to have a material adverse
effect on the consolidated business or financial condition of the Company.
3.7.4 Except as set forth in SCHEDULE 3.7.4, there is no material
claim, litigation or administrative proceeding or inquiry pending, or, to the
best of the Company's knowledge, threatened, against the Company or any of its
subsidiaries, or against any officer, director or employee of the Company or any
such subsidiary in connection with such person's employment therewith. Neither
the Company nor any of its subsidiaries is a party to or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality which could reasonably be expected to have
a material adverse effect on the consolidated business or financial condition of
the Company.
3.8 REPORTING COMPANY; FORM S-3. The Company is subject to the
reporting requirements of the Exchange Act, has a class of securities registered
under Section 12 of the Exchange Act, and has filed all reports required
thereby. Pursuant to General Instruction I.A. of Form S-3, the Company meets the
eligibility requirements for registering securities on a registration statement
on Form S-3 under the Securities Act.
3.9 INTELLECTUAL PROPERTY. The Company and its subsidiaries own,
possess or can acquire on reasonable terms adequate trademarks, trade names and
other rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property rights necessary to conduct the
business now operated by them, or presently employed by them, and have not
received any notice of infringement of or conflict with asserted rights of
others with respect to any such rights that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate have
a material adverse effect on the consolidated business or financial condition of
the Company.
3.10 REGISTRATION RIGHTS; RIGHTS OF PARTICIPATION. Except as
described on SCHEDULE 3.10 hereto, (A) the Company has not granted or agreed to
grant to any person or entity any rights (including "piggy-back" registration
rights) to have any securities of the Company registered with the Commission or
any other governmental authority and (B) no person or entity, including, but not
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limited to, current or former shareholders of the Company, underwriters,
brokers, agents or other third parties, has any right of first refusal,
preemptive right, right of participation, or any similar right to participate in
the transactions contemplated by this Agreement or any other Transaction
Document which has not been waived.
3.11 TRADING ON NASDAQ. The GGD Stock is authorized for quotation on
the Nasdaq National Market, and trading in the GGD Stock on Nasdaq has not been
suspended. Shareholder approval for the issuance of the GMO Debentures is not
required under NASD Rule 4460.
3.12 SOLICITATION. Neither the Company nor any of its subsidiaries or
affiliates, nor any person acting on its or their behalf, (i) has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D under the Securities Act) in connection with the offer or sale of
the GMO Debentures or (ii) has, directly or indirectly, made any offers or sales
of any security or solicited any offers to buy any security, under any
circumstances that would require registration of the GMO Debentures under the
Securities Act.
3.13 OTHER FEES. Except as set forth on SCHEDULE 3.13, the Company is
not obligated to pay any compensation or other fee, cost or related expenditure
to any underwriter, broker, agent or other representative in connection with the
transactions contemplated hereby.
3.14 ISSUANCE OF GGD DEBENTURES; UPDATING OF REPRESENTATIONS. In the
event that the GMO Debentures are exchanged in whole or in part for the GGD
Debentures in accordance with the terms of the GMO Debentures, the
representations made herein with respect to the Debentures, the Conversion
Shares or the Interest Payment Shares, as the case may be, shall be deemed to be
repeated as of such date with respect to the GGD Debentures.
4. COVENANTS OF THE COMPANY.
4.1 CORPORATE EXISTENCE. The Company shall, so long as any Purchaser
or any affiliate of such Purchaser beneficially owns a Debenture or Debentures
(or any interest therein), any Conversion Shares or Interest Payment Shares,
maintain its corporate existence in good standing and shall pay all its taxes
when due except for taxes which the Company reasonably disputes or which could
not reasonably be expected to have a material adverse effect on the consolidated
business or financial condition of the Company.
4.2 PROVISION OF INFORMATION. The Company shall provide each
Purchaser with copies of its Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, Current Reports on Form 8-K and proxy statements, in each such case
promptly after filing thereof with the Commission, until the conversion or
redemption in full of the Debenture or Debentures held by such Purchaser.
4.3 FORM D; BLUE-SKY QUALIFICATION. The Company shall, on or before
the Closing, take such action as is necessary to qualify the GMO Debentures for
sale to the Purchasers under applicable state or "blue-sky" laws or obtain an
exemption therefrom, and shall provide evidence of any such action to such
Purchaser. In the event that the GMO Debentures are exchanged in
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whole or in part for the GGD Debentures in accordance with the terms of the GMO
Debentures, the Company shall, prior to such issuance, take such action as is
necessary to qualify such exchange under applicable state or "blue-sky" laws or
obtain an exemption therefrom, and shall provide evidence of any such action to
such Purchaser.
4.4 REPORTING STATUS. As long as such Purchaser or any affiliate of
such Purchaser beneficially owns a Debenture or Debentures, or any interest
therein, or any Conversion Shares or Interest Payment Shares, and until the date
on which any of the foregoing may be sold to the public pursuant to Rule 144(k)
(or any successor rule or regulation), (i) the Company shall timely file with
the Commission all reports required to be so filed pursuant to the Exchange Act
and (ii) the Company shall not terminate its status as an issuer required by the
Exchange Act to file reports thereunder even if the Exchange Act or the rules or
regulations thereunder would permit such termination.
4.5 USE OF PROCEEDS. The Company shall use the proceeds from the sale
of the GMO Debentures for general corporate purposes and shall not use such
proceeds to make a loan to or an investment in any other corporation,
partnership or other entity.
4.6 LISTING. The Company shall, (i) as soon as practicable following
the effectiveness of the GMO Registration Statement (as defined in the
Registration Rights Agreement), secure the designation and quotation or listing
of the GMO Stock on the Nasdaq National Market, the New York Stock Exchange or
the American Stock Exchange and shall use its best efforts to maintain such
designation, quotation or listing, and (ii) as soon as practicable following the
issuance of the GGD Debentures, take such measures as may be necessary in order
to secure the designation and quotation or listing of the shares of GGD Stock
issuable thereby on the Nasdaq National Market, the New York Stock Exchange or
the American Stock Exchange and shall use its best efforts to maintain such
designation, quotation or listing of the GGD Stock.
4.7 RESERVATION OF COMMON STOCK. The Company shall at all times have
authorized and reserved for issuance, free from any preemptive rights, solely
for the purpose of effecting conversions of the Debentures hereunder, such
number of shares of GMO Stock and/or GGD Stock, as the case may be, as shall
from time to time be sufficient to effect the conversion of the aggregate
principal amount of the Debentures then outstanding (the "RESERVED AMOUNT"). As
of the Closing Date, the Reserved Amount shall be equal to 3,475,915 shares of
GMO Stock. In the event that the holders of GMO Debentures are entitled to
exchange GMO Debentures for GGD Debentures pursuant to the terms of the GMO
Debentures, the Reserved Amount shall, on the GGD Issue Date (as defined in the
GMO Debentures), be no less than (I) that number of shares of GGD Stock issuable
upon conversion of (a)(i) the unpaid principal amount of the GMO Debentures
eligible to be so exchanged, plus any accrued and unpaid interest thereon as of
the GGD Issue Date, DIVIDED BY (ii) one hundred and thirteen percent (113%) of
the average of the Closing Bid Prices (as defined in the GMO Debentures) of the
GGD Stock on the five (5) Trading Days immediately prior to (but not including)
the GGD Issue Date (the "GGD CONVERSION PRICE") PLUS (b)(i) the aggregate amount
of interest payable on all of the GGD Debentures (assuming for this purpose that
the aggregate principal amount of all of the GGD Debentures for which GMO
Debentures are exchangeable on
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the GGD Issue Date are issued) through the date on which the GGD Debentures
mature DIVIDED BY (ii) the GGD Conversion Price, and (II) that number of shares
of GMO Stock issuable upon conversion of the aggregate unpaid principal amount
of the GMO Debentures, if any, not exchanged or eligible to be so exchanged. If
at any time there occurs a stock split, recapitalization or similar occurrence
whereby the number of outstanding shares of GMO Stock or GGD Stock, as the case
may be, is increased, the Company shall take immediate action (including, if
necessary, seeking shareholder authorization) to increase the Reserved Amount
accordingly. The Company shall not reduce the number of shares reserved for
issuance hereunder without the written consent of the holders of at least 66% of
the then outstanding aggregate principal balance of the Debentures.
4.8 USE OF PURCHASER NAME. Except as required by applicable law or
regulation, the Company shall not use, directly or indirectly, any Purchaser's
name in any advertisement, announcement, press release or other similar
communication unless it has received the prior written consent of such Purchaser
for the specific use contemplated.
4.9 COMPANY'S INSTRUCTIONS TO TRANSFER AGENT. The Company shall,
prior to the Initial Conversion Date (as defined in the GMO Debentures),
instruct its transfer agent (the "TRANSFER AGENT") (i) to convert the GMO
Debentures into GMO Stock and, upon issuance of the GGD Debentures, to convert
the GGD Debentures into GGD Stock, in either such case, upon receipt of a valid
Conversion Notice (as defined in the Debentures) from a Purchaser, (ii) to issue
certificates representing the number of shares of GMO Stock or GGD Stock, as the
case may be, specified in such Conversion Notice, free of any restrictive legend
if at such time the GMO Registration Statement or the GGD Registration Statement
(each as defined in the Registration Rights Agreement), as the case may be, is
effective and available for sales of such shares or such shares are eligible for
sale pursuant to Rule 144(k) under the Securities Act, in the name of the
Purchaser or its nominee and (iii) to deliver such certificates to the Purchaser
no later than the close of business on the third (3rd) business day following
the Conversion Date (as defined in the Debentures). The Company represents to
and agrees with each Purchaser that it will not give any instruction to the
Transfer Agent that will conflict with the foregoing instruction or otherwise
restrict such Purchaser's right to convert the Debentures or receive Conversion
Shares in accordance with the terms of the Debentures, the Registration Rights
Agreement and this Agreement, respectively. In the event the Company's
relationship with the Transfer Agent should be terminated for any reason, the
Transfer Agent shall continue acting as transfer agent pursuant to the terms
hereof until such time that a successor transfer agent is appointed by the
Company and executes and agrees to be bound by the terms hereof.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT CLOSING. Each
Purchaser's obligations at the Closing, including without limitation its
obligation to purchase the GMO Debenture to be purchased by it hereunder, are
conditioned upon the fulfillment of each of the following events:
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(a) the representations and warranties of the Company set forth in
this Agreement shall be true and correct in all material respects
as of the Closing Date as if made on such date;
(b) the Company shall have complied with or performed all of the
agreements, obligations and conditions set forth in this
Agreement that are required to be complied with or performed by
the Company on or before the Closing;
(c) the Company shall have delivered to the Purchaser a certificate,
signed by an officer of the Company, certifying that the
conditions specified in paragraphs (a) and (b) above have been
fulfilled;
(d) the Company shall have delivered to the Purchaser an opinion of
counsel for the Company, dated the Closing Date, in the form
attached as EXHIBIT 5.1;
(e) the Company shall have executed and delivered the Registration
Rights Agreement;
(f) there shall have been no material adverse changes in the
Company's consolidated business or financial condition since
June 30, 1997 which have not been disclosed in the Disclosure
Documents; and
(g) the Company shall have authorized and reserved for issuance upon
conversion of the GMO Debentures the number of shares of GMO
Stock specified in paragraph 4.7 above.
5.2 CONDITIONS TO COMPANY'S OBLIGATIONS AT CLOSING. The Company's
obligation at the Closing to issue and sell a GMO Debenture to a Purchaser
hereunder is subject to the satisfaction, at or before the Closing Date, of each
of such Purchaser's Closing Conditions (as defined below). The obligation of the
Company to issue and sell a GMO Debenture to any Purchaser hereunder is distinct
and separate from its obligation to issue and sell GMO Debentures to any other
Purchaser hereunder and the failure by one or more Purchasers to fulfill the
conditions set forth herein or to consummate the purchase of GMO Debentures
hereunder will not relieve the Company of its obligations with respect to any
other Purchaser. The "PURCHASER'S CLOSING CONDITIONS" are as follows:
(a) the representations and warranties of the applicable Purchaser
shall be true and correct in all material respects as of the
Closing Date as if made on such date;
(b) the applicable Purchaser shall have complied with or performed
all of the agreements, obligations and conditions set forth in
this Agreement that are required to be complied with or performed
by such Purchaser on or before the Closing;
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(c) the applicable Purchaser shall have delivered to the Company a
Form W-8 or W-9, as applicable, duly executed by such Purchaser
and confirming that such Purchaser is not subject to back-up
withholding; and
(d) such Purchaser shall have executed and delivered the Registration
Rights Agreement.
6. INDEMNIFICATION.
The Company agrees to indemnify and hold harmless each Purchaser and
its officers, directors, employees and agents, and each person who controls the
Purchaser within the meaning of the Securities Act or the Exchange Act (each, a
"PURCHASER INDEMNIFIED PARTY") against any losses, claims, damages, liabilities
or reasonable out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) as incurred, joint or several, to which it, they or
any of them, may become subject and not otherwise reimbursed, arising out of or
in connection with the breach by the Company of any of its representations,
warranties or covenants made herein.
Each Purchaser agrees to indemnify and hold harmless the Company and
its officers, directors, employees and agents, and each person who controls the
Company within the meaning of the Securities Act or the Exchange Act (each, a
"COMPANY INDEMNIFIED PARTY") (a Purchaser Indemnified Party and a Company
Indemnified Party are each hereinafter referred to as an "INDEMNIFIED PARTY")
against any losses, claims, damages, liabilities or expenses (including the fees
and disbursements of counsel) as incurred, joint or several, to which it, they
or any of them, may become subject and not otherwise reimbursed, arising out of
or in connection with the breach by such Purchaser of any of its
representations, warranties or covenants made herein.
Promptly after receipt by an Indemnified Party of notice of the
commencement of any action pursuant to which indemnification may be sought
hereunder, such Indemnified Party will, if a claim in respect thereof is to be
made against the other party (the "INDEMNIFYING PARTY"), deliver to the
Indemnifying Party a written notice of the commencement thereof and the
Indemnifying Party shall have the right to participate in and to assume the
defense thereof with counsel reasonably selected by the Indemnifying Party that
is reasonably acceptable to the Indemnified Party; PROVIDED, HOWEVER, that an
Indemnified Party shall have the right to retain its own counsel, with the
reasonably incurred fees and expenses of such counsel to be paid by the
Indemnifying Party, if representation of such Indemnified Party by the counsel
retained by the Indemnifying Party would be inappropriate due to actual or
potential conflicts of interest under applicable standards of professional
conduct between such Indemnified Party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
Indemnifying Party within a reasonable time of the commencement of any such
action will not relieve the Indemnifying Party of any of its obligations
hereunder with respect to such action except to the extent such failure is
prejudicial to the Indemnifying Party's ability to defend any such action.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of pending or threatened action in
respect of which an Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified
-11-
12
Party unless such settlement includes an unconditional release of such
Indemnified Party from all liability on any claims that are the subject matter
of such action. An Indemnifying Party will not be liable for any settlement of
any action or claim effected without its written consent.
7. MISCELLANEOUS.
7.1 SURVIVAL; SEVERABILITY. The representations, warranties,
covenants and indemnities made by the parties herein shall survive the Closing
notwithstanding any due diligence investigation made by or on behalf of the
party seeking to rely thereon. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Agreement shall continue in full force and effect
without said provision; provided that in such case the parties shall negotiate
in good faith to replace such provision with a new provision which is not
illegal, unenforceable or void, as long as such new provision does not
materially change the economic benefits of this Agreement to the parties.
7.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement. Each Purchaser may assign its rights hereunder, in connection
with any private sale or transfer of a Debenture, as long as, as a condition
precedent to such transfer, the transferee executes an acknowledgment agreeing
to be bound by the applicable provisions of this Agreement, in which case the
term "Purchaser" shall be deemed to refer to such transferee as though such
transferee were an original signatory hereto.
7.3 INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser hereunder are several and not joint with the
obligations of the other Purchasers hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at the Closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.
7.4 NO RELIANCE. Each party acknowledges that (i) it has such
knowledge in business and financial matters as to be fully capable of evaluating
this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby, (ii) it is not relying on any advice or
representation of any other party (other than those contained or described in
this Agreement or the other Transaction Documents) in connection with entering
into this Agreement, the other Transaction Documents or such transactions, (iii)
it has not received from any such party
-12-
13
any assurance or guarantee as to the merits (whether legal, regulatory, tax,
financial or otherwise) of entering into this Agreement or the other Transaction
Documents or the performance of its obligations hereunder and thereunder, and
(iv) it has consulted with its own legal, regulatory, tax, business, investment,
financial and accounting advisors to the extent that it has deemed necessary,
and has entered into this Agreement and the other Transaction Documents based on
its own independent judgment and on the advice of its advisors as it has deemed
necessary, and not on any view (whether written or oral) expressed by any such
party.
7.5 INJUNCTIVE RELIEF. The Company acknowledges that a breach by it
of its obligations hereunder may cause irreparable harm to each Purchaser and
that the remedy or remedies at law for any such breach may be inadequate and
agrees, in the event of any such breach, in addition to all other available
remedies, such Purchaser shall have the right to obtain equitable relief to
enforce this Agreement.
7.6 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York without regard to the conflict of laws
provisions thereof. Each party hereby irrevocably submits to the non-exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law.
7.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
7.8 HEADINGS. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
7.9 NOTICES. Any notice, demand or request required or permitted to
be given by the Company or a Purchaser pursuant to the terms of this Agreement
shall be in writing and shall be deemed given (i) when delivered personally or
by verifiable facsimile transmission (with a hard copy to follow) on or before
5:00 p.m., eastern time, on a business day or, if such day is not a business
day, on the next succeeding business day, (ii) on the next business day after
timely delivery to a nationally recognized overnight courier and (iii) on the
third business day after deposit in the U.S. mail (certified or registered mail,
return receipt requested, postage prepaid), addressed to the parties as follows:
-13-
14
If to the Company:
Genzyme Corporation
Xxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Chief Legal Officer
Tel: 000-000-0000
Fax: 000-000-0000
and if to any Purchaser, to such address and facsimile number for such Purchaser
as shall appear on the signature page hereof executed by such Purchaser, or as
shall be designated by such Purchaser in writing to the Company.
7.10 EXPENSES. Except as otherwise provided herein, each of the
Company and the Purchasers shall pay all costs and expenses that it incurs in
connection with the negotiation, execution, delivery and performance of this
Agreement.
7.11 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, the Debentures and
the other Transaction Documents constitute the entire agreement between the
parties with regard to the subject matter hereof and thereof, superseding all
prior agreements or understandings, whether written or oral, between the
parties. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended except pursuant to a written instrument executed by
the Company and each Purchaser, and no provision hereof may be waived other than
by a written instrument signed by the party against whom enforcement of any such
waiver is sought.
-14-
15
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first-above written.
GENZYME CORPORATION
By: /s/ Xxxxx X. XxXxxxxxx
------------------------------------------
Name: Xxxxx X. XxXxxxxxx
Title: Executive Vice President Finance
and Chief Financial Officer
PURCHASER NAME: ______________________________
By: __________________________________________
Name:
Title:
ADDRESS:
_____________________________________
_____________________________________
Tel: ________________________________
Fax: ________________________________
WITH COPIES OF NOTICES SENT TO:
_____________________________________
_____________________________________
Tel: ________________________________
Fax: ________________________________
PRINCIPAL AMOUNT OF THE
GMO DEBENTURE TO BE PURCHASED: $______________
| | Check here if Purchaser is NOT a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended.
-15-
16
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first-above written.
GENZYME CORPORATION
By: __________________________
Name:
Title:
PURCHASER NAME: Swiss Bank Corporation, London Branch
-------------------------------------
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------------ ------------------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Executive Director Title: Executive Director,
Convertibles Convertibles
Swiss Bank Corp
(London Branch)
Attorney-in-Fact
ADDRESS:
Swiss Bank House
----------------
One High Timber Street
----------------------
Xxxxxx XX0X00X
--------------
Attn: Xxx Xxxxx
---------------
Tel: 000-00000-000-0000
------------------
Fax: 000-00000-000-0000
------------------
WITH COPIES OF NOTICES SENT TO:
SBC Warburg Dillon Read Inc.
----------------------------
000 Xxxx Xxxxxxx Xxxxxxxxx
--------------------------
Xxxxxxx, Xxxxxxxx 00000
-----------------------
Attn: Executive Director - Convertibles
---------------------------------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
PRINCIPAL AMOUNT OF THE
GMO DEBENTURE TO BE PURCHASED: $1,750,000
----------
[ ] Check here if Purchaser is NOT a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended.
17
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first-above written.
GENZYME CORPORATION
By: ___________________________
Name:
Title:
PURCHASER NAME: Tribeca Investments, L.L.C.
---------------------------
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: CEO
ADDRESS:
000 Xxxxxxxxx Xxxxxx
--------------------
XX, XX 00000
------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
WITH COPIES OF NOTICES SENT TO:
Xxxxx Teh
---------
Managing Director
-----------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
PRINCIPAL AMOUNT OF THE
GMO DEBENTURE TO BE PURCHASED: $1,000,000
----------
[ ] Check here if Purchaser is NOT a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended.
18
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first-above written.
GENZYME CORPORATION
By: __________________________
Name:
Title:
PURCHASER NAME: Xxxxx International
-------------------
By: /s/ Xxxxxxx X. Xxxx
------------------------------
Name: Xxxxxxx X. Xxxx
Title: Managing Member
ADDRESS:
Century House
-------------
00 Xxxxxxxx Xx.
---------------
Xxxxxxxx XX-08 Bermuda
----------------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
WITH COPIES OF NOTICES SENT TO:
Staro Asset Management
----------------------
0000 X. Xxxxxx Xxxxxx, Xxx. 000
-------------------------------
Xxxxxx, XX 00000
----------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
PRINCIPAL AMOUNT OF THE
GMO DEBENTURE TO BE PURCHASED: $750,000.00
-----------
[ ] Check here if Purchaser is NOT a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended.
19
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first-above written.
GENZYME CORPORATION
By: __________________________
Name:
Title:
PURCHASER NAME: SoundShore Partners L.P.
------------------------
By: /s/ Xxxxxx Xxxxxxxx *By: AIG International Asset Management Ltd
------------------------------ as General Partner of
Name: Xxxxxx X. Xxxxxxxx SoundShore Partners L.P.
Title: Vice-President*
ADDRESS:
00 Xxxxxxxx Xxxx
----------------
Pembroke HM 08, Bermuda
-----------------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
WITH COPIES OF NOTICES SENT TO:
Mr. Xxxxxx Xxxxxxx
------------------
Basso Securities Ltd
--------------------
1281 East Main Street, 4th Floor
--------------------------------
Xxxxxxxx, Xxxxxxxxxxx 00000, X.X.X.
-----------------------------------
Tel: 000-000-0000
------------
Fax: 000-000-0000 / 000-000-0000
---------------------------
PRINCIPAL AMOUNT OF THE
GMO DEBENTURE TO BE PURCHASED: $1,000,000.00
-------------
[ ] Check here if Purchaser is NOT a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended.
20
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first-above written.
GENZYME CORPORATION
By: __________________________
Name:
Title:
PURCHASER NAME: Xxxxxxx Investments International, Ltd.
---------------------------------------
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxx
Title: General Member of Investment Manager
Staro Asset Management
ADDRESS:
International Fund Administration
---------------------------------
00 Xxx-Xx-Xxxxx Xxxx, Xxx. 000
------------------------------
Xxxxxxxx XX-11 Bermuda
----------------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
WITH COPIES OF NOTICES SENT TO:
Staro Asset Management, LLC
---------------------------
0000 Xxxx Xxxxxx Xxxxxx, Xxx. 000
---------------------------------
Xxxxxx, XX 00000
----------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
PRINCIPAL AMOUNT OF THE
GMO DEBENTURE TO BE PURCHASED: $750,000.00
-----------
[ ] Check here if Purchaser is NOT a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended.
21
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first-above written.
GENZYME CORPORATION
By: __________________________
Name:
Title:
PURCHASER NAME: Proprietary Convertible Investment Group Inc.
By: /s/ Xxxxx Xxxxx
--------------------------
Name: Xxxxx Xxxxx
Title: Vice-President
ADDRESS:
c/o Credit Suisse First Boston Corp.
------------------------------------
00 Xxxxxxx Xxxxxx, 0xx Floor
----------------------------
Xxx Xxxx, XX 00000
------------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
WITH COPIES OF NOTICES SENT TO:
________________________________
________________________________
Tel: ___________________________
Fax: ___________________________
PRINCIPAL AMOUNT OF THE
GMO DEBENTURE TO BE PURCHASED: $10,000,000
-----------
[X] Check here if Purchaser is NOT a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended.
Accredited Investor
22
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first-above written.
GENZYME CORPORATION
By: __________________________
Name:
Title:
PURCHASER NAME: Oracle Partners, L.P.
---------------------
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxx
Title: General Partner
ADDRESS:
000 Xxxxx Xxxxxx, 00xx Xxxxx
----------------------------
Xxx Xxxx, XX 00000
-------------------
Attn: Xxxxxx Xxxxxxxxx, CFO
---------------------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
WITH COPIES OF NOTICES SENT TO:
________________________________
________________________________
Tel: ___________________________
Fax: ___________________________
PRINCIPAL AMOUNT OF THE
GMO DEBENTURE TO BE PURCHASED: $2,000,000
----------
[ ] Check here if Purchaser is NOT a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended.
23
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first-above written.
GENZYME CORPORATION
By: __________________________
Name:
Title:
PURCHASER NAME: Och-Ziff Capital Management, L.P.
---------------------------------
By: /s/ Xxxxxx X. Och
-----------------------------------------------------
Name: Xxxxxx X. Och
Title: Managing Member of Och-Ziff Associates, L.L.C.
General Partner of Och-Ziff
ADDRESS:
Och-Ziff Capital Management, L.P.
---------------------------------
153 East 53rd Street, 44th Floor
--------------------------------
Xxx Xxxx, XX 00000
------------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
WITH COPIES OF NOTICES SENT TO:
________________________________
________________________________
Tel: ___________________________
Fax: ___________________________
PRINCIPAL AMOUNT OF THE
GMO DEBENTURE TO BE PURCHASED: $1,750,000
----------
[ ] Check here if Purchaser is NOT a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended.
24
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first-above written.
GENZYME CORPORATION
By: __________________________
Name:
Title:
PURCHASER NAME: Employers Reinsurance Corporation
---------------------------------
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Director
ADDRESS:
Acting as Investment Advisor
----------------------------
Salomon Brothers Asset Management Inc.
--------------------------------------
7 World Trade Center, 38th Floor
--------------------------------
Xxx Xxxx, XX 00000
------------------
Tel: 000-000-0000
------------
Fax: 000-000-0000
------------
WITH COPIES OF NOTICES SENT TO:
________________________________
________________________________
Tel: ___________________________
Fax: ___________________________
PRINCIPAL AMOUNT OF THE
GMO DEBENTURE TO BE PURCHASED: $1,000,000
----------
[ ] Check here if Purchaser is NOT a "qualified institutional buyer" as
defined in Rule 144A under the Securities Act of 1933, as amended.
