Exhibit 1. Form of Underwriting Agreement
3,500,000 Shares
Common Stock
$0.01 Par Value
UNDERWRITING AGREEMENT
February 1, 2000
UNDERWRITING AGREEMENT
February __, ▇▇▇▇
▇▇▇▇▇▇▇ DILLON READ LLC
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC,
as Managing Underwriters
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Genzyme Transgenics Corporation, a Massachusetts corporation
(the "Company"), proposes to issue and sell to the underwriters named in
Schedule A annexed hereto (the "Underwriters") an aggregate of 3,500,000 shares
(the "Firm Shares") of Common Stock, $0.01 par value (the "Common Stock"), of
the Company. In addition, solely for the purpose of covering over-allotments,
the Company proposes to grant to the Underwriters the option to purchase from
the Company up to an additional 525,000 shares of Common Stock (the "Additional
Shares"). The Firm Shares and the Additional Shares are hereinafter collectively
sometimes referred to as the "Shares." The Shares are described in the
Prospectus which is referred to below.
The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3, (File No. 333-94187)
including a prospectus, relating to the Shares, which incorporates by reference
documents which the Company has filed or will file in accordance with the
provisions of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively called the "Exchange Act"). The Company has
furnished to you, for use by the Underwriters and by dealers, copies of one or
more preliminary prospectuses and the documents incorporated by reference
therein (each thereof, including the documents incorporated therein by
reference, being herein called a "Preliminary Prospectus") relating to the
Shares. Except where the context otherwise requires, the registration statement,
as amended when it becomes effective, including all documents filed as a part
thereof or incorporated by reference therein, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430(A) under the Act and also
including any registration statement filed pursuant to Rule 462(b) under the
Act, is herein called the Registration Statement, and the prospectus, including
all documents incorporated therein by reference, in the form filed by the
Company with the Commission pursuant to Rule 424(b) under the Act on or before
the second business day after the date hereof (or such earlier time as may be
required under the Act) or, if no such filing is required, the form of
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final prospectus included in the Registration Statement at the time it became
effective, is herein called the Prospectus.
The Company and the Underwriters agree as follows:
1. SALE AND PURCHASE. Upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Company agrees to sell to the respective Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company
the respective number of Firm Shares set forth opposite the name of such
Underwriter in Schedule A annexed hereto at a purchase price of $ per
Share. The Company is advised by you that the Underwriters intend (i) to make
a public offering of their respective portions of the Firm Shares as soon
after the effective date of the Registration Statement as in your judgment is
advisable and (ii) initially to offer the Firm Shares upon the terms set
forth in the Prospectus. You may from time to time increase or decrease the
public offering price after the initial public offering to such extent as you
may determine.
In addition, the Company hereby grants to the several
Underwriters the option to purchase, and upon the basis of the warranties and
representations and subject to the terms and conditions herein set forth, the
Underwriters shall have the right to purchase, severally and not jointly, from
the Company, ratably in accordance with the number of Firm Shares to be
purchased by each of them (subject to such adjustment as you shall determine to
avoid fractional shares), all or a portion of the Additional Shares as may be
necessary to cover over-allotments made in connection with the offering of the
Firm Shares, at the same purchase price per share to be paid by the Underwriters
to the Company for the Firm Shares. This option may be exercised by you on
behalf of the several Underwriters at any time (but not more than once) on or
before the thirtieth day following the date hereof, by written notice to the
Company. Such notice shall set forth the aggregate number of Additional Shares
as to which the option is being exercised, and the date and time when the
Additional Shares are to be delivered (such date and time being herein referred
to as the additional time of purchase); PROVIDED, HOWEVER, that the additional
time of purchase shall not be earlier than the time of purchase (as defined
below) nor earlier than the second business day1 after the date on which the
option shall have been exercised nor later than the tenth business day after the
date on which the option shall have been exercised. The number of Additional
Shares to be sold to each Underwriter shall be the number which bears the same
proportion to the aggregate number of Additional Shares being purchased as the
number of Firm Shares set forth opposite the name of such Underwriter on
Schedule A hereto bears to the total number of Firm Shares (subject, in each
case, to such adjustment as you may determine to eliminate fractional shares).
------------------------------
1 As used herein "business day" shall mean a day on which the New York Stock
Exchange is open for trading.
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2. PAYMENT AND DELIVERY. Payment of the purchase price for the
Firm Shares shall be made to the Company by Federal Funds wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company ("DTC") for the respective accounts of the
Underwriters. Such payment and delivery shall be made at 10:00 A.M., New York
City time, on February __, 2000 (unless another time shall be agreed to by you
and the Company or unless postponed in accordance with the provisions of Section
8 hereof). The time at which such payment and delivery are actually made is
hereinafter sometimes called the time of purchase. Certificates for the Firm
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify no later than the second business day
preceding the time of purchase. For the purpose of expediting the checking of
the certificates for the Firm Shares by you, the Company agrees to make such
certificates available to you for such purpose at least one full business day
preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall
be made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the Additional
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify no later than the second business day
preceding the additional time of purchase. For the purpose of expediting the
checking of the certificates for the Additional Shares by you, the Company
agrees to make such certificates available to you for such purpose at least one
full business day preceding the additional time of purchase.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each of the Underwriters that:
(a) the Company has not received, and has no notice of, any order of
the Commission preventing or suspending the use of any Preliminary Prospectus,
or instituting proceedings for that purpose, and each Preliminary Prospectus, at
the time of filing thereof, conformed in all material respects to the
requirements of the Act when the Registration Statement becomes effective, the
Registration Statement and the Prospectus will fully comply in all material
respects with the provisions of the Act, and the Registration Statement will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and the Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; any statutes, regulations, contracts or
other documents that are required to be described in the Registration Statement
or the Prospectus or to be filed as exhibits to the Registration Statement have
been so described or filed; PROVIDED, HOWEVER, that the Company makes no
warranty or representation with respect to any statement contained in the
Registration Statement or the Prospectus in reliance upon and in conformity with
information concerning the Underwriters and furnished in writing by or on behalf
of any Underwriter through you to the Company expressly for use in the
Registration Statement or the Prospectus; the documents incorporated by
reference in the Prospectus, at the time they were filed with the Commission,
complied in all material respects with the requirements of
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the Exchange Act, and do not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading and the Company has not distributed any offering material
in connection with the offering or sale of the Shares other than the
Registration Statement, the Preliminary Prospectus, the Prospectus or any other
materials, if any, permitted by the Act;
(b) as of the date of this Agreement, the Company has an authorized
capitalization as set forth in the line item "Stockholders' equity" in the
section of the Registration Statement and the Prospectus entitled
"Capitalization" and, as of the time of purchase and the additional time of
purchase, as the case may be, the Company shall have an authorized
capitalization as set forth under the heading entitled "As Adjusted" in the
section of the Registration Statement and the Prospectus entitled
"Capitalization"; all of the issued and outstanding shares of capital stock
including the Common Stock and Series B Convertible Preferred Stock of the
Company have been duly and validly authorized and issued and are fully paid and
non-assessable, have been issued in compliance with all federal and state
securities laws and were not issued in violation of any preemptive right, resale
right, right of first refusal or similar right;
(c) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of The Commonwealth of
Massachusetts, with full power and authority to own, lease and operate its
properties and conduct its business as described in the Registration Statement;
(d) the Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership or leasing
of its properties or the conduct of its business requires such qualification,
except where the failure to so qualify would not have a material adverse effect
on the business, properties, financial condition or results of operation of the
Company and its Subsidiaries (as hereinafter defined) taken as a whole (a
"Material Adverse Effect"). The Company has no subsidiaries (as defined in the
Rules and Regulations) other than Primedica Corporation, Genzyme Transgenics
Securities Corporation, GTC Cancer Vaccines, Inc. TSI Corporation, Transgenic
Investments, Inc., TSI Deutschland GmbH, Primedica Argus Research Laboratories,
Inc., Primedica Cambridge, Inc., Primedica Redfield, Inc., Primedica Rockville,
Inc., Primedica Worcester, Inc., Health and Science Research Incorporated and
International Drug Development Corporation (collectively, the "Wholly Owned
Subsidiaries"); the Company owns 50% of the outstanding membership interests of
ATIII LLC ("ATIII" and, together with the Wholly Owned Subsidiaries, the
"Subsidiaries") and 22% of the outstanding equity interests of SMI Genzyme Ltd.
("SMIG"); other than the Subsidiaries and SMIG, the Company does not own,
directly or indirectly, any shares of stock or any other equity or long-term
debt securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity; complete and correct
copies of the certificates of incorporation and of the bylaws of the Company and
each of the Wholly Owned Subsidiaries and of the certificate of formation and
operating agreement of ATIII
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and, in each case, all amendments thereto have been delivered to you, and except
as set forth in the exhibits to the Registration Statement no changes therein
will be made subsequent to the date hereof and prior to the time of purchase or,
if later, the additional time of purchase; each of the Wholly Owned Subsidiaries
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement; ATIII has been
duly formed and is validly existing as a limited liability company in good
standing under the laws of the jurisdiction of its formation, with full power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement; each of the Subsidiaries is
duly qualified to do business as a foreign entity in good standing in each
jurisdiction where the ownership or leasing of the properties or the conduct of
its business requires such qualification, except where the failure to so qualify
would not have a Material Adverse Effect; all of the outstanding shares of
capital stock of each of the Wholly Owned Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and (except as otherwise
described in this Section 3(d)) are owned by the Company subject to no security
interest, other encumbrance or adverse claims except in favor of Genzyme
Corporation; all of the membership interests of ATIII have been duly authorized
and validly issued and 50% of such interests are owned by each of Genzyme
Corporation and the Company subject to no security interest, other encumbrance
or adverse claims; no options, warrants or other rights to purchase, agreements
or other obligations to issue or other rights to convert any obligation into
shares of capital stock or ownership interests in any of the Subsidiaries are
outstanding.
(e) the Company and each of the Subsidiaries are in compliance in all
material respects with the laws, orders, rules, regulations and directives
issued or administered by each jurisdiction in which they conduct their
respective businesses;
(f) neither the Company nor any of the Subsidiaries is in breach of, or
in default under (nor has any event occurred which with notice, lapse of time,
or both would result in any breach of, or constitute a default under), its
respective charter or by-laws or certificate of formation or operating
agreement, as the case may be, or in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which any of them or any of their properties is bound, and the execution,
delivery and performance of this Agreement, the issuance and sale of the Shares
and the consummation of the transactions contemplated hereby will not conflict
with, or result in any breach of or constitute a default under (nor constitute
any event which with notice, lapse of time, or both would result in any breach
of, or constitute a default under), any provisions of the charter or by-laws or
certificate of formation or operating agreement, as the case may be, of the
Company or any of the Subsidiaries or under any provision of any license,
indenture, mortgage, deed of trust, bank loan or credit agreement or other
evidence of indebtedness, or any lease, contract or other agreement or
instrument to which the Company or any of the
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Subsidiaries is a party or by which any of them or their respective properties
may be bound or affected, or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the Company or
any of the Subsidiaries;
(g) this Agreement has been duly authorized, executed and delivered by
the Company and is a legal, valid and binding agreement of the Company
enforceable in accordance with its terms;
(h) the capital stock of the Company, including the Shares, conforms in
all material respects to the description thereof contained in the Exchange Act
reports incorporated by reference into the Registration Statement and Prospectus
and the certificates for the Shares are in due and proper form and the holders
of the Shares will not be subject to personal liability by reason of being such
holders;
(i) the Shares have been duly and validly authorized and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and non-assessable;
(j) no approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and sale of the
Shares or the consummation by the Company of the transaction as contemplated
hereby other than registration of the Shares under the Act and any necessary
qualification under the securities or blue sky laws of the various jurisdictions
in which the Shares are being offered by the Underwriters or under the rules and
regulations of the National Association of Securities Dealers, Inc. ("NASD");
(k) no person has the right, contractual or otherwise, to cause the
Company to issue to it, or register pursuant to the Act, any shares of capital
stock of the Company upon the issue and sale of the Shares to the Underwriters
hereunder, nor does any person have preemptive rights, co-sale rights, rights of
first refusal or other rights to purchase any of the Shares other than those
that have been expressly waived prior to the dates hereof;
(l) PricewaterhouseCoopers LLP, whose report on the consolidated
financial statements of the Company and the Wholly Owned Subsidiaries is filed
with the Commission as part of the Registration Statement and Prospectus, are
independent public accountants as required by the Act;
(m) each of the Company and its Subsidiaries holds or has applied for
all necessary licenses, authorizations, consents and approvals and has made all
necessary filings required under any federal, state, local or foreign law,
regulation or rule, and has obtained all necessary authorizations, consents and
approvals from other persons, in order to conduct its respective business,
except to the extent a failure to so hold, file or obtain would not have a
Material Adverse Effect;
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neither the Company nor any of its Subsidiaries is in violation of, or in
default under, any such license, authorization, consent or approval or any
federal, state, local or foreign law, regulation or rule or any decree, order or
judgment applicable to the Company or any of its Subsidiaries the effect of
which could have a Material Adverse Effect;
(n) all legal or governmental proceedings, contracts, leases or
documents of a character required to be described in the Registration Statement
or the Prospectus or to be filed as an exhibit to the Registration Statement
have been so described or filed as required;
(o) there are no actions, suits, claims, investigations or proceedings
pending or threatened to which the Company or any of the Subsidiaries or any of
their respective officers is a party or of which any of their respective
properties is subject at law or in equity, or before or by any federal, state,
local or foreign governmental or regulatory commission, board, body, authority
or agency which is reasonably likely to result in a judgment, decree or order
having a Material Adverse Effect or prevent consummation of the transaction
contemplated hereby;
(p) the audited financial statements incorporated by reference into the
Registration Statement and the Prospectus present fairly the consolidated
financial position of the Company and the Wholly Owned Subsidiaries as of the
dates indicated and the consolidated results of operations and cash flows of the
Company and the Wholly Owned Subsidiaries for the periods specified; such
financial statements have been prepared in conformity with generally accepted
accounting principles applied on a consistent basis during the periods involved;
(q) subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus, there has not been (i) any
material adverse change, or any development which, in the Company's reasonable
judgment, is likely to cause a material adverse change, in the business,
properties or assets described or referred to in the Registration Statement, or
the results of operations, condition (financial or otherwise), business or
operations of the Company and its Subsidiaries taken as a whole, (ii) any
transaction which is material to the Company or any of its Subsidiaries, except
transactions in the ordinary course of business, (iii) any obligation, direct or
contingent, which is material to the Company and its Subsidiaries taken as a
whole, incurred by the Company or any of its Subsidiaries, except obligations
incurred in the ordinary course of business, (iv) any change in the capital
stock or outstanding indebtedness of the Company or any of its Subsidiaries
except in the ordinary course of business or (v) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company. Neither the
Company nor any of its Subsidiaries has any material contingent obligation which
is not disclosed in the Registration Statement;
(r) the Company has obtained the agreement of each of its directors and
executive officers and Genzyme Corporation not to sell, offer to sell, contract
to sell, hypothecate grant any option to sell or otherwise dispose of, directly
or indirectly, any shares of Common Stock or securities
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convertible into or exchangeable for Common Stock or warrants or other rights to
purchase Common Stock for a period of 90 days after the date of the Prospectus;
(s) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(t) the Company and each of the Subsidiaries own or possess sufficient
trademarks, trade names, service marks, patents, patent rights, copyrights,
licenses, approvals, inventions, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) and other similar rights and intellectual property including
specifically, but without limitation, the patents listed on SCHEDULE B
(collectively, "Intellectual Property Rights") necessary to conduct their
businesses as now conducted. Except as otherwise disclosed in the Prospectus,
neither the Company nor any of the Subsidiaries has received any notice of
infringement or conflict with asserted rights of others with respect to any
Intellectual Property Rights or of any facts or circumstances which would render
any Intellectual Property Rights invalid or inadequate to protect the interests
of the Company or its Subsidiaries therein, and, which infringement or conflict,
if the subject of an unfavorable decision, would have a Material Adverse Effect.
Except for a lien granted to Genzyme Corporation, the Company has good and
marketable title to the patents and patent applications referenced as being
owned by the Company in the Prospectus. The Company and its Subsidiaries have
entered into valid and binding confidentiality, non-disclosure and assignment of
inventions agreements with all current and former employees. The Company has
also entered into confidentiality agreements with consultants, vendors and other
third parties with access to non-public information regarding the Company's or
its Subsidiaries' Intellectual Property Rights. To the knowledge of the Company,
there is no material unauthorized use, disclosure, infringement or
misappropriation of any Intellectual Property Rights of the Company or the
Subsidiaries, any trade secret material to the Company or any of the
Subsidiaries, or any Intellectual Property Rights of any third party to the
extent licensed by or through the Company or any of the Subsidiaries, by any
third party, including any employee, former employee, consultant or vendor of
the Company or any of the Subsidiaries;
(u) each of the Company and each of the Subsidiaries has good and
marketable title to all the properties and assets reflected as owned in the
financial statements referred to in Section 4(p) above (or elsewhere in the
Prospectus), in each case free and clear of any security interests, mortgages,
liens, encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not materially
interfere with the use made or proposed to be made of such property by the
Company or such Subsidiary. The real property, improvements, equipment and
personal property held under lease by the Company or the Subsidiaries are held
under valid and enforceable leases, with such exceptions as are not material to
the Company or the Subsidiaries, and neither the Company nor any of the
Subsidiaries has any
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notice of any claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any of the Subsidiaries under any of the leases or
subleases referred to above, or affecting or questioning the rights of the
Company or such Subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease, except for such notices or
claims as would not reasonably be expected to have a Material Adverse Effect;
(v) the Company and each of the Subsidiaries have filed all necessary
federal, state and foreign income and franchise tax returns and have paid all
taxes required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them. The Company has
made adequate charges, accruals and reserves in the applicable financial
statements referred to in Section 4(p) above in respect of all federal, state
and foreign income and franchise taxes for all periods as to which the tax
liability of the Company or any of the Subsidiaries has not been finally
determined;
(w) each of the Company and the Subsidiaries are insured by
institutions which the Company reasonably believes to be recognized, financially
sound and reputable institutions with policies in such amounts and with such
deductibles and covering such risks as are generally deemed adequate and
customary for their businesses including, but not limited to, policies covering
real and personal property owned or leased by the Company and the Subsidiaries
against theft, damage, destruction, acts of vandalism and earthquakes. The
Company has no reason to believe that it or any Subsidiary will not be able (i)
to renew its existing insurance coverage as and when such policies expire or
(ii) to obtain comparable coverage from similar institutions as may be necessary
or appropriate to conduct its business as now conducted and at a cost that would
not have a Material Adverse Effect. Neither of the Company nor any Subsidiary
has been denied any insurance coverage which it has sought or for which it has
applied;
(x) 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 Shares;
(y) there are no business relationships or related-party transactions
involving the Company, any of the Subsidiaries, Genzyme Corporation or any other
person required to be described in the Prospectus which have not been described
as required;
(z) neither the Company nor any of the Subsidiaries nor, to the best of
the Company's knowledge, any employee or agent of the Company or any Subsidiary,
has made any contribution or other payment to any official of, or candidate for,
any federal, state or foreign office in violation of any law or of the character
required to be disclosed in the Prospectus;
(aa) the Company maintains a system of accounting controls sufficient
to provide reasonable assurances that (i) transactions are executed in
accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
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statements in conformity with generally accepted accounting principles as
applied in the United States and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate action is
taken with respect to any differences;
(bb) except as would not, individually or in the aggregate, have a
Material Adverse Effect (i) neither the Company nor any of the Subsidiaries is
in violation of any federal, state, local or foreign law or regulation relating
to pollution or protection of human health or the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including without limitation, laws and
regulations relating to emissions, discharges, releases or threatened releases
of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous
substances, petroleum and petroleum products (collectively, "Hazardous
Materials"), or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials
(collectively, "Environmental Laws"), which violation includes, but is not
limited to, noncompliance with any permits or other governmental authorizations
required for the operation of the business of the Company or any of the
Subsidiaries under applicable Environmental Laws, or noncompliance with the
terms and conditions thereof, nor has the Company or any of the Subsidiaries
received any written communication, whether from a governmental authority,
citizens group, employee or otherwise, that alleges that the Company or any of
the Subsidiaries is in violation of any Environmental Law; (ii) there is no
claim, action or cause of action filed with a court or governmental authority,
no investigation with respect to which the Company has received written notice,
and no written notice by any person or entity alleging potential liability for
investigatory costs, cleanup costs, governmental responses costs, natural
resources damages, property damages, personal injuries, attorneys' fees or
penalties arising out of, based on or resulting from the presence, or release
into the environment, of any Hazardous Materials at any location owned, leased
or operated by the Company or any of the Subsidiaries, now or in the past
(collectively, "Environmental Claims"), pending or, to the best of the Company's
knowledge, threatened against the Company or any of the Subsidiaries or any
person or entity whose liability for any Environmental Claim the Company or any
of the Subsidiaries has retained or assumed either contractually or by operation
of law; (iii) the Company and the Subsidiaries have all permits, authorizations
and approvals required under any applicable Environmental Laws and are each in
compliance with their requirements; and (iv) to the best of the Company's
knowledge, there are no past or present actions, activities, circumstances,
conditions, events or incidents, including, without limitation, the release,
emission, discharge, presence or disposal of any Hazardous Materials, that
reasonably could result in a violation of any Environmental Law or form the
basis of a potential Environmental Claim against the Company or any of the
Subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or its Subsidiary has retained or assumed either
contractually or by operation of law; and
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(cc) the Company and the Subsidiaries and any "employee benefit plan"
(as defined under the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company, the
Subsidiaries or their "ERISA Affiliates" (as defined below) are in compliance in
all material respects with ERISA. "ERISA Affiliate" means, with respect to the
Company or a Subsidiary, any member of any group of organizations described in
Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of 1986, as amended,
and the regulations and published interpretations thereunder (the "Code") of
which the Company or such Subsidiary is a member. No "reportable event" (as
defined under ERISA) has occurred or is reasonably expected to occur with
respect to any "employee benefit plan" established or maintained by the Company,
its Subsidiaries or any of their ERISA Affiliates. No "employee benefit plan"
established or maintained by the Company, the Subsidiaries or any of their ERISA
Affiliates, if such "employee benefit plan" were terminated, would have any
"amount of unfunded benefit liabilities" (as defined under ERISA). Neither the
Company, the Subsidiaries nor any of their ERISA Affiliates has incurred or
reasonably expects to incur any liability under (i) Title IV of ERISA with
respect to termination of, or withdrawal from, any "employee benefit plan" or
(ii) Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company, its Subsidiaries or any of their ERISA
Affiliates that is intended to be qualified under Section 401(a) of the Code is
so qualified and nothing has occurred, whether by action or failure to act,
which would cause the loss of such qualification.
4. CERTAIN COVENANTS OF THE COMPANY. The Company hereby
agrees:
(a) to furnish such information as may be required and otherwise to
cooperate in qualifying the Shares for offering and sale under the securities or
blue sky laws of such states as you may designate and to maintain such
qualifications in effect so long as required for the distribution of the Shares;
PROVIDED that the Company shall not be required to qualify as a foreign
corporation or to consent to the service of process under the laws of any such
state (except service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of any
notification with respect to the suspension of the qualification of the Shares
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose;
(b) to make available to the Underwriters in New York City, as soon as
practicable after the Registration Statement becomes effective, and thereafter
from time to time to furnish to the Underwriters, as many copies of the
Prospectus (or of the Prospectus as amended or supplemented if the Company shall
have made any amendments or supplements thereto after the effective date of the
Registration Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver a
prospectus within the nine-month period referred to in Section 10(a)(3) of the
Act in connection with the sale of the Shares, the Company will prepare promptly
upon request, but at the expense of such Underwriter, such amendment or
amendments to the Registration Statement and such prospectuses as may be
necessary to permit compliance with the requirements of Section 10(a)(3) of the
Act;
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(c) to advise you promptly and (if requested by you) to confirm such
advice in writing, (i) when the Registration Statement has become effective and
when any post-effective amendment thereto becomes effective and (ii) if Rule
430A under the Act is used, when the Prospectus is filed with the Commission
pursuant to Rule 424(b) under the Act (which the Company agrees to file in a
timely manner under such Rules);
(d) to advise you promptly, confirming such advice in writing, of any
request by the Commission for amendments or supplements to the Registration
Statement or Prospectus or for additional information with respect thereto, or
of notice of institution of proceedings for, or the entry of a stop order
suspending the effectiveness of the Registration Statement and, if the
Commission should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the lifting or
removal of such order as soon as possible; to advise you promptly of any
proposal to amend or supplement the Registration Statement or Prospectus
including by filing any documents that would be incorporated therein by
reference and to file no such amendment or supplement to which you shall object
in writing;
(e) to file promptly all reports and any definitive proxy or
information statement required to be filed by the Company with the Commission in
order to comply with the Exchange Act subsequent to the date of the Prospectus
and for so long as the delivery of a prospectus is required in connection with
the offering or sale of the shares, and to promptly notify you of such filing;
(f) if necessary or appropriate, to file a registration statement
pursuant to Rule 462(b) under the Act;
(g) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement (i)
copies of any reports or other communications which the Company shall send to
its stockholders or shall from time to time publish or publicly disseminate,
(ii) copies of all annual, quarterly and current reports filed with the
Commission on Forms 10-K, 10-Q and 8-K, or such other similar form as may be
designated by the Commission, (iii) copies of documents or reports filed with
any national securities exchange on which any class of securities of the Company
is listed, and (iv) such other information as you may reasonably request
regarding the Company or its Subsidiaries, in each case as soon as such
communications, documents or information becomes available;
(h) to advise the Underwriters promptly of the happening of any event
known to the Company within the time during which a Prospectus relating to the
Shares is required to be delivered under the Act which, in the judgment of the
Company, would require the making of any change in the Prospectus then being
used, or in the information incorporated therein by reference, so that the
Prospectus would not include an untrue statement of material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading, and, during such
time, to prepare and furnish, at the Company's expense, to the Underwriters
promptly such amendments or supplements to such Prospectus as may be necessary
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to reflect any such change and to furnish you a copy of such proposed amendment
or supplement before filing any such amendment or supplement with the
Commission;
(i) to make generally available to its security holders, and to deliver
to you, an earnings statement of the Company (which will satisfy the provisions
of Section 11(a) of the Act) covering a period of twelve months beginning after
the effective date of the Registration Statement (as defined in Rule 158(c) of
the Act) as soon as is reasonably practicable after the termination of such
twelve-month period but not later than May 30, 2001;
(j) for so long as the Company is subject to the Exchange Act, to
furnish to its shareholders as soon as practicable after the end of each fiscal
year an annual report including a balance sheet and statements of income,
shareholders' equity and of cash flow of the Company for such fiscal year,
accompanied by a copy of the certificate or report thereon of nationally
recognized independent certified public accountants;
(k) to furnish to you three signed copies of the Registration
Statement, as initially filed with the Commission, and of all amendments thereto
(including all exhibits thereto and documents incorporated by reference therein)
and sufficient conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters;
(l) to furnish to you as early as practicable prior to the time of
purchase and the additional time of purchase, as the case may be, but not later
than two business days prior thereto, a copy of the latest available unaudited
interim consolidated financial statements, if any, of the Company and its
Subsidiaries which have been read by the Company's independent certified public
accountants, as stated in their letter to be furnished pursuant to Section 8(c)
hereof;
(m) to apply the net proceeds from the sale of the Shares in the manner
set forth under the caption "Use of Proceeds" in the Prospectus;
(n) to furnish to you, before filing with the Commission subsequent to
the effective date of the Registration Statement and during the period referred
to in paragraph (f) above, a copy of any document proposed to be filed pursuant
to Section 13, 14 or 15(d) of the Exchange Act;
(o) not to sell, offer or agree to sell, contract to sell, grant any
option to sell or otherwise dispose of, directly or indirectly, any shares of
Common Stock or securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock or any other
Securities of the Company that are substantially similar to Common Stock or
permit the registration under the Act of any shares of Common Stock, except for
the registration of the Shares and the sales to the Underwriters pursuant to
this Agreement and except for issuances of Common Stock upon the exercise of
outstanding options, warrants and convertible preferred stock and routine
issuances of shares under the Company's Employee Stock Purchase Plan and routine
option grants under the Company's Equity Incentive Plan , for a period of 90
days after the
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date hereof, without the prior written consent of Warburg Dillon Read LLC
("WDR"), which consent shall not be unreasonably withheld;
(p) to use its best efforts to cause the Common Stock to be listed for
quotation on the National Association of Securities Dealers Automated Quotation
National Market System ("NASDAQ"); and
(q) to pay all expenses, fees and taxes (other than any transfer taxes
and fees and disbursements of counsel for the Underwriters except as set forth
under Section 5 hereof or (iii) or (iv) below) in connection with (i) the
preparation and filing of the Registration Statement, each Preliminary
Prospectus, the Prospectus, and any amendments or supplements thereto, and the
printing and furnishing of copies of each thereof to the Underwriters and to
dealers (including costs of mailing and shipment), (ii) the issuance, sale and
delivery of the Shares by the Company, (iii) printing of this Agreement, any
Agreement Among Underwriters, any dealer agreements, any Statements of
Information if requested by you and the reproduction and/or printing and
furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (iv) the qualification of the Shares
for offering and sale under state laws and the determination of their
eligibility for investment under state law as aforesaid (including the legal
fees and filing fees and other disbursements of counsel to the Underwriters) and
the printing and furnishing of copies of any blue sky surveys or legal
investment surveys to the Underwriters and to dealers, (v) any listing of the
Shares on any securities exchange or qualification of the Shares for quotation
on NASDAQ and any registration thereof under the Exchange Act, (vi) the filing
for review of the public offering of the Shares by the NASD, and (vii) the
performance of the Company's other obligations hereunder.
5. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the Shares are
not delivered for any reason other than the termination of this Agreement
pursuant to Section 7 hereof or the default by one or more of the Underwriters
in its or their respective obligations hereunder, the Company shall, in addition
to paying the amounts described in Section 4(q) hereof, reimburse the
Underwriters for all of their out-of-pocket expenses, including the fees and
disbursements of their counsel.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company on the date hereof and
at the time of purchase (and the several obligations of the Underwriters at the
additional time of purchase are subject to the accuracy of the representations
and warranties on the part of the Company on the date hereof and at the time of
purchase (unless previously waived) and at the additional time of purchase, as
the case may be), the performance by the Company of its obligations hereunder
and to the following additional conditions precedent:
(a) The Company shall furnish to you at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of ▇▇▇▇▇▇ & Dodge,
LLP, counsel for the Company, addressed to the Underwriters, and dated the time
of purchase or the additional time of purchase, as the case may be, with
reproduced copies for each of the other Underwriters and in form
-15-
reasonably satisfactory to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
("Mintz ▇▇▇▇▇"), counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of The Commonwealth of
Massachusetts, with full corporate power and authority to own, lease and operate
its properties and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this Agreement and to
issue, sell and deliver the Shares as herein contemplated;
(ii) each of the Wholly Owned Subsidiaries which is organized under the
laws of a state in the United States other than Health and Science Research
Incorporated and International Drug Development Corporation, which are inactive,
(the "Domestic Subsidiaries") is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation with full corporate
power and authority to own, lease and operate its properties and to conduct its
business; ATIII is validly existing as a limited liability company in good
standing under the laws of the State of Delaware with full power and authority
to own, lease and operate its properties and to conduct its business;
(iii) this Agreement has been duly authorized, executed and delivered
by the Company;
(iv) the Shares have been duly authorized and, when issued and
delivered to and paid for by the Underwriters, will be duly and validly issued
and will be fully paid and non-assessable;
(v) the Company has an authorized capitalization as set forth in the
line item "Stockholders' equity" under the heading "Capitalization" in the
Registration Statement and the Prospectus; the outstanding shares of capital
stock of the Company have been duly and validly authorized and issued, and are
fully paid, nonassessable and free of statutory preemptive rights and
contractual preemptive rights known to us; the Shares when issued will be free
of statutory and, to the best of our knowledge, contractual preemptive rights,
rights of first refusal and similar rights created by the Company; the
certificates for the Shares are in due and proper form and the holders of the
Shares will not be subject to personal liability by reason of being such
holders;
(vi) to the best of our knowledge, other than the Subsidiaries, the
Company does not own or control, directly or indirectly, any corporation,
association or other entity; all of the outstanding shares of capital stock of
each of the Domestic Subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable (provided such counsel need express no opinion
with respect to Domestic Subsidiaries organized under jurisdictions other than
Massachusetts and Delaware) and, except as otherwise stated in the Registration
Statement and in Section 3(d) of this Agreement, are owned by the Company and,
to the best of our knowledge, are subject to no security interest, other
encumbrance or adverse claim except as disclosed in Section 3(d) above; all of
the outstanding membership interests of ATIII have been duly authorized and
validly issued and 50% of such membership interests are owned by each of the
Company and Genzyme Corporation, to the best of our knowledge subject to no
security interest, other encumbrance or adverse claim; to the best of such
counsel's knowledge, no options,
-16-
warrants or other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligation into shares of capital stock or
ownership interests in the Domestic Subsidiaries are outstanding;
(vii) the capital stock of the Company, including the Shares, conforms
to the description thereof incorporated by reference into the Registration
Statement and Prospectus;
(viii) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act;
(ix) the Registration Statement has become effective under the Act and,
to the best of such counsel's knowledge, no stop order proceedings with respect
thereto are pending or threatened under the Act and any required filing of the
Prospectus and any supplement thereto pursuant to Rule 424 under the Act has
been made in the manner and within the time period required by such Rule 424;
(x) no approval, authorization, consent or order of or filing with any
national, state or local governmental or regulatory commission, board, body,
authority or agency is required in connection with the issuance and sale of the
Shares and consummation by the Company of the transaction as contemplated hereby
other than registration of the Shares under the Act (except such counsel need
express no opinion as to any necessary qualification under the state securities
or blue sky laws of the various jurisdictions in which the Shares are being
offered by the Underwriters);
(xi) the execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby do not and will not conflict with, or result in any breach of, or
constitute a default under (nor constitute any event which with notice, lapse of
time, or both, would result in any breach of or constitute a default under), any
provisions of the charter or by-laws of the Company or any of its Domestic
Subsidiaries (provided such counsel need express no opinion with respect to
Domestic Subsidiaries organized under jurisdictions other than Massachusetts and
Delaware) or under any provision of any license, indenture, mortgage, deed of
trust, bank loan, credit agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument known to such counsel to which
the Company or any of its Domestic Subsidiaries is a party or by which any of
them or their respective properties may be bound or affected, or under any
federal, state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company or any of its Domestic Subsidiaries;
(xii) to the best of such counsel's knowledge, neither the Company nor
any of its Domestic Subsidiaries is in violation of its charter or by-laws or
certificate of formation or operating agreement, as the case may be, or is in
breach of, or in default under (nor has any event occurred which with notice,
lapse of time, or both would result in any breach of, or constitute a default
under), any license, indenture, mortgage, deed of trust, bank loan or any other
agreement or instrument known to such counsel to
-17-
which the Company or any of its Domestic Subsidiaries is a party or by which any
of them or their respective properties may be bound or affected or under any
federal, state, local or foreign law, regulation or rule or any decree, judgment
or order applicable to the Company or any of its Domestic Subsidiaries;
(xiii) to the best of such counsel's knowledge, there are no contracts,
licenses, agreements, leases or documents of a character which are required to
be filed as exhibits to the Registration Statement or to be summarized or
described in the Prospectus which have not been so filed, summarized or
described;
(xiv) to the best of such counsel's knowledge, there are no actions,
suits, claims, investigations or proceedings pending, threatened or contemplated
to which the Company or any of its Domestic Subsidiaries is subject or of which
any of their respective properties, is subject at law or in equity or before or
by any federal, state, local or foreign governmental or regulatory commission,
board, body, authority or agency which are required to be described in the
Prospectus but are not so described;
(xv) the documents incorporated by reference in the Registration
Statement and Prospectus, when they were filed (or, if an amendment with respect
to any such document was filed when such amendment was filed) with the
Commission, complied as to form in all material respects with the Exchange Act
(except as to the financial statements and schedules and other financial and
statistical data contained or incorporated by reference therein as to which such
counsel need express no opinion); and
(xvi) the Company will not, upon consummation of the transactions
contemplated by this Agreement, be an "investment company," or a "promoter" or
"principal underwriter" for, a "registered investment company," as such terms
are defined in the Investment Company Act of 1940, as amended.
Such counsel shall also state that they have participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants of the Company and
representatives of the Underwriters at which the contents of the Registration
Statement and Prospectus were discussed and, although such counsel is not
passing upon and does not assume responsibility for the accuracy, completeness
or fairness of the statements contained in the Registration Statement or
Prospectus (except as and to the extent stated in subparagraphs (v) and (vii)
above), on the basis of the foregoing (relying as to materiality to a large
extent upon the opinions of officers and other representatives of the Company),
no facts have come to the attention of such counsel that causes them to believe
that the Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective 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, or
that the Prospectus or any supplement thereto at the date of such Prospectus or
such supplement, and at all times up to and including the time of purchase or
additional time of purchase, as the case may be, 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, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no
-18-
comment with respect to the financial statements and schedules and other
financial and statistical data included in the Registration Statement or
Prospectus).
(b) The Company shall furnish to you at the time of purchase and at the
additional time of purchase, as the case may be, an opinion of Fish &
▇▇▇▇▇▇▇▇▇▇, P.C., intellectual property counsel for the Company, addressed to
the Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the other
Underwriters and in form satisfactory to ▇▇▇▇▇ ▇▇▇▇▇, counsel for the
Underwriters in substantially the form of Exhibit A-1 attached hereto.
(c) You shall have received from PricewaterhouseCoopers LLP, letters
dated, respectively, the date of this Agreement and the time of purchase and
additional time of purchase, as the case may be, and addressed to the
Underwriters (with reproduced copies for each of the Underwriters) in the forms
heretofore approved by WDR.
(d) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the favorable opinion of ▇▇▇▇▇
▇▇▇▇▇, counsel for the Underwriters, dated the time of purchase or the
additional time of purchase, as the case may be, as to the matters referred to
in subparagraphs (iii), (iv), (vii) (with respect to the Shares only), (viii)
and (ix) of paragraph (a) of this Section 6.
In addition, such counsel shall state that such counsel have
participated in conferences with officers and other representatives of the
Company, counsel for the Company, representatives of the independent public
accountants of the Company and representatives of the Underwriters at which the
contents of the Registration Statement and Prospectus and related matters were
discussed and, although such counsel is not passing upon and does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement and Prospectus (except as to matters
referred to with respect to the Shares under subparagraph (vii) of paragraph (a)
of this Section 6), on the basis of the foregoing (relying as to materiality to
a large extent upon the opinions of officers and other representatives of the
Company), no facts have come to the attention of such counsel which lead them to
believe that the Registration Statement or any amendment thereto at the time
such Registration Statement or amendment became effective 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 or
that the Prospectus as of its date or any supplement thereto as of its date
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,
in light of the circumstances under which they were made, not misleading (it
being understood that such counsel need express no comment with respect to the
financial statements and schedules and other financial and statistical data
included in the Registration Statement or Prospectus).
-19-
(e) No amendment or supplement to the Registration Statement or
Prospectus, including documents deemed to be incorporated by reference therein,
shall be filed prior to the time the Registration Statement becomes effective to
which you object in writing.
(f) The Registration Statement shall become effective, or if Rule 430A
under the Act is used, the Prospectus shall have been filed with the Commission
pursuant to Rule 424(b) under the Act, at or before 5:00 P.M., New York City
time, on the date of this Agreement, unless a later time (but not later than
5:00 P.M., New York City time, on the second full business day after the date of
this Agreement) shall be agreed to by the Company and you in writing or by
telephone, confirmed in writing; PROVIDED, HOWEVER, that the Company and you and
any group of Underwriters, including you, who have agreed hereunder to purchase
in the aggregate at least 50% of the Firm Shares may from time to time agree on
a later date.
(g) Prior to the time of purchase or the additional time of purchase,
as the case may be, (i) no stop order with respect to the effectiveness of the
Registration Statement shall have been issued under the Act or proceedings
initiated under Section 8(d) or 8(e) of the Act; (ii) the Registration Statement
and all amendments thereto, or modifications thereof, if any, shall not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading;
and (iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they are made, not misleading.
(h) Between the time of execution of this Agreement and the time of
purchase or the additional time of purchase, as the case may be, (i) no material
and unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the business, condition or prospects
of the Company and its Subsidiaries taken as a whole shall occur or become known
and (ii) no transaction which is material and unfavorable to the Company shall
have been entered into by the Company or any of its Subsidiaries.
(i) The Company will, at the time of purchase or additional time of
purchase, as the case may be, deliver to you a certificate of two of its
executive officers to the effect that the representations and warranties of the
Company as set forth in this Agreement are true and correct as of each such
date, that the Company shall perform such of its obligations under this
Agreement as are to be performed at or before the time of purchase and at or
before the additional time of purchase, as the case may be and the conditions
set forth in paragraphs (g) and (h) of this Section 6 have been met.
(j) You shall have received signed letters, dated the date of this
Agreement, from each of the directors and executive officers of the Company and
Genzyme Corporation to the effect that such persons shall not sell, offer or
agree to sell, contract to sell, grant any option to sell or
-20-
otherwise dispose of, directly or indirectly, any shares of Common Stock of the
Company or securities convertible into or exchangeable or exercisable for Common
Stock or warrants or other rights to purchase Common Stock or any other
securities of the Company that are substantially similar to the Common Stock for
a period of 90 days after the date of the Prospectus without WDR's prior written
consent.
(k) The Company shall have furnished to you such other documents and
certificates as to the accuracy and completeness of any statement in the
Registration Statement and the Prospectus as of the time of purchase and the
additional time of purchase, as the case may be, as you may reasonably request.
(l) The Shares shall have been approved for listing for quotation on
NASDAQ, subject only to notice of issuance at or prior to the time of purchase
or the additional time of purchase, as the case may be.
(m) Between the time of execution of this Agreement and the time of
purchase or additional time of purchase, as the case may be, there shall not
have occurred any downgrading, nor shall any notice or announcement have been
given or made of (i) any intended or potential downgrading or (ii) any review or
possible change that does not indicate an improvement, in the rating accorded
any securities of or guaranteed by the Company or any Subsidiary by any
"nationally recognized statistical rating organization", as that term is defined
in Rule 436(g)(2) under the Act.
7. EFFECTIVE DATE OF AGREEMENT; TERMINATION. This Agreement
shall become effective (i) if Rule 430A under the Act is not used, when you
shall have received notification of the effectiveness of the Registration
Statement, or (ii) if Rule 430A under the Act is used, when the parties hereto
have executed and delivered this Agreement.
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, if, since the time of execution of
this Agreement or the respective dates as of which information is given in the
Registration Statement and Prospectus, (a) there has been any material adverse
and unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the operations, business, condition
or prospects of the Company and its Subsidiaries taken as a whole, which would,
in your judgment or in the judgment of such group of Underwriters, make it
impracticable to market the Shares, or (b) there shall have occurred any
downgrading, or any notice shall have been given of (i) any intended or
potential downgrading or (ii) any review or possible change that does not
indicate an improvement, in the rating accorded any securities of or guaranteed
by the Company or any Subsidiary by any "nationally recognized statistical
rating organization", as that term is defined in Rule 436(g)(2) under the Act
or, (c) trading in securities on the New York Stock Exchange, the American Stock
Exchange or the NASDAQ National Market shall have been suspended or limitations
or (d) minimum prices shall have been established on the New York Stock
Exchange, the American Stock Exchange or the NASDAQ National Market or (e) a
-21-
banking moratorium shall have been declared either by the United States or New
York State authorities, or (f) the United States shall have declared war in
accordance with its constitutional processes or there shall have occurred any
material outbreak or escalation of hostilities or other national or
international calamity or crisis of such magnitude in its effect on the
financial markets of the United States as, in your judgment or in the judgment
of such group of Underwriters, to make it impracticable to market the Shares.
If you or any group of Underwriters elects to terminate this
Agreement as provided in this Section 7, the Company and each other Underwriter
shall be notified promptly by letter or telegram.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company shall be unable to comply with any of the terms of this Agreement, the
Company shall not be under any obligation or liability under this Agreement
(except to the extent provided in Sections 4(q), 5 and 9 hereof), and the
Underwriters shall be under no obligation or liability to the Company under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. INCREASE IN UNDERWRITERS' COMMITMENTS. Subject to Sections
6 and 7, if any Underwriter shall default in its obligation to take up and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for reasons
sufficient to justify the termination of this Agreement under the provisions of
Section 7 hereof) and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to take up and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
take up and pay for (in addition to the number of Firm Shares they are obligated
to purchase pursuant to Section 1 hereof) the number of Firm Shares agreed to be
purchased by all such defaulting Underwriters, as hereinafter provided. Such
Shares shall be taken up and paid for by such non-defaulting Underwriter or
Underwriters in such amount or amounts as you may designate with the consent of
each Underwriter so designated or, in the event no such designation is made,
such Shares shall be taken up and paid for by all non-defaulting Underwriters
pro rata in proportion to the aggregate number of Firm Shares set opposite the
names of such non-defaulting Underwriters in Schedule A.
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company agrees with the non-defaulting Underwriters
that they will not sell any Firm Shares hereunder unless all of the Firm Shares
are purchased by the Underwriters (or by substituted Underwriters selected by
you with the approval of the Company or selected by the Company with your
approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company for a defaulting Underwriter or Underwriters in
accordance with the foregoing provision, the Company or you shall have the right
to postpone the time of purchase for a period not exceeding five business days
in order that any necessary changes in the Registration Statement and Prospectus
and other documents may be effected.
-22-
The term Underwriter as used in this agreement shall refer to
and include any Underwriter substituted under this Section 8 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Shares which all Underwriters agreed to purchase hereunder, and if neither
the non-defaulting Underwriters nor the Company shall make arrangements within
the five business day period stated above for the purchase of all the Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall be terminated without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter and
without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph, and no action taken hereunder, shall relieve
any defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
9. INDEMNITY AND CONTRIBUTION.
(a) The Company agrees to indemnify, defend and hold harmless
each Underwriter, its partners, directors and officers, and any person who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and the successors and assigns of all of the foregoing
persons from and against any loss, damage, expense, liability or claim
(including the reasonable cost of investigation) which, jointly or severally,
any such Underwriter or any such person may incur under the Act, the Exchange
Act, the common law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company) or in a Prospectus (the term Prospectus for
the purpose of this Section 9 being deemed to include any Preliminary
Prospectus, the Prospectus and the Prospectus as amended or supplemented by the
Company), or arises out of or is based upon any omission or alleged omission to
state a material fact required to be stated in either such Registration
Statement or Prospectus or necessary to make the statements made therein not
misleading, except insofar as any such loss, damage, expense, liability or claim
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in and in conformity with information furnished in
writing by or on behalf of any Underwriter through you to the Company expressly
for use with reference to such Underwriter in such Registration Statement or
such Prospectus or arises out of or is based upon any omission or alleged
omission to state a material fact in connection with such information required
to be stated in either such Registration Statement or Prospectus or necessary to
make such information not misleading, PROVIDED, HOWEVER, that the indemnity
agreement contained in this subsection (a) with respect to any Preliminary
Prospectus or amended Preliminary Prospectus shall not inure to the benefit of
any Underwriter (or to the benefit of any person controlling such Underwriter)
from whom the person asserting any such loss, damage, expense, liability or
claim purchased the Shares which is the subject thereof if the Prospectus
corrected any such alleged untrue
-23-
statement or omission and if such Underwriter failed to send or give a copy of
the Prospectus to such person at or prior to the written confirmation of the
sale of such Shares to such person.
If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Company pursuant to the foregoing paragraph,
such Underwriter or such person shall promptly notify the Company in writing of
the institution of such Proceeding and the Company shall assume the defense of
such Proceeding, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses; PROVIDED, HOWEVER,
that the omission to so notify the Company shall not relieve the Company from
any liability which the Company may have to any Underwriter or any such person
or otherwise. Such Underwriter or such controlling person shall have the right
to employ its or their own counsel in any such case, but the fees and expenses
of such counsel shall be at the expense of such Underwriter or of such person
unless the employment of such counsel shall have been authorized in writing by
the Company in connection with the defense of such Proceeding or the Company
shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded that there
may be defenses available to it or them which are different from, additional to
or in conflict with those available to the Company (in which case the Company
shall not have the right to direct the defense of such Proceeding on behalf of
the indemnified party or parties but the Company may employ counsel and
participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of the Company), in any of which events such fees and
expenses shall be borne by the Company, as the case may be, and paid as incurred
(it being understood, however, that the Company shall not be liable for the
expenses of more than one separate counsel (in addition to any local counsel) in
any one Proceeding or series of related Proceedings in the same jurisdiction
representing the indemnified parties who are parties to such Proceeding). The
Company shall not be liable for any settlement of any such Proceeding effected
without its written consent but if settled with the written consent of the
Company, the Company agrees to indemnify and hold harmless any Underwriter and
any such person from and against any loss or liability by reason of such
settlement. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by the second
sentence of this paragraph, then the indemnifying party agrees that it shall be
liable for any settlement of any Proceeding effected without its written consent
if (i) such settlement is entered into more than 60 business days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement and (iii) such indemnified party
shall have given the indemnifying party at least 30 days' prior notice of its
intention to settle. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened Proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such Proceeding and does not include an admission of fault, culpability or a
failure to act, by or on behalf of such indemnified party.
-24-
(b) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers and any person who
controls the Company within the meaning of Section 15 of the Act, or Section 20
of the Exchange Act from and against any loss, damage, expense, liability or
claim (including the reasonable cost of investigation) which, jointly or
severally, the Company or any such person may incur under the Act, the Exchange
Act, or Common Law or otherwise, insofar as such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of such Underwriter through you
to the Company expressly for use with reference to such Underwriter in the
Registration Statement (or in the Registration Statement as amended by or on
behalf of any post-effective amendment thereof by the Company) or in a
Prospectus, or arises out of or is based upon any omission or alleged omission
to state a material fact in connection with such information required to be
stated in such Registration Statement or Prospectus or necessary to make such
information not misleading.
If any Proceeding is brought against the Company or any such
person in respect of which indemnity may be sought against any Underwriter
pursuant to the foregoing paragraph, the Company or such person shall promptly
notify such Underwriter in writing of the institution of such Proceeding and
such Underwriter shall assume the defense of such Proceeding, including the
employment of counsel reasonably satisfactory to such indemnified party and
payment of all fees and expenses, PROVIDED, HOWEVER, that the omission to so
notify such Underwriter shall not relieve such Underwriter, from any liability
which such Underwriter may have to the Company or any such person or otherwise.
The Company or such person shall have the right to employ its own counsel in any
such case, but the fees and expenses of such counsel shall be at the expense of
the Company or such person unless the employment of such counsel shall have been
authorized in writing by such Underwriter in connection with the defense of such
Proceeding or such Underwriter shall not have within a reasonable period in
light of the circumstances employed counsel to have charge of the defense of
such Proceeding or such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it or them which are different
from or additional to or in conflict with those available to such Underwriter
(in which case such Underwriter shall not have the right to direct the defense
of such Proceeding on behalf of the indemnified party or parties, but such
Underwriter may employ counsel and participate in the defense thereof but the
fees and expenses of such counsel shall be at the expense of such Underwriter),
in any of which events such fees and expenses shall be borne by such Underwriter
and paid as incurred (it being understood, however, that such Underwriter shall
not be liable for the expenses of more than one separate counsel (in addition to
any local counsel) in any one Proceeding or series of related Proceedings in the
same jurisdiction representing the indemnified parties who are parties to such
Proceeding). No Underwriter shall be liable for any settlement of any such
Proceeding effected without the written consent of such Underwriter but if
settled with the written consent of such Underwriter, such Underwriter agrees to
indemnify and hold harmless the Company and any such person from and against any
loss or liability by reason of such settlement. Notwithstanding the foregoing
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel as contemplated by the second sentence of this paragraph, then the
indemnifying
-25-
party agrees that it shall be liable for any settlement of any Proceeding
effected without its written consent if (i) such settlement is entered into more
than 60 business days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall not have reimbursed the indemnified
party in accordance with such request prior to the date of such settlement and
(iii) such indemnified party shall have given the indemnifying party at least 30
days' prior notice of its intention to settle. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding and does not include an admission
of fault, culpability or a failure to act, by or on behalf of such indemnified
party.
(c) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a) and (b) of this
Section 9 in respect of any losses, damage, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the 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 on the one
hand and of the Underwriters on the other in connection with the statements or
omissions which resulted in such losses, damages, expenses, liabilities or
claims, as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Underwriters on the
other shall be deemed to be in the same respective proportion as the total
proceeds from the offering (net of underwriting discounts and commissions but
before deducting expenses) received by the Company and the total underwriting
discounts and commissions received by the Underwriters, bear to the aggregate
public offering price of the Shares. The relative fault of the Company on the
one hand and of the Underwriters on the other shall be determined by reference
to, among other things, whether the untrue statement or alleged untrue statement
of a material fact or omission or alleged omission relates to information
supplied by the Company or by the Underwriters 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, damages, expenses, liabilities and claims referred to in this subsection
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such party in connection with investigating, preparing to defend or
defending any claim or Proceeding.
(d) The Company and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this Section 9 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in subsection (c) above.
-26-
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by such Underwriter and distributed to
the public were offered to the public exceeds the amount of any damage which
such Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. 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 Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(e) The indemnity and contribution agreements contained in
this Section 9 and the covenants, warranties and representations of the Company
contained in this Agreement shall remain in full force and effect regardless of
any investigation made by or on behalf of any Underwriter, its directors and
officers or any person (including each partner, officer or director of such
person) who controls any Underwriter within the meaning of Section 15 of the Act
or Section 20 of the Exchange Act, or by or on behalf of the Company, its
directors or officers or any person who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, and shall survive
any termination of this Agreement or the issuance and delivery of the Shares.
The Company and each Underwriter agree promptly to notify each other
commencement of any Proceeding against it and, in the case of the Company,
against any of the Company's officers or directors in connection with the
issuance and sale of the Shares, or in connection with the Registration
Statement or Prospectus.
10. NOTICES. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to Warburg Dillon Read LLC, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇,
Attention: Syndicate Department, if to the Company, shall be sufficient in all
respects if delivered or sent to the Company at the offices of the Company at
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: PRESIDENT .
11. GOVERNING LAW; CONSTRUCTION. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
12. SUBMISSION TO JURISDICTION. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and the
Company consents to the jurisdiction of such courts and personal service with
respect thereto. The Company hereby
-27-
consents to personal jurisdiction, service and venue in any court in which any
Claim arising out of or in any way relating to this Agreement is brought by any
third party against Warburg Dillon Read LLC or any indemnified party. Each of
Warburg Dillon Read LLC and the Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and affiliates)
waives all right to trial by jury in any action, proceeding or counterclaim
(whether based upon contract, tort or otherwise) in any way arising out of or
relating to this Agreement. The Company agrees that a final judgment in any such
action, proceeding or counterclaim brought in any such court shall be conclusive
and binding upon the Company and may be enforced in any other courts in the
jurisdiction of which the Company is or may be subject, by suit upon such
judgment.
13. PARTIES AT INTEREST. The Agreement herein set forth has
been and is made solely for the benefit of the Underwriters, the Company and to
the extent provided in Section 11 hereof the controlling persons, directors and
officers referred to in such Section, and their respective successors, assigns,
heirs, pursuant representatives and executors and administrators. No other
person, partnership, association or corporation (including a purchaser, as such
purchaser, from any of the Underwriters) shall acquire or have any right under
or by virtue of this Agreement.
14. COUNTERPARTS. This Agreement may be signed by the parties
in one or more counterparts which together shall constitute one and the same
agreement among the parties.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon the Underwriters and the Company and their successors and assigns and any
successor or assign of any substantial portion of the Company's and any of the
Underwriters' respective businesses and/or assets.
16. MISCELLANEOUS. Warburg Dillon Read LLC, an indirect,
wholly owned subsidiary of UBS AG, is not a bank and is separate from any
affiliated bank, including any U.S. branch or agency of Warburg Dillon Read LLC.
Because Warburg Dillon Read LLC is a separately incorporated entity, it is
solely responsible for its own contractual obligations and commitments,
including obligations with respect to sales and purchases of securities.
Securities sold, offered or recommended by Warburg Dillon Read LLC are not
deposits, are not insured by the Federal Deposit Insurance Corporation, are not
guaranteed by a branch or agency, and are not otherwise an obligation or
responsibility of a branch or agency.
A lending affiliate of Warburg Dillon Read LLC may have
lending relationships with issuers of securities underwritten or privately
placed by Warburg Dillon Read LLC. To the extent required under the securities
laws, prospectuses and other disclosure documents for securities underwritten or
privately placed by Warburg Dillon Read LLC will disclose the existence of any
such lending relationships and whether the proceeds of the issue will be used to
repay debts owed to affiliates of Warburg Dillon Read LLC.
-28-
If the foregoing correctly sets forth the understanding among
the Company and the Underwriters, please so indicate in the space provided below
for the purpose, whereupon this letter and your acceptance shall constitute a
binding agreement among the Company and the Underwriters, severally.
Very truly yours,
GENZYME TRANSGENICS CORPORATION
By:__________________________________
Title:
Accepted and agreed to as of the date first
above written, on behalf of themselves and
the other several Underwriters named in
Schedule A
WARBURG DILLON READ LLC
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
By: WARBURG DILLON READ LLC
By:
-----------------------------------
Title:
By:
-----------------------------------
Title:
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
WARBURG DILLON READ LLC
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLC
-----------
Total............................................ 3,500,000
===========
EXHIBIT A-1
FORM OF OPINION OF INTELLECTUAL PROPERTY COUNSEL FOR THE COMPANY
Form of Opinion of Fish & ▇▇▇▇▇▇▇▇▇▇, intellectual property counsel ("Counsel"),
for the Company pursuant to Section 6(b) of the Underwriting Agreement.
1. For the purpose of this opinion, the terms "know," "known," or
"knowledge" refer to the actual knowledge of Counsel, as well as the knowledge
arising from Counsel's review of documents and materials relevant to the matters
addressed in such paragraphs, and the knowledge arising from Counsel's inquiry
of any employee or officer of the Company familiar with a matter to which
Counsel's opinion pertains.
2. All patents and pending patent applications ("Patents") that are
owned by or licensed to the Company and known to Counsel, and all contracts
known to Counsel pursuant to which the Company has, or has granted, rights to
any Patents, are listed in Schedule A. We have formed this opinion based on the
guidelines set out in 1. above and note that no searches have been conducted to
identify patents owned in whole or in part by the Company nor to determine
record title in the United States Patent and Trademark Office ("USPTO"). All
patents that are known to Counsel to have been licensed by the Company and which
are known to Counsel by Patent number are listed in Schedule A and if not known
to Counsel by Patent number are identified as Patents licensed under a contract
under the entry in Schedule A for that contract. Fish & ▇▇▇▇▇▇▇▇▇▇ is not
trademark counsel to the Company, has not conducted searches with regard to
trademarks, and knows of no trademarks or pending trademark applications
("Trademarks") that are owned by or licensed to the Company or contracts
pursuant to which the Company has, or has granted, rights to any Trademarks. We
are not aware of any registered domain names or pending domain name
registrations ("Domain Names") that are owned or licensed to the Company or
contracts pursuant to which the Company has, or has granted, rights to any
Domain Names. To the best of Counsel's knowledge, no searches having been done
with regard thereto, the Company has not applied for any copyright
registrations, and Counsel is not aware of any copyrights or pending copyright
applications ("Copyrights") that are owned by or licensed to the Company, nor of
any contracts pursuant to which the Company has, or has granted, rights to any
Copyrights.
3. Based upon Counsel's (a) inquiry of the Company's representatives
responsible for Patent and Domain Name matters and (b) review of our files, (i)
the Patents have been validly assigned in the United States to the Company (or
as indicated in Schedule A are under obligation to be assigned to the Company)
and (ii) except as provided in Schedule A , the Company is listed as the sole
holder of record in the United States of each of the Patents, and Counsel knows
of no claims of third parties to any ownership interest in, or to any lien with
respect to, any of the Patents. Except as provided in Schedule A, Counsel knows
of no actual or asserted nonjoined or misjoined inventorship interest in any of
the Patents. Counsel has no knowledge of any facts that would preclude the
Company from having
-2-
clear title and unencumbered right to the Patents, so that
by virture of such valid assignment to it the Company has the right to enforce
each of the Patents. None of the Patents has been abandoned.
4. To the best of Counsel's knowledge, the Company has complied with
the USPTO duty of candor and disclosure for each of the United States Patents.
No fact has come to Counsel's attention that causes Counsel to question the
enforceability of any of the Patents, or to question the validity of any claim
of an issued patent listed in Schedule A, except as noted in Schedule B. Counsel
knows of no pending action, suit, proceeding or claim by others challenging the
validity or enforceability of any claim of the issued patents listed in Schedule
A, except as noted in Schedule B.
5. To the best of Counsel's knowledge, all legal or governmental
proceedings relating to the Company's Patent, Domain Name and trade secret
rights, other than an EX PARTE USPTO examination proceeding, are listed in
Schedule B, including but not limited to any pending or threatened interference,
opposition, public use, reexamination, reissue, or protest proceeding with
respect to any Patent or to any pending or threatened dispute with respect to
misappropriation of any trade secret by or from the Company, in the United
States or in a foreign jurisdiction.
6. To the best of Counsel's knowledge, the statements in the Prospectus
relating to patent, copyright, domain name, and licensing matters under the
captions "Risk Factors", "Business-Patents and Proprietary Rights" and any other
references in the Prospectus to patent, copyright, domain name, and licensing
matters, insofar as such statements constitute a summary of legal matters,
documents, or proceedings, are accurate and present fairly the matters set forth
therein, and, except as described in the Prospectus, to the best of Counsel's
knowledge there is no pending or threatened action, suit, proceeding or claim by
others that the Company is infringing any patent or any trademark which could
result in any material adverse effect on the Company.
7. Except as described in the Prospectus, Counsel is not aware of any
facts that would form a basis for the belief that the Company lacks any rights
or licenses to use all patents, trademarks, copyrights, domain names, know-how
and other intellectual property necessary to conduct the business now conducted
or proposed to be conducted and known to Counsel by the Company as described in
the Prospectus.
8. No facts have come to Counsel's attention which cause Counsel to
believe that the statements in the Prospectus relating to patent, trademark,
copyright, domain name, trade secret, and licensing matters under the captions
"Risk Factors", "Business-Patents and Proprietary Rights" and any other
references in the Prospectus to patent, trademark, copyright, domain name, trade
secret, and licensing matters, contain an untrue or misleading statement of
material fact, or omit a material fact necessary to make the statements therein
not misleading.
