1
4,000,000 SHARES
GENZYME CORPORATION
GENZYME TISSUE REPAIR DIVISION COMMON STOCK
UNDERWRITING AGREEMENT
October , 1997
Credit Suisse First Boston Corporation
Xxxxx & Company
PaineWebber Incorporated,
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation
Eleven Madison Avenue
New York, N.Y. 10010-3629
Dear Sirs:
1. INTRODUCTORY. Genzyme Corporation, a Massachusetts corporation
("Company"), proposes to issue and sell to the Underwriters named in Schedule A
(the "Underwriters") 4,000,000 shares ("Firm Securities") of Genzyme Tissue
Repair Division Common Stock, par value $.01 per share ("Securities"), and also
proposes to issue and sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than 600,000 additional shares ("Optional
Securities") of its Securities as set forth below. The Firm Securities and the
Optional Securities are herein collectively called the "Offered Securities". The
Company hereby agrees with the several Underwriters as follows:
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) The Company and the proposed offering of the Firm Securities meet
the requirements for use of Form S-3, and a registration statement on Form
S-3 (No. 333-34913) relating to the Offered Securities, including a form of
prospectus, has been filed with the Securities and Exchange Commission
("Commission") and either (i) has been declared effective under the
Securities Act of 1933 ("Act") and is not proposed to be amended or (ii) is
proposed to be amended by amendment or post-effective amend-
2
-2-
ment. If such registration statement ("initial registration statement") has
been declared effective, either (i) an additional registration statement
("additional registration statement") relating to the Offered Securities
may have been filed with the Commission pursuant to Rule 462(b) ("Rule
462(b)") under the Act and, if so filed, has become effective upon filing
pursuant to such Rule and the Offered Securities all have been duly
registered under the Act pursuant to the initial registration statement and
if applicable, the additional registration statement or (ii) such an
additional registration statement may be proposed to be filed with the
Commission pursuant to Rule 462(b) and, if so filed, will become effective
upon filing pursuant to such Rule and upon such filing the Offered
Securities will all have been duly registered under the Act pursuant to the
initial registration statement and such additional registration statement.
If the Company does not propose to amend the initial registration statement
or if an additional registration statement has been filed and the Company
does not propose to amend it and if any post-effective amendment to either
such registration statement has been filed with the Commission prior to the
execution and delivery of this Agreement, the most recent amendment (if
any) to each such registration statement has been declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c)
("Rule 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"Effective Time" with respect to the initial registration statement or, if
filed prior to the execution and delivery of this Agreement, the additional
registration statement means (i) if the Company has advised the
Representatives that it does not propose to amend such registration
statement, the date and time as of which such registration statement, or
the most recent post-effective amendment thereto (if any) filed prior to
the execution and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c), or
(ii) if the Company has advised the Representatives that it proposes to
file an amendment or post-effective amendment to such registration
statement, the date and time as of which such registration statement, as
amended by such amendment or post-effective amendment, as the case may be,
is declared effective by the Commission. If an additional registration
statement has not been filed prior to the execution and delivery of this
Agreement but the Company has advised the Representatives that it proposes
to file one, "Effective Time" with respect to such
3
-3-
additional registration statement means the date and time as of which such
registration statement is filed and becomes effective pursuant to Rule
462(b). "Effective Date" with respect to the initial registration statement
or the additional registration statement (if any) means the date of the
Effective Time thereof. The initial registration statement, as amended at
its Effective Time, including all material incorporated by reference
therein, including all information contained in the additional registration
statement (if any) and deemed to be a part of the initial registration
statement as of the Effective Time of the additional registration statement
pursuant to the General Instructions of Form S-3 and including all
information (if any) deemed to be a part of the initial registration
statement as of its Effective Time pursuant to Rule 430A(b) ("Rule
430A(b)") under the Act, is hereinafter referred to as the "Initial
Registration Statement". The additional registration statement, as amended
at its Effective Time, including the contents of the initial registration
statement and all other information incorporated by reference therein and
including all information (if any) deemed to be a part of the additional
registration statement as of its Effective Time pursuant to Rule 430A(b),
is hereinafter referred to as the "Additional Registration Statement". The
Initial Registration Statement and the Additional Registration Statement
are herein referred to collectively as the "Registration Statements" and
individually as a "Registration Statement". The form of prospectus relating
to the Offered Securities, as first filed with the Commission pursuant to
and in accordance with Rule 424(b) ("Rule 424(b)") under the Act or (if no
such filing is required) as included in a Registration Statement, including
all material incorporated by reference in such prospectus, is hereinafter
referred to as the "Prospectus". No document has been or will be prepared
or distributed in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (i) on the Effective
Date of the Initial Registration Statement, the Initial Registration
Statement conformed in all respects to the requirements of the Act and the
rules and regulations of the Commission ("Rules and Regulations") and did
not include any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) on the Effective Date of the
Additional Registration Statement (if any),
4
-4-
each Registration Statement conformed, or will conform, in all respects to
the requirements of the Act and the Rules and Regulations and did not
include, or will not include, any untrue statement of a material fact and
did not omit, or will not omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading
and (iii) on the date of this Agreement, the Initial Registration Statement
and, if the Effective Time of the Additional Registration Statement is
prior to the execution and delivery of this Agreement, the Additional
Registration Statement each conform, and at the time of filing of the
Prospectus pursuant to Rule 424(b) or (if no such filing is required) at
the Effective Date of the Additional Registration Statement in which the
Prospectus is included, each Registration Statement and the Prospectus will
conform, in all respects to the requirements of the Act and the Rules and
Regulations, and neither of such documents includes, or will include, any
untrue statement of a material fact or omits, or will omit, to state any
material fact required to be stated therein or necessary to make the
statements therein (in the case of the Prospectus, in light of the
circumstances under which they are made) not misleading. If the Effective
Time of the Initial Registration Statement is subsequent to the execution
and delivery of this Agreement: on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement and the
Prospectus will conform in all respects to the requirements of the Act and
the Rules and Regulations, neither of such documents will include any
untrue statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and no Additional Registration Statement has been or will
be filed. The two preceding sentences do not apply to statements in or
omissions from a Registration Statement or the Prospectus in conformity
with written information relating to any Underwriter furnished to the
Company by such Underwriter through the Representatives specifically for
use therein, it being understood and agreed that the only such information
is that described as such in Section 7(b). The documents which are or will
be incorporated by reference in a Registration Statement or the Prospectus
or from which information is or will be so incorporated by reference, when
they became or become effective or were or are filed with the Commission,
as the case may be, complied or will comply in all material respects with
the requirements of the Act or the Securities Exchange Act of 1934, as
amended ("Exchange Act"), the
5
-5-
Rules and Regulations and the rules and regulations under the Exchange Act
("Exchange Act Rules and Regulations"), as applicable.
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the Commonwealth of
Massachusetts, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus; and the
Company is duly licensed or qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
license or qualification, except where the failure to be so licensed or
qualified would not have a material adverse effect on the condition
(financial or otherwise), business, properties, or results of operations of
the Company and the Subsidiaries (as defined below) taken as a whole or of
the Company's Tissue Repair Division ("GTR").
(d) The only "significant subsidiaries" of the Company, as defined in
Rule 1-02(x) of the Commission's Regulation S-X, are the subsidiaries
of the Company listed on Schedule B hereto (the "Subsidiaries"). Each
Subsidiary has been duly incorporated or organized and is existing in good
standing under the laws of the jurisdiction of its incorporation or
formation, with power and authority to own its properties and conduct its
business as described in the Prospectus; and each Subsidiary is duly
licensed or qualified to do business as a foreign corporation or other
entity in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such license
or qualification, except where the failure to be so licensed or qualified
would not have a material adverse effect on the condition (financial or
otherwise), business, properties, or results of operations of the Company
and the Subsidiaries taken as a whole or of GTR; all of the issued and
outstanding capital stock or partnership interest of each Subsidiary has
been duly authorized and validly issued and, with respect to each Corporate
Subsidiary, is fully paid and nonassessable; and the capital stock or
partnership interest of each Subsidiary owned by the Company, directly or
through subsidiaries, is owned free from liens, encumbrances and defects.
(e) The Offered Securities and all other outstanding shares of capital
stock of the Company have been duly
6
-6-
authorized; all outstanding shares of capital stock of the Company are,
and, when the Offered Securities have been delivered and paid for in
accordance with this Agreement on each Closing Date (as defined below),
such Offered Securities will have been, validly issued, fully paid and
nonassessable and will conform to the description thereof contained in the
Prospectus; and the stockholders of the Company have no preemptive or
similar rights with respect to the Securities. Except as set forth in the
Prospectus, the Company does not have outstanding, and at the Closing Date
the Company will not have outstanding, any options to purchase, or any
rights or warrants to subscribe for, or any securities or obligations
convertible into, or any contracts or commitments to issue or sell, (i) any
shares of Securities, or (ii) any shares of capital stock held by it in any
Subsidiary, or any such warrants, convertible securities or obligations
(except shares issued or issuable pursuant to employee benefit plans after
the date as of which information with respect thereto is given in the
Prospectus).
(f) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Underwriter for a
brokerage commission, finder's fee or other like payment with respect to
the Offered Securities.
(g) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(h) The Company has filed a notification form relating to the issuance
of the Offered Securities with the National Association of Securities
Dealers, Inc. ("NASD") in accordance with the NASD By-laws.
(i) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the
consummation by the Company of the transactions contemplated by this
Agreement in connection with the issuance and sale of the Offered
Securities by the Company, except such as have been obtained and made under
the Act and such as may be required under state securities laws.
7
-7-
(j) The execution, delivery and performance of this Agreement, and the
issuance and sale of the Offered Securities, will not result in a breach or
violation of any of the terms and provisions of, or constitute a default
under, any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over
the Company or any Subsidiary or any of their properties, or any agreement
or instrument to which the Company or any such Subsidiary is a party or by
which the Company or any such Subsidiary is bound or to which any of the
properties of the Company or any such Subsidiary is subject, or the charter
or by-laws (or comparable instruments) of the Company or any such
Subsidiary, and the Company has full power and authority to authorize,
issue and sell the Offered Securities as contemplated by this Agreement.
(k) This Agreement has been duly authorized, executed and delivered by
the Company.
(l) Except as disclosed in the Prospectus, the Company and its
Subsidiaries have good and marketable title to all material real properties
and all other material properties and assets owned by them, in each case
free from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by them; and except as disclosed in the Prospectus, the Company and
its Subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with
the use made or to be made thereof by them.
(m) The Company and its Subsidiaries possess adequate certificates,
authorities, licenses or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by them
and have not received any notice of proceedings relating to the revocation
or modification of any such certificate, authority, licenses or permit
that, if determined adversely to the Company or any of its Subsidiaries,
would individually or in the aggregate have a material adverse effect on
the condition (financial or otherwise), business, properties, or results of
operations of the Company and the Subsidiaries taken as a whole or of GTR.
(n) The Company has been granted a valid Biologics License by the U.S.
Food & Drug Administration for its
8
-8-
Carticel autologous cultured chondrocytes and related manufacturing
facilities and such Biologics License has not been materially altered,
suspended or terminated.
(o) No labor dispute with the employees of the Company or any
Subsidiary exists or, to the knowledge of the Company, is imminent that
might have a material adverse effect on the condition (financial or
otherwise), business, properties, or results of operations of the Company
and the Subsidiaries taken as a whole or of GTR.
(p) The Company and its Subsidiaries own, possess or can acquire on
reasonable terms adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and
other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently
employed by them, and have not received any notice of infringement of or
conflict with asserted rights of others with respect to any intellectual
property rights that, if determined adversely to the Company or any of its
Subsidiaries, would individually or in the aggregate have a material
adverse effect on the condition (financial or otherwise), business,
properties, or results of operations of the Company and the Subsidiaries
taken as a whole or of GTR.
(q) Neither the Company nor any of its Subsidiaries is in violation of
any statute, any rule, regulation, decision or order of any governmental
agency or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to hazardous
or toxic substances (collectively, "environmental laws"), owns or operates
any real property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating to
any environmental laws, which violation, contamination, liability or claim
would individually or in the aggregate have a material adverse effect on
the condition (financial or otherwise), business, properties, or results of
operations of the Company and the Subsidiaries taken as a whole or of GTR;
and the Company is not aware of any pending investigation which might lead
to such a claim.
9
-9-
(r) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, any of its
Subsidiaries or any of their respective properties that, if determined
adversely to the Company or any of its Subsidiaries, would individually or
in the aggregate have a material adverse effect on the condition (financial
or otherwise), business, properties, or results of operations of the
Company and the Subsidiaries taken as a whole or of GTR, or would
materially and adversely affect the ability of the Company to perform its
obligations under this Agreement, or which are otherwise material in the
context of the sale of the Offered Securities; and no such actions, suits
or proceedings are threatened or, to the Company's knowledge, contemplated.
(s) The financial statements included or incorporated in each
Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries, the Genzyme
General Division ("Genzyme General"), GTR and the Genzyme Molecular
Oncology Division ("GMO"), as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent basis
and the schedules included in each Registration Statement present fairly
the information required to be stated therein. The pro forma financial data
and other pro forma financial information included or incorporated in each
Registration Statement and the Prospectus (i) comply as to form in all
material respects with applicable requirements of Regulation S-X
promulgated under the Exchange Act, (ii) have been prepared in accordance
with the Commission's rules and guidelines with respect to pro forma
financial statements, and (iii) have been properly computed on the bases
described therein; the assumptions used in the preparation of the pro forma
financial data and other pro forma financial information included or
incorporated in each Registration Statement and the Prospectus are
reasonable and the adjustments used therein are appropriate to give effect
to the transactions or circumstances referred to therein. No other
financial statements or schedules of the Company are required by the Act,
the Exchange Act, the Rules and Regulations or the Exchange Act Rules and
Regulations to be included or incorporated in either Registration Statement
or the Prospectus. Coopers & Xxxxxxx L.L.P. and Xxxxxx Xxxxxxxx LLP, who
have reported on certain of such financial statements and schedules, are
inde-
10
-10-
pendent accountants as required by the Act, the Rules and Regulations, the
Exchange Act and the Exchange Act Rules and Regulations.
(t) There is no document or contract of a character required to be
described in a Registration Statement or the Prospectus or to be filed as
an exhibit to a Registration Statement which is not described or filed as
required. All contracts so described or filed to which the Company or any
Subsidiary is a party have been duly authorized, executed and delivered by
the Company or such Subsidiary, constitute valid and binding agreements of
the Company or such Subsidiary and are enforceable against the Company or
such Subsidiary in accordance with the terms thereof.
(u) Neither the Company nor any of the Subsidiaries is in violation of
its charter, by-laws or partnership agreement or in default (nor has an
event occurred which with notice or lapse of time or both would constitute
a default or acceleration) in the performance of any obligation, agreement
or condition contained in any indenture, mortgage, deed of trust, voting
trust agreement, loan agreement, bond, debenture, note agreement or other
evidence of indebtedness, 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 their respective properties is bound or affected and neither the
Company nor any of the Subsidiaries is in violation of any judgment,
ruling, decree, order, franchise, license or permit or any statute, rule or
regulation applicable to the business or properties of the Company or any
of the Subsidiaries, where such violation or default would have a material
adverse effect on the condition (financial or otherwise), business,
properties, or results of operations of the Company and the Subsidiaries
taken as a whole or of GTR.
(v) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included or incorporated in the
Prospectus there has been no material adverse change, nor any development
or event involving a prospective material adverse change, in the condition
(financial or otherwise), business, properties, or results of operations of
the Company and the Subsidiaries taken as a whole or of GTR and there has
been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
11
-11-
(w) The Company is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Prospectus, will not be an "investment company" as
defined in the Investment Company Act of 1940, as amended.
(x) The Company and its affiliates have not taken and will not take,
directly or indirectly, any action designed to cause, or result in, or
which has constituted or which might reasonably be expected to constitute,
the stabilization or manipulation of the price of the Securities to
facilitate the sale or resale of the Offered Securities.
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of $ per share, the respective numbers of
shares of Firm Securities set forth opposite the names of the Underwriters in
Schedule A hereto.
The Company will deliver the Firm Securities to the Representatives
for the accounts of the Underwriters, against payment of the purchase price by
wire transfers to an account at a bank acceptable to Credit Suisse First Boston
Corporation ("CSFBC") or by certified or official bank check or checks in
Federal (same day) funds drawn to the order of the Company at the office of
Xxxxxx Xxxxxx & Xxxxxxx, 00 Xxxx Xxxxxx, XX, XX, at 9:00 A.M., New York time, on
October , 1997, or at such other time not later than seven full business days
thereafter as CSFBC and the Company determine, such time being herein referred
to as the "First Closing Date". For purposes of Rule 15c6-1 under the Exchange
Act, the First Closing Date (if later than the otherwise applicable settlement
date) shall be the settlement date for payment of funds and delivery of
securities for all the Offered Securities sold pursuant to the offering. The
certificates for the Firm Securities so to be delivered will be in definitive
form, in such denominations and registered in such names as CSFBC requests and
will be made available for checking and packaging at the office of Credit Suisse
First Boston Corporation, Eleven Madison Avenue, NY, NY 10010-3629 at least 24
hours prior to the First Closing Date.
In addition, upon written notice from CSFBC given to the Company from
time to time not more than 30 days subsequent
12
-12-
to the date of the Prospectus, the Underwriters may purchase all or less than
all of the Optional Securities at the purchase price per Security to be paid for
the Firm Securities. The Company agrees to sell to the Underwriters the number
of shares of Optional Securities specified in such notice and the Underwriters
agree, severally and not jointly, to purchase such Optional Securities. Such
Optional Securities shall be purchased for the account of each Underwriter in
the same proportion as the number of shares of Firm Securities set forth
opposite such Underwriter's name bears to the total number of shares of Firm
Securities (subject to adjustment by CSFBC to eliminate fractions) and may be
purchased by the Underwriters only for the purpose of covering over-allotments
made in connection with the sale of the Firm Securities. No Optional Securities
shall be sold or delivered unless the Firm Securities previously have been, or
simultaneously are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to time and to the
extent not previously exercised may be surrendered and terminated at any time
upon notice by CSFBC to the Company.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "Optional Closing Date," which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "Closing Date"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Company will deliver the
Optional Securities being purchased on each Optional Closing Date to the
Representatives for the accounts of the several Underwriters, against payment of
the purchase price therefor by wire transfer to an account at a bank acceptable
to CSFBC or by certified or official bank check or checks in Federal (same day)
funds drawn to the order of the Company, at the above office of Xxxxxx Xxxxxx &
Xxxxxxx. The certificates for the Optional Securities being purchased on each
Optional Closing Date will be in definitive form, in such denominations and
registered in such names as CSFBC requests upon reasonable notice prior to such
Optional Closing Date and will be made available for checking and packaging at
the above office of CSFBC at a reasonable time in advance of such Optional
Closing Date.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
13
-13-
5. CERTAIN AGREEMENTS OF THE COMPANY. The Company agrees with the
several Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will
file the Prospectus with the Commission pursuant to and in accordance with
subparagraph (1) (or, if applicable and if consented to by CSFBC,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this Agreement
or (B) the fifteenth business day after the Effective Date of the Initial
Registration Statement. The Company will advise CSFBC promptly of any such
filing pursuant to Rule 424(b). If the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement and an additional registration statement is necessary to register
a portion of the Offered Securities under the Act but the Effective Time
thereof has not occurred as of such execution and delivery, the Company
will transmit the additional registration statement or, if filed, will
transmit a post-effective amendment thereto with the Commission pursuant to
and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, on or prior to the time
the Prospectus is printed and distributed to any Underwriter, or will make
such filing at such later date as shall have been consented to by CSFBC.
(b) The Company will advise CSFBC promptly of any proposal to amend or
supplement the initial or any additional registration statement as filed or
the related prospectus or the Initial Registration Statement, the
additional registration statement (if any) or the Prospectus and will not
effect such amendment or supplementation without CSFBC's consent; and the
Company will also advise CSFBC promptly of the effectiveness of each
Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or
supplementation of a Registration Statement or the Prospectus and of the
institution by the Commission of any stop order proceedings in respect of a
Registration Statement and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under
14
-14-
the Act in connection with sales by any Underwriter or dealer, any event
occurs as a result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the Act, the
Company will promptly notify CSFBC of such event and will promptly prepare
and file with the Commission, at its own expense, an amendment or
supplement which will correct such statement or omission or an amendment
which will effect such compliance. Neither CSFBC's consent to, nor the
Underwriters' delivery of, any such amendment or supplement shall
constitute a waiver of any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
securityholders an earnings statement covering a period of at least 12
months beginning after the Effective Date of the Initial Registration
Statement (or, if later, the Effective Date of the Additional Registration
Statement) which will satisfy the provisions of Section 11(a) of the Act.
For the purpose of the preceding sentence, "Availability Date" means the
45th day after the end of the fourth fiscal quarter following the fiscal
quarter that includes such Effective Date, except that, if such fourth
fiscal quarter is the last quarter of the Company's fiscal year,
"Availability Date" means the 90th day after the end of such fourth fiscal
quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (four of which will be copies of the signed
documents certified as to the authenticity of the signatures and will
include all exhibits), each related preliminary prospectus, and, so long as
delivery of a prospectus relating to the Offered Securities is required to
be delivered under the Act in connection with sales by any Underwriter or
dealer, the Prospectus and all amendments and supplements to such
documents, in each case in such quantities as CSFBC requests. The
Prospectus shall be so furnished on or prior to 3:00 P.M., New York time,
on the business day following the later of the execution and delivery of
this Agreement or the Effective Time of the Initial Registration Statement.
All other documents shall be so furnished as soon as avail-
15
-15-
able. The Company will pay the expenses of printing and distributing to the
Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC
designates and will continue such qualification in effect so long as
required for the distribution.
(g) During the period of five years hereafter, the Company will
furnish to the Representatives and, upon request, to each of the other
Underwriters, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company
will furnish to the Representatives (i) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Exchange Act or mailed to stockholders, and
(ii) from time to time, such other information concerning the Company as
CSFBC may reasonably request.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement, for any filing fees and other
expenses (including fees and disbursements of counsel) incurred in
connection with qualification of the Offered Securities for sale under the
laws of such jurisdictions as CSFBC designates and the reproduction of
memoranda relating thereto, for the filing fee incident to, and the
reasonable fees and disbursements of counsel of the Underwriters in
connection with, the review by the National Association of Securities
Dealers, Inc. of the Offered Securities, for any travel expenses of the
Company's officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective purchasers
of the Offered Securities and for expenses incurred in distributing
preliminary prospectuses and the Prospectus (including any amendments and
supplements thereto) to the Underwriters.
(i) For a period of 90 days after the Effective Date of the Initial
Registration Statement (or, if later, the Additional Registration
Statement), the Company will not offer, sell, contract to sell, announce
its intention to sell, pledge, hypothecate, grant any option to purchase or
otherwise dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to, any additional shares of
its Securities or securities convertible into or exchangeable or
exercisable
16
-16-
for any shares of its Securities, or publicly disclose the intention to
make any such offer, sale, pledge, disposition or filing, without the prior
written consent of CSFBC, except issuances of Securities pursuant to the
conversion or exchange of convertible or exchangeable securities or the
exercise of warrants or options, in each case outstanding on the date
hereof, grants of employee, director or consultant stock options pursuant
to the terms of a plan in effect on the date hereof or issuances of
Securities pursuant to the exercise of such options.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations
of the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of Company officers made pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions precedent:
(a) The Representatives shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial
Registration Statement is prior to the execution and delivery of this
Agreement, shall be on or prior to the date of this Agreement or, if the
Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement, shall be prior to the filing of
the amendment or post-effective amendment to the registration statement to
be filed shortly prior to such Effective Time), of Coopers & Xxxxxxx L.L.P.
confirming that they are independent public accountants within the meaning
of the Act and the applicable published Rules and Regulations thereunder
and stating to the effect that:
(i) in their opinion the financial statements and schedules
examined by them and included or incorporated in the Registration
Statements (the "Genzyme Financial Statements") comply as to form in
all material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations;
(ii) they have performed the procedures specified by the American
Institute of Certified Public Accountants for a review of interim
financial infor-
17
-17-
mation as described in Statement of Auditing Standards No. 71, Interim
Financial Information, on the unaudited Genzyme Financial Statements
included or incorporated in the Registration Statements;
(iii) on the basis of the review referred to in clause
(ii) above, a reading of the latest available interim financial
statements of the Company, Genzyme General, GTR and GMO and inquiries
of officials of the Company who have responsibility for financial and
accounting matters and other specified procedures, nothing came to
their attention that caused them to believe that:
(A) the unaudited Genzyme Financial Statements included or
incorporated in the Registration Statements do not comply as to
form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations or any material modifications should be made to such
unaudited financial statements for them to be in conformity with
generally accepted accounting principles;
(B) at the date of the latest available balance sheets read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of this Agreement,
there was any change in the capital stock of the Company, other
than changes due to the issuance of common stock in connection
with the exercise of stock options, stock warrants or the
employee stock purchase plan, or any increase in long term debt
of the Company and its consolidated subsidiaries, Genzyme
General, GTR or GMO, at the date of the latest available balance
sheets read by such accountants, there was any decrease in net
current assets of the Company and its consolidated subsidiaries,
Genzyme General, GTR or GMO, as compared with amounts shown on
the latest balance sheets included or incorporated in the
Prospectus; or
(C) for the period from the closing date of the latest
statements of operations
18
-18-
included or incorporated in the Prospectus to the closing date of
the latest available statements of operations read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year, in total revenues or
in net income,
except in all cases set forth in clauses (iv)(B) and (iv)(C) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information
contained in the Registration Statements (in each case to the extent
that such dollar amounts, percentages and other financial information
are derived from the general accounting records of the Company and its
subsidiaries, Genzyme General, GTR or GMO subject to the internal
controls of the Company's accounting system or are derived directly
from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records
and other procedures specified in such letter and have found such
dollar amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter.
For purposes of this subsection, (i) if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective
amendment to be filed shortly prior to its Effective Time, (ii) if the
Effective Time of the Initial Registration Statement is prior to the
execution and delivery of this Agreement but the Effective Time of the
Additional Registration is subsequent to such execution and delivery,
"Registration Statements" shall mean the Initial Registration Statement and
the Additional Registration Statement as proposed to be filed or as
proposed to be amended by the post-effective amendment to be filed shortly
prior to its Effective Time, and (iii) "Prospectus" shall mean the
prospectus included in the Registration Statements. All financial
statements and schedules included in material incorporated by reference
19
-19-
into the Prospectus shall be deemed included in the Registration Statements
for purposes of this subsection.
(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time
shall have occurred not later than 10:00 P.M., New York time, on the date
of this Agreement or such later date as shall have been consented to by
CSFBC. If the Effective Time of the Additional Registration Statement (if
any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, the time the Prospectus
is printed and distributed to any Underwriter, or shall have occurred at
such later date as shall have been consented to by CSFBC. If the Effective
Time of the Initial Registration Statement is prior to the execution and
delivery of this Agreement, the Prospectus shall have been filed with the
Commission in accordance with the Rules and Regulations and Section 5(a) of
this Agreement. Prior to such Closing Date, no stop order suspending the
effectiveness of a Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the
knowledge of the Company or the Representatives, shall be contemplated by
the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or otherwise),
business, properties, or results of operations of the Company and the
Subsidiaries taken as a whole or of GTR which, in the judgment of a
majority in interest of the Underwriters including the Representatives, is
material and adverse and makes it impractical or inadvisable to proceed
with completion of the public offering or the sale of and payment for the
Offered Securities; (ii) any downgrading in the rating of any debt
securities of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance
or review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of
20
-20-
minimum prices for trading on such exchange, or any suspension of trading
of any securities of the Company on any exchange or in the over-the counter
market; (iv) any banking moratorium declared by U.S. Federal or New York
authorities; or (v) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress or
any other substantial national or international calamity or emergency if,
in the judgment of a majority in interest of the Underwriters including the
Representatives, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the
Offered Securities.
(d) The Representatives shall have received an opinion, dated such
Closing Date, of Xxxxxx & Dodge LLP, counsel for the Company, to the effect
that:
(i) Each of the Company and Genzyme Securities Corporation
("GSC") and Deknatel Xxxxxxx Xxxxxx, Inc. ("DSP" and together with
GSC, the "Domestic Subsidiaries") is a corporation duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation. Each of the Company and GSC is
duly qualified to do business as a foreign corporation in good
standing in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it
makes such qualification necessary, except where the failure to be so
qualified would not have a material adverse effect on the condition
(financial or otherwise), business, properties, or results of
operations of the Company and subsidiaries taken as a whole or of
GTR. Each of the Company and the Domestic Subsidiaries has full power
and authority to own or lease all the assets owned or leased by it and
to conduct its business as described in the Prospectus.
(ii) The outstanding shares of the Company's capital stock have
been duly authorized and validly issued and are fully paid and
non-assessable and are not subject to any preemptive or similar right.
(iii) The Offered Securities sold to the Underwriters pursuant to
this Agreement have been duly authorized and validly issued by the
Company and upon
21
-21-
issuance and delivery against payment therefor as provided in this
Agreement will be fully paid and non-assessable; and no holder thereof
is or will be subject to personal liability by reason of being such
holder.
(iv) The issuance of the Offered Securities by the Company is not
subject to preemptive rights of any holder of securities of the
Company.
(v) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body
is required in connection with the authorization, issuance, transfer,
sale or delivery of the Offered Securities by the Company, in
connection with the execution, delivery and performance of this
Agreement by the Company or in connection with the taking by the
Company of any action contemplated thereby, except such as have been
obtained under the Act and the Rules and Regulations and such as may
be required under state securities laws.
(vi) The authorized capital stock of the Company is as set forth
in the Prospectus. The description of the Securities contained in the
Prospectus conforms in all material respects to the terms thereof
contained in the Company's articles of organization. The Company is
the sole record owner, directly or indirectly, of all of the capital
stock of each of its Domestic Subsidiaries.
(vii) The Company and the offering of the Firm Securities meet
the requirements for the use of Form S-3, and the Registration
Statement (as amended through the date of such opinion) and the
Prospectus (including any documents incorporated by reference into the
Prospectus, at the time they were filed) comply or complied in all
material respects as to form with the requirements of the Act, the
Rules and Regulations, the Exchange Act and the Exchange Act
22
-22-
Rules and Regulations (except that such counsel need express no
opinion as to financial statements, schedules and other financial and
statistical data contained in such Registration Statement or the
Prospectus or incorporated by reference therein).
(viii) Such counsel has participated in the preparation of the
Registration Statement and the Prospectus. Except as explicitly
provided in such opinion, such counsel has not undertaken to verify
independently the facts disclosed in the Registration Statement and
the Prospectus (including any documents incorporated by reference
therein). However, in the course of such participation nothing has
come to such counsel's attention which has caused them to believe
that, both as of the Effective Date of the Initial Registration
Statement (or, if later, of the Additional Registration Statement) and
as of the First Closing Date and the optional Closing Date, either the
Registration Statement or the Prospectus, or any amendment or
supplement thereto including any documents incorporated by reference
into the Prospectus, contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact required to
be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading
(except that such counsel need express no opinion as to financial
statements, schedules and other financial or statistical data
contained in the Registration Statement or the Prospectus or
incorporated by reference therein).
(ix) The Initial Registration Statement was declared effective
under the Act as of the date and time specified in such opinion, the
Additional Registration Statement (if any) was filed and became
effective under the Act as of the date and time (if determinable)
specified in such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in
such opinion on the date specified therein or was included in the
Initial Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best of such counsel's
knowledge, no order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has
23
-23-
been instituted or is threatened, pending or contemplated.
(x) Such counsel has reviewed all contracts or other
agreements of the Company referred to in the Registration Statement
and the Prospectus (including the contracts referred to in the
documents incorporated by reference therein set forth in such opinion,
as agreed upon between such counsel and counsel for the Underwriters)
and the descriptions thereof (insofar as such descriptions constitute
a summary of the legal matters referred to therein) are accurate in
all material respects (except that such counsel need express no
opinion as to any descriptions thereof appearing in the financial
statements, schedules and other financial or statistical data
contained in the Registration Statement or the Prospectus or
incorporated by reference therein). Such counsel does not know of any
contracts or other documents required to be so summarized or disclosed
or filed as an exhibit to the Registration Statement or to any
document incorporated by reference therein which have not been so
summarized or disclosed or filed.
(xi) All descriptions in the Prospectus of statutes and
regulations (excluding statutes and regulations relating to FDA
matters, organ transplant or tissue bank licensure laws and Canadian
statutes and regulations) are accurate. Such counsel has reviewed the
transcript of the FDA advisory panel proceeding described in the third
paragraph under the caption "Business -- Carticel ACC Registry and
Outcomes Data -- Government Regulation and FDA Approval" and the
description of such proceeding is accurately summarized.
(xii) The Company has full corporate power and authority to
enter into this Agreement, and this Agreement has been duly
authorized, executed and delivered by the Company.
(xiii) The execution and delivery of this Agreement by the
Company, the consummation by the Company of the transactions therein
contemplated and the compliance by the Company with the terms of this
Agreement do not and will not result in the creation or imposition of
any lien, charge or encumbrance upon any of the assets of the Company
or GSC pursuant to the terms or provisions of, or result in a breach
or
24
-24-
violation of any of the terms or provisions of, or constitute a
default or result in the acceleration of any obligation under, the
charter or by-laws of the Company or the Domestic Subsidiaries or, to
the knowledge of such counsel, any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note
agreement or other evidence of indebtedness, lease, contract or other
agreement or instrument to which the Company or GSC is a party or by
which either the Company's or GSC's respective properties is bound or
affected, or any judgment, ruling, decree or order known to such
counsel or any statute, rule or regulation applicable to the business
or properties of the Company or GSC (except that such counsel need
express no opinion as to the securities or Blue Sky laws of any
jurisdiction other than the United States).
(xiv) Delivery of certificates for the Offered Securities will
pass valid and marketable title thereto free and clear of any liens,
encumbrances or claims to each Underwriter that has purchased such
Securities in good faith without knowledge or reason to know of any
adverse claims thereto and such counsel is not aware, after due
inquiry, of any adverse claim with respect thereto.
(xv) Such counsel is not aware of any legal or governmental
proceeding pending or threatened against the Company or the
Subsidiaries of a character required to be disclosed in the Prospectus
or any document incorporated therein by reference by the Securities
Act, the Rules and Regulations of the Exchange Act or the applicable
rules of the Commission thereunder, other than those that may be
described therein, nor is such counsel aware of any such proceeding in
which an unfavorable ruling, decision or finding might individually or
in the aggregate materially and adversely affect the ability of the
Company to perform its obligations under this Agreement.
25
-25-
(xvi) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Prospectus, will not be an
"investment company," as such term is defined in the Investment
Company Act of 1940, as amended.
In rendering the foregoing opinion, such counsel may rely, to the
extent they deem such reliance proper, on the opinions (in form and
substance reasonably satisfactory to Underwriters' counsel) of other
counsel reasonably acceptable to Underwriters' counsel as to matters
governed by the laws of jurisdictions other than the United States, the
Commonwealth of Massachusetts or the General Corporation Law of the State
of Delaware, and as to matters of fact, upon certificates of officers of
the Company and of government officials; provided that such counsel shall
state that the opinion of any other counsel is in form satisfactory to such
counsel and, in such counsel's opinion, such counsel and the
Representatives are justified in relying on such opinions of other counsel.
Copies of all such opinions and certificates shall be furnished to counsel
to the Underwriters on the Closing Date. Such counsel may state that they
are not passing on matters relating to patents, trademarks and FDA
regulatory matters except as specifically set forth above.
26
-26-
(e) The Representatives shall have received from Xxxxxx Xxxxxx &
Xxxxxxx, counsel for the Underwriters, such opinion or opinions, dated such
Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities delivered on such Closing Date, the
Registration Statements, the Prospectus and other related matters as the
Representatives may require, and the Company shall have furnished to such
counsel such documents as they request for the purpose of enabling them to
pass upon such matters. In rendering such opinion, Xxxxxx Xxxxxx & Xxxxxxx
may rely as to the incorporation of the Company and all other matters
governed by Massachusetts law upon the opinion of Xxxxxx & Dodge LLP
referred to above.
(f) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice-President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that: the representations and warranties of the Company in this Agreement
are true and correct; the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to such Closing Date; no stop order suspending the
effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated by
the Commission; the Additional Registration Statement (if any) satisfying
the requirements of subparagraphs (1) and (3) of Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing fee in
accordance with Rule 111(a) or (b) under the Act, prior to the time the
Prospectus was printed and distributed to any Underwriter; as of such date,
there was no change in the capital stock of the Company (excluding changes
due to option or warrant exercises, the July 1997 dividend of GTR
Designated Shares (as such term is defined in the Prospectus) and the
August 1997 offering of debt securities convertible into GMO Stock) as
compared with the amount shown on the latest balance sheets included or
incorporated in the Prospectus; and, subsequent to the date of the most
recent financial statements included or incorporated in the Prospectus,
there has been no material adverse change, nor any development or event
involving a prospective material adverse change, in the condition
(financial or otherwise), busi-
27
-27-
ness, properties, or results of operations of the Company or of GTR except
as set forth in or contemplated by the Prospectus or as described in such
certificate.
(g) The Representatives shall have received a certificate, dated such
Closing Date, of the principal financial or accounting officer of DSP in
which such officer shall state that, to the best of his knowledge after
reasonable investigation, the execution and delivery of this Agreement by
the Company, the consummation by the Company of the transactions therein
contemplated and the compliance by the Company with the terms of this
Agreement do not and will not result in the creation or imposition of any
lien, charge or encumbrance upon any of the assets of DSP pursuant to the
terms or provisions of, or result in a breach or violation of any of the
terms or provisions of, or constitute a default or result in the
acceleration of any obligation under, the charter or by-laws of DSP or, to
the knowledge of such officer, any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement or
other evidence of indebtedness, lease, contract or other agreement or
instrument to which DSP is a party or by which its properties is bound or
affected, or any judgment, ruling, decree or order known to such officer or
any statute, rule or regulation applicable to the business or properties of
DSP (other than the securities or blue sky laws of any jurisdiction other
than the United States), except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(h) The Representatives shall have received a letter, dated such
Closing Date, of Coopers & Xxxxxxx L.L.P. which meets the requirements of
subsection (a) of this Section, except that the specified date referred to
in such subsection will be a date not more than three business days prior
to such Closing Date for the purposes of this subsection.
(i) The Company shall have filed a notification form relating to the
issuance of the Offered Securities with the NASD in accordance with the
NASD By-laws.
The Company will furnish the Representatives with such conformed copies of
such opinions, certificates, letters and documents as the Representatives
reasonably request. CSFBC may in its sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obliga-
28
-28-
tions of the Underwriters hereunder, whether in respect of an optional
Closing Date or otherwise.
7. INDEMNIFICATION AND CONTRIBUTION. (a) The Company will indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
PROVIDED, HOWEVER, that the Company will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in conformity with written information
relating to any Underwriter furnished to the Company by such Underwriter through
the Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below; and provided, further,
that with respect to any untrue statement or alleged untrue statement in or
omission or alleged omission from any preliminary prospectus the indemnity
agreement contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Offered Securities concerned, to the extent that a
prospectus relating to such Offered Securities was required to be delivered by
such Underwriter under the Act in connection with such purchase and any such
loss, claim, damage or liability of such Underwriter results from the fact that
there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Offered Securities to such person, a copy of
the (exclusive of material incorporated by reference) if the Company had
previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company against any losses,
29
-29-
claims, damages or liabilities to which the Company may become subject, under
the Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in any Registration
Statement, the Prospectus, or any amendment or supplement thereto, or any
related preliminary prospectus, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon and
in conformity with written information relating to such Underwriter furnished to
the Company by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of (i) the following information in the Prospectus furnished on behalf of each
Underwriter: the last paragraph at the bottom of the cover page concerning the
terms of the offering by the Underwriters, the legend concerning over-allotments
and stabilizing and passive market making on the inside front cover page and the
concession and reallowance figures appearing in the [fourth] paragraph under the
caption "Underwriting" and the information contained in the [eighth] and [ninth]
paragraphs under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this Section
or Section 9 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under subsection (a) or (b) above or Section 9, notify the indemnifying party of
the commencement thereof; but the omission so to notify the indemnifying party
will not relieve it from any liability which it may have to any indemnified
party otherwise than under subsection (a) or (b) above or Section 9. In case any
such action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and after notice
30
-30-
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section or Section 9, as the case may be, for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened action
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 any claims that are the subject matter of such action. An
indemnifying party will not be liable for any settlement of any action or claim
effected without its written consent; provided, however, that such consent will
not be unreasonably withheld.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (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 from the offering of the Securities
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 the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities 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 proportion as the total net proceeds
from the offering (before deducting expenses) received by the Company bear to
the total underwriting discounts and commissions received by the Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities
31
-31-
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any action or claim which is
the subject of this subsection (d). Notwithstanding the provisions of this
subsection (d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section or Section 9
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter or the QIU (as hereinafter defined) within the meaning
of the Act; and the obligations of the Underwriters under this Section shall be
in addition to any liability which the respective Underwriters may otherwise
have and shall extend, upon the same terms and conditions, to each director of
the Company, to each officer of the Company who has signed a Registration
Statement and to each person, if any, who controls the Company within the
meaning of the Act.
8. DEFAULT OF UNDERWRITERS. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on either the
First or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements satisfactory to the Company for the purchase of such Offered
Securities by other persons, including any of the Underwriters, but if no such
arrangements are made by such Closing Date, the non-defaulting Underwriters
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the Offered Securities that such defaulting Underwriters
agreed but failed to purchase on such Closing Date. If any Underwriter or
Underwriters so default and the aggregate
32
-32-
number of shares of Offered Securities with respect to which such default or
defaults occur exceeds 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date and
arrangements satisfactory to CSFBC and the Company for the purchase of such
Offered Securities by other persons are not made within 36 hours after such
default, this Agreement will terminate without liability on the part of any
nondefaulting Underwriter or the Company, except as provided in Section 10
(provided that if such default occurs with respect to Optional Securities after
the First Closing Date, this Agreement will not terminate as to the Firm
Securities or any Optional Securities purchased prior to such termination). As
used in this Agreement, the term "Underwriter" includes any person substituted
for an Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. QUALIFIED INDEPENDENT UNDERWRITER. The Company hereby confirms
that at its request PaineWebber Incorporated has without compensation acted as
"qualified independent underwriter" (in such capacity, the "QIU") within the
meaning of Rule 2720 of the Conduct Rules of the National Association of
Securities Dealers, Inc. in connection with the offering of the Offered
Securities. The Company will indemnify and hold harmless the QIU against any
losses, claims, damages or liabilities, joint or several, to which the QIU may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon the QIU's acting (or alleged failing to act) as such "qualified independent
underwriter" and will reimburse the QIU for any legal or other expenses
reasonably incurred by the QIU in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are incurred;
except to the extent such losses, claims, damages or liabilities are the result
of the QIU's gross negligence or intentional misconduct.
10. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or its officers and of the several Underwriters set
forth in or made pursuant to this Agreement will remain in full force and
effect, regardless of any investigation, or statement as to the results thereof,
made by or on behalf of any Underwriter, the Company or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Offered Securities. If this Agreement is
terminated pursuant to Section 8 or if for any reason the
33
-33-
purchase of the Offered Securities by the Underwriters is not consummated, the
Company shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 and the respective obligations of the Company and the
Underwriters pursuant to Section 7 and the obligations of the Company pursuant
to Section 9 shall remain in effect, and if any Offered Securities have been
purchased hereunder the representations and warranties in Section 2 and all
obligations under Section 5 shall also remain in effect. If the purchase of the
Offered Securities by the Underwriters is not consummated for any reason other
than solely because of the termination of this Agreement pursuant to Section 8
or the occurrence of any event specified in clause (iii), (iv) or (v) of Section
6(c), the Company will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
11. NOTICES. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to the Representatives c/o Credit Suisse First Boston Corporation, Eleven
Madison Avenue, New York, N.Y. 10010-3629, Attention: Investment Banking
Department --Transactions Advisory Group, or, if sent to the Company, will be
mailed, delivered or telegraphed and confirmed to it at Xxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, XX 00000, Attention: Executive Vice President, Finance; PROVIDED,
HOWEVER, that any notice to an Underwriter pursuant to Section 7 will be mailed,
delivered or telegraphed and confirmed to such Underwriter.
12. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
13. REPRESENTATION OF UNDERWRITERS. The Representatives will act for
the several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by CSFBC will be binding
upon all the Underwriters.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
34
-34-
15. APPLICABLE LAW. This agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to
principles of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
35
-35-
If the foregoing is in accordance with the Representatives'
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement between the
Company and the several Underwriters in accordance with its terms.
Very truly yours,
GENZYME CORPORATION
By _______________________________
Name:
Title:
The foregoing Underwriting Agreement is
hereby confirmed and confirmed and
accepted as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXX & COMPANY
PAINEWEBBER INCORPORATED
Acting on behalf of themselves and as
the Representatives of the several
underwriters.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By ____________________________
Name:
Title:
36
SCHEDULE A
Number of
Underwriter Firm Securities
----------- ---------------
Credit Suisse First Boston Corporation...................
Xxxxx & Company..........................................
PaineWebber Incorporated.................................
Total......................... 4,000,000
---------
37
SCHEDULE B
SIGNIFICANT SUBSIDIARIES OF GENZYME
Jurisdiction
Names Ownership of Incorporation
----- --------- ----------------
Genzyme Limited 100% U.K.
Genzyme Securities 100% Massachusetts
Corporation
Deknatel Snowden 100% Delaware
Pencer, Inc.
