Exhibit 1.1
2,800,000 SHARES
TRANSKARYOTIC THERAPIES, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
December 12, 2001
XX XXXXX SECURITIES CORPORATION
DEUTSCHE BANC ALEX. XXXXX
PACIFIC GROWTH EQUITIES, INC.
LEERINK XXXXX & CO.
As Representatives of the several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
1. INTRODUCTORY. Transkaryotic Therapies, Inc., a Delaware corporation
(the "Company"), proposes to sell, pursuant to the terms of this Agreement, to
the several underwriters named in Schedule A hereto (the "Underwriters," or,
each, an "Underwriter"), an aggregate of 2,800,000 shares of Common Stock, $.01
par value per share (the "Common Stock"), of the Company. The aggregate of
2,800,000 shares so proposed to be sold is hereinafter referred to as the "Firm
Stock". The Company also propose to sell to the Underwriters, upon the terms and
conditions set forth in Section 3 hereof, up to an additional 420,000 shares of
Common Stock (the "Optional Stock"). The Firm Stock and the Optional Stock are
hereinafter collectively referred to as the "Stock". XX Xxxxx Securities
Corporation ("XX Xxxxx"), Deutsche Banc Alex. Xxxxx, Pacific Growth Equities,
Inc. and Leerink Xxxxx & Co. are acting as representatives of the several
Underwriters and in such capacity are hereinafter referred to as the
"Representatives."
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-3 (File No. 333-51772) (the
"Initial Registration Statement") in respect of the Stock has been
filed with the Securities and Exchange Commission (the "Commission");
the Initial Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto but including all documents incorporated by reference
in the prospectus contained therein, to you for each of the other
Underwriters, have been declared effective by the Commission in such
form; other than a registration statement, if any, increasing the size
of the offering (a "Rule 462(b) Registration Statement"), filed
pursuant to Rule 462(b) under the Securities Act of 1933, as amended
(the "Securities Act"), and the rules and regulations (the "Rules and
Regulations") of the Commission thereunder, which became effective upon
filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed with the Commission of which the Company has not advised
you; and no stop order suspending the effectiveness of the Initial
Registration Statement, any post-effective amendment thereto or the
Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included
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in the Initial Registration Statement or filed with the Commission
pursuant to Rule 424(a) of the Rules and Regulations, is hereinafter
called a "Preliminary Prospectus"); the various parts of the Initial
Registration Statement and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and including (i) the information
contained in the form of final prospectus with respect to the offering
of the Stock to be filed with the Commission pursuant to Rule 424(b)
under the Securities Act and (ii) the documents incorporated by
reference in the prospectus contained in the Initial Registration
Statement at the time such part of the Initial Registration Statement
became effective, each as amended at the time such part of the Initial
Registration Statement became effective or such part of the Rule 462(b)
Registration Statement, if any, became or hereafter becomes effective,
are hereinafter collectively called the "Registration Statements"; and
such final prospectus is hereinafter called the "Prospectus"; and any
reference herein to any Preliminary Prospectus or the Prospectus shall
be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities
Act, as of the date of such Preliminary Prospectus or Prospectus, as
the case may be, any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Preliminary Prospectus or Prospectus, as the case
may be; and any reference to any amendment to the Registration
Statements shall be deemed to refer to and include any annual report of
the Company filed pursuant to Section 13(a) or 15(d) of the Exchange
Act after the effective date of the Initial Registration Statement that
is incorporated by reference in the Registration Statements. No
document has been or will be prepared or distributed in reliance on
Rule 434 under the Securities Act. No order preventing or suspending
the use of any Preliminary Prospectus has been issued by the
Commission.
(b) The Registration Statement conforms (and the Rule 462(b)
Registration Statement, if any, the Prospectus and any amendments or
supplements (other than the prospectus filed with the Commission on
June 26, 2001 (the "June Prospectus")) to either of the Registration
Statements or the Prospectus, when they become effective or are filed
with the Commission, as the case may be, will conform) in all material
respects to the requirements of the Securities Act and the Rules and
Regulations and do not and will not, as of the applicable effective
date (as to the Registration Statements and any amendment thereto) and
as of the applicable filing date (as to the Prospectus and any
amendment or supplement thereto other than the June Prospectus) contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, however, that the foregoing
representations and warranties shall not apply to information contained
in or omitted from the Registration Statements or the Prospectus or any
such amendment or supplement thereto (other than the June Prospectus)
in reliance upon, and in conformity with, written information furnished
to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.
(c) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, and none of such
documents as of such dates contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading; and
any further documents so filed and incorporated by reference in the
Prospectus, when such documents become effective or are filed with
Commission , as the case may be, will conform in all material
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respects to the requirements of the Securities Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; PROVIDED,
however, that the foregoing representations and warranties shall not
apply to information contained in or omitted from any such document so
filed after the date hereof in reliance upon, and in conformity with,
written information furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for
inclusion therein.
(d) The Company and each of its subsidiaries (as defined in
Section 14) have been duly incorporated and are validly existing as
corporations in good standing under the laws of their respective
jurisdictions of incorporation, are duly qualified to do business and
are in good standing as foreign corporations in each jurisdiction in
which their respective ownership or lease of property or the conduct of
their respective businesses requires such qualification (it being
understood that some or all of the foregoing statements may not be
applicable to the Company's Swedish subsidiary as a matter of Swedish
law), and have all power and authority necessary to own or hold their
respective properties and to conduct the businesses in which they are
engaged, except where the failure to so qualify or have such power or
authority would not have, singularly or in the aggregate, a material
adverse effect on the condition (financial or otherwise), results of
operations, business or prospects of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect"). The Company does not
own or control, directly or indirectly, any corporations, associations
or other entities, except such corporations as are set forth on the
Company's Form 10-K for the year ended December 31, 2000, including the
exhibits thereto or such corporations ("Insignificant Subsidiaries") as
would not be required to be listed as a subsidiary under Item 601 of
Regulation S-K).
(e) This Agreement has been duly authorized executed and delivered
by the Company.
(f) The Stock to be issued and sold by the Company to the
Underwriters hereunder has been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will
be duly and validly issued, fully paid and non-assessable and free of
any preemptive or similar rights and will conform to the description
thereof contained in the Prospectus.
(g) The Company's authorized capital stock consists of 10,000,000
shares of Preferred Stock, of which 10,000 shares have been designated
as Series A Convertible Preferred Stock, and 1,000,000 shares have been
designated as Series B Junior Participating Preferred Stock, and
100,000,000 shares of Common Stock, and all of the issued and
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
conform to the description thereof contained in the Prospectus.
(h) All the outstanding shares of capital stock of each subsidiary
of the Company have been duly authorized and validly issued, are fully
paid and non-assessable and, except to the extent set forth in the
Prospectus and except with respect to TKT Europe 5S AB or any
Insignificant Subsidiary, are owned by the Company directly or
indirectly through one or more wholly-owned subsidiaries, free and
clear of any claim, lien, encumbrance, security interest, restriction
upon voting or transfer or any other claim of any third party.
(i) The execution, delivery and performance of this Agreement by
the Company and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under, any
indenture,
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mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries is bound or to which
any of the property or assets of the Company or any of its subsidiaries
is subject, except such conflicts, breach, violation or default which,
singularly or in the aggregate, would not have a Material Adverse
Effect, nor will such actions result in any violation of the provisions
of the charter or by-laws of the Company or any of its subsidiaries or
any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its subsidiaries or any of their properties or assets.
(j) Except for the registration of the Stock under the Securities
Act and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent, approval, authorization
or order of, or filing or registration with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement by the Company and the consummation of the
transactions contemplated hereby.
(k) Ernst & Young LLP, who have expressed their opinions on the
audited financial statements included or incorporated by reference in
the Registration Statements and the Prospectus, are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(l) The financial statements, together with the related notes,
included or incorporated by reference in the Prospectus and in each
Registration Statement fairly present the financial position and the
results of operations and changes in financial position of the Company
and its consolidated subsidiaries at the respective dates or for the
respective periods therein specified. Such statements and related notes
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis except as may be set forth in
the Prospectus.
(m) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Prospectus,
there has not been any change in the capital stock (excluding stock
option grants and the exercise of stock options) or long-term debt of
the Company or any of its subsidiaries or any material adverse change,
or any development involving a prospective material adverse change, in
or affecting the business, general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus.
(n) Except as set forth in the Prospectus, there is no legal or
governmental proceeding pending to which the Company or any of its
subsidiaries is a party or of which any property or assets of the
Company or any of its subsidiaries is the subject which, singularly or
in the aggregate, if determined adversely to the Company or any of its
subsidiaries, might have a Material Adverse Effect or would prevent or
adversely affect the ability of the Company to perform its obligations
under this Agreement; and to the best of the Company's knowledge, no
such proceedings that would reasonably be expected to have a Material
Adverse Effect are threatened or contemplated by governmental
authorities or threatened by others.
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(o) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any respect,
and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or to which
any of its property or assets is subject or (iii) is in violation in
any respect of any law, ordinance, governmental rule, regulation or
court decree to which it or its property or assets may be subject,
except, in the case of clauses (ii) and (iii), any violations or
defaults which, singularly or in the aggregate, would not have a
Material Adverse Effect.
(p) Except as described in the Prospectus, the Company and each of
its subsidiaries possesses such permits, licenses, approvals, consents
and other authorizations (including, licenses, pharmacy licenses,
accreditation and other similar documentation or approvals of any local
health departments) (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies, including, without limitation, the Food and Drug Administration
("FDA"), necessary to conduct its business as described in the
Prospectus; the Company is in compliance with the terms and conditions
of all such Governmental Licenses and all applicable FDA rules and
regulations, guidelines and policies, except where the failure so to
comply would not reasonably be expected to, singly or in the aggregate,
result in a Material Adverse Effect; all of the Governmental Licenses
are valid and in full force and effect, except where the invalidity of
such Governmental Licenses or the failure of such Governmental Licenses
to be in full force and effect would not reasonably be expected to
result in a Material Adverse Effect; and the Company has not received
any notice of proceedings relating to the revocation or modification of
any such Governmental Licenses which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would
reasonably be expected to result in a Material Adverse Effect.
(q) The Company is not, and after giving effect to the offering of
the Stock and the application of the proceeds thereof as described in
the Prospectus, will not become an "investment company" within the
meaning of the Investment Company Act of 1940, as amended and the rules
and regulations of the Commission thereunder.
(r) Neither the Company nor, to the Company's knowledge, any of
its officers, directors or affiliates, has taken, directly or
indirectly, any action designed or intended to stabilize or manipulate
the price of any security of the Company, or which caused or resulted
in, or which would in the future reasonably be expected to cause or
result in, stabilization or manipulation of the price of any security
of the Company.
(s) To the knowledge of the Company, the Company and its
subsidiaries own or possess the right to use all patents, trademarks,
trademark registrations, service marks, service xxxx registrations,
trade names, copyrights, licenses, inventions, trade secrets and rights
described in the Prospectus as being owned by them for the conduct of
their respective businesses, and the Company is not aware of any claim
to the contrary or any challenge by any other person to the rights of
the Company and its subsidiaries with respect to the foregoing, that
would reasonably be expected to result in a Material Adverse Effect.
Except as described in the Prospectus, the Company does not believe
that it or any of its subsidiaries infringes any valid patents,
trademarks, service marks, trade names, copyrights, trade secrets,
licenses or other intellectual property or franchise right of any other
person known to the Company which would reasonably be expected to have
a Material Adverse Effect (it being understood that the Company is not
representing that no person will make a claim against the Company or
its subsidiaries alleging the
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infringement by the Company or its subsidiaries of any patent,
trademark, service xxxx, trade name, copyright, trade secret, license
or other intellectual property or franchise right or as to the outcome
of any claim that may be made). Except as described in the Prospectus,
to the knowledge of the Company, no claim has been made against the
Company alleging the infringement by the Company of any patent,
trademark, service xxxx, trade name, copyright, trade secret, license
in or other intellectual property right or franchise right of any
person.
(t) The Company and each of its subsidiaries have good and
marketable title in fee simple to, or have valid rights to lease or
otherwise use, all items of real or personal property which are
material to the business of the Company and its subsidiaries taken as a
whole, in each case free and clear of all liens, encumbrances, claims
and defects, except such as are described in the Prospectus or such as
do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such
property by the Company and its subsidiaries.
(u) No labor disturbance by the employees of the Company or any of
its subsidiaries exists or, to the best of the Company's knowledge, is
imminent which would reasonably be expected to have a Material Adverse
Effect. The Company is not aware that any employee or significant group
of employees of the Company or any subsidiary plans to terminate
employment with the Company or any such subsidiary, which termination
would reasonably be expected to have a Material Adverse Effect.
(v) There has been no storage, generation, transportation,
handling, treatment, disposal, discharge, emission, or other release of
any kind of toxic or other wastes or other hazardous substances by, due
to, or caused by the Company or any of its subsidiaries (or, to the
Company's knowledge, any other entity for whose acts or omissions the
Company or any of its subsidiaries is or would be liable) upon any of
the property now or previously owned or leased by the Company or any of
its subsidiaries, or upon any other property, in violation of any
statute or any ordinance, rule, regulation, order, judgment, decree or
permit or which would, under any statute or any ordinance, rule
(including rule of common law), regulation, order, judgment, decree or
permit, give rise to any liability, except for any violation or
liability which would not have, singularly or in the aggregate with all
such violations and liabilities, a Material Adverse Effect; there has
been no disposal, discharge, emission or other release of any kind onto
any of the property now or previously owned or leased by the Company or
any of its subsidiaries or into the environment surrounding such
property of any toxic or other wastes or other hazardous substances
with respect to which the Company or any of its subsidiaries have
knowledge, except for any such disposal, discharge, emission, or other
release of any kind which would not have, singularly or in the
aggregate with all such discharges and other releases, a Material
Adverse Effect.
(w) The Company and its subsidiaries each (i) have filed all
federal, state and foreign income and franchise tax returns required to
be filed, (ii) have paid all federal state, local and foreign taxes due
and payable for which it is liable (other than matters, if any, which
the Company is contesting in good faith), and (iii) do not have any tax
deficiency or claims outstanding or assessed or, to the Company's
knowledge, proposed against it which would reasonably be expected to
have a Material Adverse Effect.
(x) The Company and each of its subsidiaries carry, or are covered
by, insurance in such amounts and covering such risks as is customary
for companies engaged in similar businesses in similar industries with
products in a similar stage of development.
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(y) There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to be
described in the Prospectus or to be filed as an exhibit to the
Registration Statements which is not described or filed therein as
required; and all descriptions of any such franchises, leases,
contracts, agreements or documents contained in the Registration
Statements are accurate and complete descriptions of such documents in
all material respects.
(z) No relationship, direct or indirect, exists between or among
the Company on the one hand, and the directors, officers or 5%
stockholders of the Company on the other hand, which is required to be
described in the Prospectus and which is not so described.
(aa) No person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of
the filing or effectiveness of the Registration Statement, except for
persons and entities who have expressly waived such right or who have
been given proper notice and have failed to exercise such right within
the time or times required under the terms and conditions of such
right.
(bb) Neither the Company nor any of its subsidiaries own any
"margin securities" as that term is defined in Regulations G and U of
the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board"), and none of the proceeds of the sale of the Stock will
be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or retiring
any indebtedness which was originally incurred to purchase or carry any
margin security or for any other purpose which might cause any of the
Company's securities to be considered a "purpose credit" within the
meanings of Regulation G, T, U or X of the Federal Reserve Board.
(cc) Neither the Company nor any of its subsidiaries is a party to
any contract, agreement or understanding with any person that would
give rise to a valid claim against the Company or the Underwriters for
a brokerage commission, finder's fee or like payment in connection with
the offering and sale of the Stock.
(dd) No forward-looking statement (within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act)
contained in the Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good faith.
(ee) The Company is subject to and in compliance with the reporting
requirements of Section 13 or Section 15(d) of the Exchange Act. The
Common Stock is registered pursuant to Section 12(b) of the Exchange
Act and is listed on the Nasdaq Stock Market's National Market and the
Company has taken no action designed to, or likely to have the effect
of, terminating the registration of the Common Stock under the Exchange
Act or delisting the Common Stock from the Nasdaq National Market, nor
has the Company received any notification that the Commission or the
Nasdaq National Market is contemplating terminating such registration
or listing.
(ff) To the knowledge of the Company, the human clinical trials
conducted by the Company or in which the Company has participated that
are described in, or incorporated by reference into, the Prospectus, or
the results of which are referred to in, or incorporated by reference
into, the Prospectus were and, if still pending, are being, conducted
in accordance with experimental protocols, procedures and controls
pursuant to accepted professional scientific standards; the
descriptions of the results of such studies, tests and trials contained
in, or incorporated by reference into, the Prospectus are accurate in
all material respects. The Company has not received
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any notices or correspondence from the FDA or any other governmental
agency requiring the termination or suspension of any clinical trials
conducted by, or on behalf of, the Company or in which the Company has
participated that are described in, or incorporated by reference into,
the Prospectus or the results of which are referred to in, or
incorporated by reference into, the Prospectus.
(gg) The Company meets the requirements of National Association of
Securities Dealers Conduct Rule 2710(b)(7)(C)(i).
3. PURCHASE, SALE AND DELIVERY OF OFFERED SECURITIES. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees, to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company that number of shares of Firm Stock (rounded up or down, as
determined by XX Xxxxx in its discretion, in order to avoid fractions) obtained
by multiplying 2,800,000 shares of Firm Stock by a fraction the numerator of
which is the number of shares of Firm Stock set forth opposite the name of such
Underwriter in Schedule A hereto and the denominator of which is the total
number of shares of Firm Stock.
The purchase price per share to be paid by the Underwriters to the
Company for the Stock will be $37.05 per share (the "Purchase Price").
The Company will deliver the Firm Stock to the Representatives for the
respective accounts of the several Underwriters (in the form of definitive
certificates, issued in such names and in such denominations as the
Representatives may direct by notice in writing to the Company given at or prior
to 12:00 Noon, New York time, on the second full business day preceding the
First Closing Date (as defined below) against payment of the aggregate Purchase
Price therefor by wire transfer to an account at a bank acceptable to XX Xxxxx,
payable to the order of the Company, all at the offices of Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP, 000 Xxxx Xxxxxx, Xxxxxx, XX 00000. Time shall be of the essence,
and delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligations of each Underwriter hereunder. The time and
date of the delivery and closing shall be at 10:00 A.M., New York time, on
December 18, 2001, in accordance with Rule 15c6-1 of the Exchange Act. The time
and date of such payment and delivery are herein referred to as the "First
Closing Date". The First Closing Date and the location of delivery of, and the
form of payment for, the Firm Stock may be varied by agreement between the
Company and XX Xxxxx.
The Company shall make the certificates for the Stock available to the
Representatives for examination on behalf of the Underwriters in New York, New
York at least twenty-four hours prior to the First Closing Date.
For the purpose of covering any over-allotments in connection with the
distribution and sale of the Firm Stock as contemplated by the Prospectus, the
Underwriters may purchase all or less than all of the Optional Stock. The price
per share to be paid for the Optional Stock shall be the Purchase Price. The
Company agrees to sell to the Underwriters the number of shares of Optional
Stock specified in the written notice by XX Xxxxx described below and the
Underwriters agree, severally and not jointly, to purchase such shares of
Optional Stock. Such shares of Optional Stock shall be purchased from the
Company and for the account of each Underwriter in the same proportion as the
number of shares of Firm Stock set forth opposite such Underwriter's name bears
to the total number of shares of Firm Stock (subject to adjustment by XX Xxxxx
to eliminate fractions). The option granted hereby may be exercised as to all or
any part of the Optional Stock at any time, and from time to time, not more than
thirty (30) days subsequent to the date of this Agreement. No Optional Stock
shall be sold and delivered unless the
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Firm Stock previously has been, or simultaneously is, sold and delivered. The
right to purchase the Optional Stock or any portion thereof may be surrendered
and terminated at any time upon notice by XX Xxxxx to the Company.
The option granted hereby may be exercised by written notice being
given to the Company by XX Xxxxx setting forth the number of shares of the
Optional Stock to be purchased by the Underwriters and the date and time for
delivery of and payment for the Optional Stock. Each date and time for delivery
of and payment for the Optional Stock (which may be the First Closing Date, but
not earlier) is herein called the "Option Closing Date" and shall in no event be
earlier than two (2) business days nor later than five (5) business days after
written notice is given. (The Option Closing Date and the First Closing Date are
herein called the "Closing Dates".)
The Company will deliver the Optional Stock to the Underwriters (in the
form of definitive certificates, issued in such names and in such denominations
as the Representatives may direct by notice in writing to the Company given at
or prior to 12:00 Noon, New York time, on the second full business day preceding
the Option Closing Date against payment of the aggregate Purchase Price therefor
in federal (same day) funds by certified or official bank check or checks or
wire transfer to an account at a bank acceptable to XX Xxxxx payable to the
order of the Company, all at the offices of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, 000
Xxxx Xxxxxx, Xxxxxx, XX 00000. Time shall be of the essence, and delivery at the
time and place specified pursuant to this Agreement is a further condition of
the obligations of each Underwriter hereunder. The Company shall make the
certificates for the Optional Stock available to the Representatives for
examination on behalf of the Underwriters in New York, New York not later than
10:00 A.M., New York time, on the business day preceding the Option Closing
Date. The Option Closing Date and the location of delivery of, and the form of
payment for, the Optional Stock may be varied by agreement between the Company
and XX Xxxxx.
The several Underwriters propose to offer the Stock for sale upon the
terms and conditions set forth in the Prospectus.
(4) FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the several
Underwriters that:
(a) The Company will prepare the Rule 462(b) Registration
Statement, if necessary, in a form approved by the Representatives and
file such Rule 462(b) Registration Statement with the Commission on the
date hereof; prepare the Prospectus in a form approved by the
Representatives and file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the second business day following the
execution and delivery of this Agreement; make no further amendment or
any supplement to the Registration Statements or to the Prospectus
prior to the Option Closing Date to which the Representatives shall
reasonably object by notice to the Company after a reasonable period to
review; advise the Representatives, promptly after it receives notice
thereof, of the time when any amendment to either Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Representatives with copies thereof; file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of the Prospectus and
for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Stock; advise the Representatives,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus, of the
suspension of the qualification of the Stock for offering or sale in
any jurisdiction, of the initiation or threatening of
Page 10
any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statements or the Prospectus or for additional information; and, in the
event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, use promptly its best efforts to
obtain its withdrawal.
(b) If at any time prior to the expiration of nine months after
the effective date of the Initial Registration Statement when a
prospectus relating to the Stock is required to be delivered any event
occurs as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact, or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus
or to file under the Exchange Act any document incorporated by
reference in the Prospectus to comply with the Securities Act or the
Exchange Act, the Company will promptly notify the Representatives
thereof and upon their request will prepare an amended or supplemented
Prospectus or make an appropriate filing pursuant to Section 13 or 14
of the Exchange Act which will correct such statement or omission or
effect such compliance. The Company will furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of such
amended or supplemented Prospectus; and in case any Underwriter is
required to deliver a prospectus relating to the Stock nine months or
more after the effective date of the Initial Registration Statement,
the Company upon the request of the Representatives and at the expense
of such Underwriter will prepare promptly an amended or supplemented
Prospectus as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Securities Act.
(c) The Company will furnish promptly to the Representatives and
to counsel for the Underwriters a signed copy of each of the
Registration Statements as originally filed with the Commission, and
each amendment thereto filed with the Commission, including all
consents and exhibits filed therewith.
(d) The Company will deliver promptly to the Representatives in
New York City such number of the following documents as the
Representatives shall reasonably request: (i) conformed copies of the
Registration Statements as originally filed with the Commission and
each amendment thereto (in each case excluding exhibits), (ii) each
Preliminary Prospectus, (iii) the Prospectus (not later than 10:00
A.M., New York time, of the business day following the execution and
delivery of this Agreement) and any amended or supplemented Prospectus
(not later than 10:00 A.M., New York time, on the business day
following the date of such amendment or supplement) and (iv) any
document incorporated by reference in the Prospectus (excluding
exhibits thereto).
(e) The Company will make generally available to its stockholders
as soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Securities Act), an earnings statement of the
Company and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(f) The Company will promptly take from time to time such actions
as the Representatives may reasonably request to qualify the Stock for
offering and sale under the securities or Blue Sky laws of such
jurisdictions as the Representatives may designate and to continue such
Page 11
qualifications in effect for so long as required for the distribution
of the Stock; PROVIDED that the Company and its subsidiaries shall not
be obligated to qualify as foreign corporations in any jurisdiction in
which they are not so qualified or to file a general consent to service
of process in any jurisdiction;
(g) During the period of five years from the date hereof, the
Company will deliver to the Representatives and, upon request, to each
of the other Underwriters, (i) as soon as they are available, copies of
all reports or other communications furnished to stockholders and (ii)
as soon as they are available, copies of any reports and financial
statements furnished or filed by the Company with the Commission
pursuant to the Exchange Act or any national securities exchange or
automatic quotation system on which the Stock is listed or quoted, in
each case other than such documents as are available on the internet.
(h) The Company will not directly or indirectly offer, sell,
assign, transfer, pledge, contract to sell, or otherwise dispose of any
shares of Common Stock or securities convertible into or exercisable or
exchangeable for Common Stock for a period of 90 days from the date of
the Prospectus without the prior written consent of XX Xxxxx other
than: (i) the Company's sale of the Stock hereunder and the issuance of
shares pursuant to employee benefit plans, qualified stock option plans
or other employee compensation plans existing on the date hereof or
pursuant to currently outstanding options or warrants, or rights
pursuant to The Rights Agreement dated December 13, 2000 by and between
the Company and Equiserve Trust Company, N.A. or upon the conversion or
exchange of convertible or exchangeable securities outstanding on the
date hereof, or (ii) the issuance by the Company of shares of Common
Stock as consideration for mergers, acquisitions, other business
combinations, or strategic alliances, occurring after the date of this
Agreement, provided that each recipient of shares pursuant to this
clause (ii) agrees that all such shares remain subject to restrictions
substantially similar to those contained in this subsection. The
Company will cause each executive officer and director of the Company
to furnish to the Representatives, prior to the Closing Date, a letter,
substantially in the form of Exhibit I hereto, containing so-called
lock-up provisions.
(i) The Company will supply the Representatives with copies of all
correspondence to and from, and all documents issued to and by, the
Commission in connection with the registration of the Stock under the
Securities Act.
(j) Prior to each of the Closing Dates, the Company will furnish
to the Representatives, as soon as they have been prepared, copies of
any unaudited interim consolidated financial statements of the Company
for any monthly periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the
Prospectus.
(k) Prior to the First Closing Date, the Company will not issue
any press release or other communication directly or indirectly or hold
any press conference with respect to the Company, its condition,
financial or otherwise, or earnings, business affairs or business
prospects (except for routine oral marketing communications in the
ordinary course of business and consistent with the past practices of
the Company and of which the Representatives are notified), without the
prior written consent of the Representative, unless in the judgment of
the Company and its counsel, and after notification to the
Representatives, such press release or communication is required by
law.
(l) In connection with the offering of the Stock, until XX Xxxxx
shall have notified the Company of the completion of the resale of the
Stock, the Company will not, and will use its best
Page 12
efforts to cause its affiliated purchasers (as defined in Regulation M
under the Exchange Act) not to, either alone or with one or more other
persons, bid for or purchase, for any account in which it or any of its
affiliated purchasers has a beneficial interest, any Stock, or attempt
to induce any person to purchase any Stock, except in compliance with
Regulation M; and not to, and to cause its affiliated purchasers not
to, make bids or purchase for the purpose of creating actual, or
apparent, active trading in or of raising the price of the Stock.
(m) The Company will apply the net proceeds from the sale of the
Stock as set forth in the Prospectus under the heading "Use of
Proceeds".
5. PAYMENT OF EXPENSES. The Company agrees with the Underwriters to pay
(a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Stock and any taxes payable in that connection; (b) the costs
incident to the registration of the Stock under the Securities Act; (c) the
costs incident to the preparation, printing and distribution of the Registration
Statement, Preliminary Prospectus, Prospectus any amendments and exhibits
thereto or any document incorporated by reference therein the costs of printing,
reproducing and distributing the "Agreement Among Underwriters" between the
Representatives and the Underwriters, the Master Selected Dealers' Agreement,
the Underwriters' Questionnaire and this Agreement by mail, telex or other means
of communications; (d) the fees and expenses (including related fees and
expenses of counsel for the Underwriters) incurred in connection with filings
made with the National Association of Securities Dealers; (e) any applicable
listing or other fees; (f) the fees and expenses of qualifying the Stock under
the securities laws of the several jurisdictions as provided in Section 4(f) and
of preparing, printing and distributing Blue Sky Memoranda and Legal Investment
Surveys (including related fees and expenses of counsel to the Underwriters);
(g) all fees and expenses of the registrar and transfer agent of the Stock; and
(h) all other costs and expenses incident to the performance of the obligations
of the Company under this Agreement (including, without limitation, the fees and
expenses of the Company's counsel and the Company's independent accountants);
PROVIDED that, except as otherwise provided in this Section 5 and in Section 9,
the Underwriters shall pay their own costs and expenses, including the fees and
expenses of their counsel, any transfer taxes on the Stock which they may sell
and the expenses of advertising any offering of the Stock made by the
Underwriters.
6. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of
the several Underwriters hereunder are subject to the accuracy, when made and on
each of the Closing Dates, of the representations and warranties of the Company
contained herein, to the accuracy of the statements of the Company made in any
certificates pursuant to the provisions hereof, to the performance by the
Company of their obligations hereunder, and to each of the following additional
terms and conditions:
(a) No stop order suspending the effectiveness of either the
Registration Statements shall have been issued and no proceedings for
that purpose shall have been initiated or threatened by the Commission,
and any request for additional information on the part of the
Commission (to be included in the Registration Statements or the
Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Representatives. The Rule 462(b)
Registration Statement, if any, and the Prospectus shall have been
timely filed with the Commission in accordance with Section 4(a).
(b) None of the Underwriters shall have discovered and disclosed
to the Company on or prior to the Closing Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
(other than the June Prospectus) contains an untrue statement of a fact
which, in the written opinion of counsel for the Underwriters, is
material or omits to state any fact which, in the written opinion of
such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
Page 13
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of each of this Agreement, the
Stock, the Registration Statement and the Prospectus and all other
legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material
respects to counsel for the Underwriters, and the Company shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(d) Xxxx and Xxxx LLP shall have furnished to the Representatives
such counsel's written opinion, as counsel to the Company, addressed to
the Underwriters and dated the Closing Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the
laws of the State of Delaware. The Company is duly
qualified to do business and is in good standing as a
foreign corporation in the Commonwealth of
Massachusetts, and has all corporate power and
authority necessary to own or hold its properties and
to conduct the business in which it is engaged.
(ii) The Company's authorized capital stock consists of
10,000,000 shares of Preferred Stock, of which 10,000
shares have been designated as Series A Convertible
Preferred Stock, and 1,000,000 shares have been
designated as Series B Junior Participating Preferred
Stock, and 100,000,000 shares of Common Stock, and
all of the issued and outstanding shares of capital
stock of the Company have been duly and validly
authorized and issued, are fully paid and
non-assessable and conform, in all material respects,
to the description thereof contained in the
Prospectus.
(iii) The Stock has been duly and validly issued and, when
issued and delivered to the Underwriters against
payment therefor as provided in this Agreement, will
be validly issued, fully paid and non-assessable.
(iv) There are no preemptive or other rights to subscribe
for or to purchase, nor any restriction upon the
voting or transfer of, any shares of the Stock
pursuant to the Company's charter or by-laws or any
Material Contract (as defined below).
(v) This Agreement has been duly authorized, executed and
delivered by the Company.
(vi) The execution and delivery of this Agreement by the
Company and the consummation by the Company of the
transactions contemplated hereby will not conflict
with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under
any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument (a
"Material Contract") to which the Company or any of
its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any
of the properties or assets of the Company or any of
its subsidiaries is subject, which has been filed as
an exhibit to the Registration Statement or as an
exhibit to any report filed under the Exchange Act
that has been incorporated by reference in the
Prospectus, nor will such actions result in any
violation of the Charter or by-laws of the Company or
of any of its United States subsidiaries or any
Federal or Massachusetts statute,
Page 14
rule or regulation, or any order known to such
counsel of any court or governmental agency or body
or court having jurisdiction over the Company or any
of its subsidiaries or any of their properties.
(vii) Except for the registration of the Stock under the
Securities Act and such consents, approvals,
authorizations, registrations or qualifications as
may be required under the Exchange Act and applicable
state securities laws in connection with the purchase
and distribution of the Stock by the Underwriters, no
consent, approval, authorization or order of, or
filing or registration with, any court or any Federal
or Massachusetts governmental agency or body is
required for the execution and delivery of this
Agreement by the Company and the consummation of the
transactions contemplated hereby.
(viii) The statements in the Prospectus under the heading
"Description of Common and Preferred Stock" and "Plan
of Distribution" in so far as they constitute
summaries of matters of law or regulation or legal
conclusions, have been reviewed by such counsel and
are accurate in all material respects.
(ix) To such counsel's knowledge, there are no legal or
governmental proceedings pending to which the Company
or any of its subsidiaries are a party or any such
proceedings known to such counsel which are
threatened or contemplated against the Company or any
of its subsidiaries that are required to be described
in the Registration Statement or Prospectus which are
not described as required, and, to such counsel's
knowledge, there are no contracts or other documents
that are required to be filed as exhibits to the
Registration Statement which are not filed as
required.
(x) The Registration Statement was declared effective
under the Securities Act as of the date and time
specified in such opinion, the Rule 462(b)
Registration Statement, if any, was filed with the
Commission on the date specified therein, the
Prospectus was filed with the Commission pursuant to
the subparagraph of Rule 424(b) of the Rules and
Regulations specified in such opinion on the date
specified therein and, to such counsel's knowledge,
no stop order suspending the effectiveness of the
Registration Statement has been issued and no
proceeding for that purpose is pending or threatened
by the Commission.
(xi) The Registration Statements, as of the respective
effective dates and the Prospectus, as of its date,
and any further amendments or supplements thereto, as
of their respective dates, made by the Company prior
to the Closing Date (other than the financial
statements and other financial data, including notes
and schedules, contained therein, as to which such
counsel need express no opinion) complied as to form
in all material respects with the requirements of the
Securities Act and the Rules and Regulations; and the
documents incorporated by reference in the Prospectus
and any further amendment or supplement to any such
incorporated document made by the Company prior to
the Closing Date (other than the financial statements
and related schedules therein, as to which such
counsel need express no opinion), when they became
effective or were filed with the Commission, as the
case may be, complied as to form in all material
respects with the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder.
Page 15
(xii) To such counsel's knowledge, no person or entity has
the right to require registration of shares of Common
Stock or other securities of the Company because of
the filing or effectiveness of the Registration
Statements, except for persons and entities who have
expressly waived such right or who have been given
proper notice and have failed to exercise such right
within the time or times required under the terms and
conditions of such right.
(xiii) The Company is not an "investment company" within the
meaning of the Investment Company Act and the rules
and regulations of the Commission thereunder.
Such counsel shall also state, without passing upon or
assuming any responsibility for the accuracy or completeness of the
statements contained in any of the following documents that nothing has
come to their attention that has led them to believe (a) that, as of
the effective date of the Registration Statement, the Registration
Statement (or as of its date, any amendment or supplement thereto
(other than the June Prospectus) made by the Company prior to the date
of such opinion) contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or (b) that, as
of its date, the Prospectus as amended or supplemented (other than the
June Prospectus) or any further amendment or supplement thereto made by
the Company prior to the Closing Date contained any untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading or (c) that, as of the Closing Date, the Registration
Statement as amended contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or (d) that,
as of the Closing Date, the Prospectus as amended or supplemented
(other than the June Prospectus) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
Notwithstanding the foregoing, such counsel need express no belief as
to (a) the financial statements, including the notes and schedules
thereto, or any financial data set forth or referred to in the
Registration Statement or the Prospectus as amended or supplemented
(other than the June Prospectus), (b) any matters arising under the
published rules, regulations and policies of the FDA or any other
federal statute or regulation governing the provision of drug
administration, and (c) any matters arising under state statues and
regulations governing the provision of drug administration. Such
counsel may note that, with respect to the foregoing statement, such
counsel does not serve as the Company's patent or regulatory counsel.
(e) Intellectual property counsel and regulatory counsel shall
have furnished to the Representatives such counsels' written opinions,
as counsels to the Company, addressed to the Underwriters and dated the
Closing Date, in form and substance reasonably satisfactory to the
Representatives, to such effect as the Underwriters have previously
specified to the Company
(f) The Representatives shall have received from Xxxxx, Xxxxxxx &
Xxxxxxxxx, LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to such matters as the
Underwriters may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for enabling
them to pass upon such matters.
(g) At the time of the execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter,
addressed to the Underwriters and dated such date, in form and
Page 16
substance satisfactory to the Representatives (i) confirming that they
are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Securities Act
and the Rules and Regulations and (ii) stating the conclusions and
findings of such firm with respect to the financial statements and
certain financial information contained or incorporated by reference in
the Prospectus.
(h) On the Closing Date, the Representatives shall have received a
letter (the "bring-down letter") from Ernst & Young LLP addressed to
the Underwriters and dated the Closing Date confirming, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Prospectus as of a date not more
than three business days prior to the date of the bring-down letter),
the conclusions and findings of such firm with respect to the financial
information and other matters covered by its letter delivered to the
Representatives concurrently with the execution of this Agreement
pursuant to Section 6(g).
(i) The Company shall have furnished to the Representatives a
certificate, dated the Closing Date, of its chief financial officer
stating that he has carefully examined the Registration Statement and
certifying on behalf of the Company that (i) the Registration
Statements as of their respective effective dates and the Prospectus,
as of each date thereof, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, (ii) since the effective date of the Initial Registration
Statement no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statements or the
Prospectus but was not so stated, (iii) as of the Closing Date, the
representations and warranties of the Company in this Agreement are
true and correct and the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, and (iv) subsequent to the
date of the most recent financial statements included or incorporated
by reference in the Prospectus, there has been no material adverse
change in the financial position or results of operations of the
Company and its subsidiaries, or any change, or any development
including a prospective change, in or affecting the condition
(financial or otherwise), results of operations, business or prospects
of the Company and its subsidiaries taken as a whole, except as set
forth in the Prospectus.
(j) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and (ii) since
such date there shall not have been any change in the capital stock
(other than stock option grants and any exercises of stock options) or
long-term debt of the Company or any of its subsidiaries or any change,
or any development involving a prospective change, in or affecting the
business, general affairs, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the
Prospectus, the effect of which, in any such case described in clause
(i) or (ii), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with
the sale or delivery of the Stock on the terms and in the manner
contemplated in the Prospectus.
(k) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency or body which would, as of the Closing Date,
prevent the issuance or sale of the Stock; and no injunction,
restraining order or order of
Page 17
any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would
prevent the issuance or sale of the Stock.
(l) Subsequent to the execution and delivery of this Agreement (i)
no downgrading shall have occurred in the rating accorded the Company's
debt securities by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) of the Rules and Regulations and (ii) no such
organization shall have publicly announced that it has under
surveillance or review (other than an announcement with positive
implications of a possible upgrading), its rating of any of the
Company's debt securities.
(m) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in
securities generally on the New York Stock Exchange or the American
Stock Exchange or in the over-the-counter market, or trading in any
securities of the Company on any exchange or in the over-the-counter
market, shall have been suspended or minimum prices shall have been
established on any such exchange or such market by the Commission, by
such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared
by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States or there shall have been a
declaration of a national emergency or war by the United States or (iv)
there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets in the United States
shall be such) as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the sale or delivery of
the Stock on the terms and in the manner contemplated in the
Prospectus.
(n) The National Market System shall have approved the Stock for
quotation, subject only to official notice of issuance.
(o) XX Xxxxx shall have received the written agreements,
substantially in the form of Exhibit I hereto, of the executive
officers and directors of the Company.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each
Underwriter, its officers, employees, representative and agents and
each person, if any, who controls any Underwriter within the meaning of
the Securities Act (collectively the "Underwriter Indemnified Parties"
and , each an "Underwriter Indemnified Party") against any loss, claim,
damage or liability, joint or several, or any action in respect
thereof, to which that Underwriter Indemnified Party may become
subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of or is based upon (i)
any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Prospectus, either of the Registration
Statements or the Prospectus or in any amendment or supplement thereto
(other than the June Prospectus) or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, either of the
Registration Statements or the Prospectus or in any amendment or
supplement thereto (other than the June Prospectus) a material fact
required to be stated therein or necessary to make the
Page 18
statements therein not misleading and shall reimburse each Underwriter
Indemnified Party promptly upon demand for any legal or other expenses
reasonably incurred by that Underwriter Indemnified Party in connection
with investigating or preparing to defend or defending against or
appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred;
provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from the
Preliminary Prospectus, either of the Registration Statements or the
Prospectus or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Company through
the Representatives by or on behalf of any Underwriter specifically for
use therein, which information the parties hereto agree is limited to
the Underwriter's Information (as defined in Section 16). This
indemnity agreement is not exclusive and will be in addition to any
liability which the Company might otherwise have and shall not limit
any rights or remedies which may otherwise be available at law or in
equity to each Underwriter Indemnified Party.
(b) Each Underwriter, severally and not jointly, shall indemnify
and hold harmless the Company its officers, employees, representative
and agents, each of its directors and each person, if any, who controls
the Company within the meaning of the Securities Act (collectively the
"Company Indemnified Parties" and each a "Company Indemnified Party")
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company Indemnified Parties may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Prospectus, either of the Registration
Statements or the Prospectus or in any amendment or supplement thereto
(other than the June Prospectus) or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company through
the Representatives by or on behalf of that Underwriter specifically
for use therein, and shall reimburse the Company Indemnified Parties
for any legal or other expenses reasonably incurred by such parties in
connection with investigating or preparing to defend or defending
against or appearing as third party witness in connection with any such
loss, claim, damage, liability or action as such expenses are incurred;
provided that the parties hereto hereby agree that such written
information provided by the Underwriters consists solely of the
Underwriter's Information. This indemnity agreement is not exclusive
and will be in addition to any liability which the Underwriters might
otherwise have and shall not limit any rights or remedies which may
otherwise be available at law or in equity to the Company Indemnified
Parties.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; PROVIDED, HOWEVER, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced
by such failure; and, PROVIDED, FURTHER, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it
Page 19
wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel reasonably satisfactory to
the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim
or action, the indemnifying party shall not be liable to the
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; PROVIDED,
HOWEVER, that any indemnified party shall have the right to employ
separate counsel in any such action and to participate in the defense
thereof but the fees and expenses of such counsel shall be at the
expense of such indemnified party unless (i) the employment thereof has
been specifically authorized by the indemnifying party in writing, (ii)
such indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are
different from or additional to those available to the indemnifying
party and in the reasonable judgment of such counsel it is advisable
for such indemnified party to employ separate counsel or (iii) the
indemnifying party has failed to assume the defense of such action and
employ counsel reasonably satisfactory to the indemnified party, in
which case, if such indemnified party notifies the indemnifying party
in writing that it elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right
to assume the defense of such action on behalf of such indemnified
party, it being understood, however, that the indemnifying party shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties, which firm
shall be designated in writing by XX Xxxxx, if the indemnified parties
under this Section 7 consist of any Underwriter Indemnified Party, or
by the Company if the indemnified parties under this Section 7 consist
of any Company Indemnified Parties. Each indemnified party, as a
condition of the indemnity agreements contained in Sections 7(a) and
7(b), shall use all reasonable efforts to cooperate with the
indemnifying party in the defense of any such action or claim. Subject
to the provisions of Section 7(d) below, no indemnifying party shall be
liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably withheld), but
if settled with its written consent or if there be a final judgment for
the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the
other from the offering of the Stock or if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company on the
one hand and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company
on the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Underwriters
with respect to the Stock purchased under this Agreement, in each case
as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among
Page 20
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 on the one hand or
the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission; provided that the parties
hereto agree that the written information furnished to the Company
through the Representatives by or on behalf of the Underwriters for use
in any Preliminary Prospectus, either of the Registration Statements or
the Prospectus consists solely of the Underwriter's Information. The
Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 7(d) were to be
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an
indemnified party as a result of the loss, claim, damage or liability,
or action in respect thereof, referred to above in this Section 7(d)
shall be deemed to include, for purposes of this Section 7(d), any
legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(d), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Stock underwritten by it and
distributed to the public were offered to the public less the amount of
any damages which such Underwriter has otherwise paid or become liable
to pay by reason of any untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
The Underwriters' obligations to contribute as provided in this Section
7(d) are several in proportion to their respective underwriting obligations and
not joint.
8. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by XX Xxxxx, in its absolute discretion by notice given to and
received by the Company prior to delivery of and payment for the Stock if, prior
to that time, any of the events described in Sections 6(i), 6(k) or 6(m) have
occurred or if the Underwriters shall decline to purchase the Stock for any
reason permitted under this Agreement.
9. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) this Agreement shall
have been terminated pursuant to Section 8 or 10, (b) the Company shall fail to
tender the Stock for delivery to the Underwriters for any reason permitted under
this Agreement, or (c) the Underwriters shall decline to purchase the Stock for
any reason permitted under this Agreement, the Company shall reimburse the
Underwriters for the fees and expenses of their counsel and for such other
out-of-pocket expenses as shall have been reasonably incurred by them in
connection with this Agreement and the proposed purchase of the Stock, and upon
demand the Company shall pay the full amount thereof to XX Xxxxx. If this
Agreement is terminated pursuant to Section 10 by reason of the default of one
or more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriter on account of those expenses.
10. SUBSTITUTION OF UNDERWRITERS. If any Underwriter or Underwriters shall
default in its or their obligations to purchase shares of Stock hereunder and
the aggregate number of shares which such defaulting Underwriter or Underwriters
agreed but failed to purchase does not exceed ten percent (10%) of the total
number of shares underwritten, the other Underwriters shall be obligated
severally, in proportion to their respective commitments hereunder, to purchase
the shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter or Underwriters shall so default and the
aggregate number of shares with respect to which such default or defaults occur
is more than ten percent (10%) of the total number of shares underwritten and
arrangements satisfactory to the
Page 21
Representatives and the Company for the purchase of such shares by other persons
are not made within forty-eight (48) hours after such default, this Agreement
shall terminate.
If the remaining Underwriters or substituted Underwriters are required
hereby or agree to take up all or part of the shares of Stock of a defaulting
Underwriter or Underwriters as provided in this Section 10, (i) the Company
shall have the right to postpone the Closing Dates for a period of not more than
five (5) full business days in order that the Company may effect whatever
changes may thereby be made necessary in the Registration Statement or the
Prospectus, or in any other documents or arrangements, and the Company agrees
promptly to file any amendments to the Registration Statement or supplements to
the Prospectus which may thereby be made necessary, and (ii) the respective
numbers of shares to be purchased by the remaining Underwriters or substituted
Underwriters shall be taken as the basis of their underwriting obligation for
all purposes of this Agreement. Nothing herein contained shall relieve any
defaulting Underwriter of its liability to the Company or the other Underwriters
for damages occasioned by its default hereunder. Any termination of this
Agreement pursuant to this Section 10 shall be without liability on the part of
any non-defaulting Underwriter or the Company, except expenses to be paid or
reimbursed pursuant to Sections 5 and 9 and except the provisions of Section 7
shall not terminate and shall remain in effect.
11. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement
shall inure to the benefit of and be binding upon the several Underwriters, the
Company and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right, remedy
or claim under or in respect of this Agreement, or any provisions herein
contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Underwriter Indemnified Parties, and the
indemnities of the several Underwriters shall also be for the benefit of the
Company Indemnified Parties.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by them respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter, the Company or any person controlling any of them and
shall survive delivery of and payment for the Stock.
13. NOTICES. All statements, requests, notices and agreements hereunder
shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to XX Xxxxx Securities Corporation,
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Head
of Equity Capital Markets (fax: 000-000-0000), with a copy to the Legal
Department (fax: 000-000-0000); provided, however, that any other
notice to an Underwriter pursuant to Section 7 hereof shall be
delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party
hereto by XX Xxxxx upon request ;
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Transkaryotic Therapies, Inc. Attention:
Xxxxxx X. Xxxxxxx, Chief Financial Officer.
Any such statements, requests, notices and agreements shall take effect
at the time of receipt.
Page 22
14. DEFINITION OF CERTAIN TERMS. For purposes of this Agreement, (a)
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading and (b) "subsidiary" has the meaning set forth in Rule 405 of the
Rules and Regulations.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. UNDERWRITERS' INFORMATION. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the Underwriters' Information consists
solely of the following information in the Prospectus: the statements concerning
the Underwriters contained in the third paragraph under the table in the section
called "Underwriting."
17. AUTHORITY OF THE REPRESENTATIVES. In connection with this Agreement,
you will act for and on behalf of the several Underwriters, and any action taken
under this Agreement by the Representatives, will be binding on all the
Underwriters.
18. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
19. GENERAL. This Agreement constitutes the entire agreement of the parties
to this Agreement and supersedes all prior written or oral and all
contemporaneous oral agreements, understandings and negotiations with respect to
the subject matter hereof. In this Agreement, the masculine, feminine and neuter
genders and the singular and the plural include one another. The section
headings in this Agreement are for the convenience of the parties only and will
not affect the construction or interpretation of this Agreement. This Agreement
may be amended or modified, and the observance of any term of this Agreement may
be waived, only by a writing signed by the Company and the Representatives.
20. COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
[SIGNATURES ON NEXT PAGE.]
Signature Page to Underwriting Agreement
If the foregoing is in accordance with your understanding of the
agreement between the Company and the several Underwriters, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
TRANSKARYOTIC THERAPIES, INC.
By: /s/ Xxxxxxx X Xxxxxx
-------------------------
Name: Xxxxxxx X Xxxxxx
Title:
Accepted as of the date first above written:
XX XXXXX SECURITIES CORPORATION
DEUTSCHE BANC ALEX. XXXXX
PACIFIC GROWTH EQUITIES, INC.
LEERINK XXXXX & CO.
Acting on their own behalf and as the Representatives of
the several Underwriters referred to in the foregoing
Agreement
By: XX XXXXX SECURITIES CORPORATION
By: /s/ Xxxx Xxxxxx
----------------------------
Authorized Signatory
SCHEDULE A
Number of Firm Shares Number of Optional
Name to be Purchased Shares to be Purchased
---- --------------- ----------------------
XX Xxxxx Securities Corporation 1,260,000 189,000
Deutsche Banc Alex. Xxxxx 980,000 147,000
Pacific Growth Equities, Inc. 420,000 63,000
Leerink Xxxxx & Co. 140,000 21,000
------- ------
TOTALS 2,800,000 420,000
EXHIBIT I
[Form of Lock-Up Agreement]
_________, 2001
XX Xxxxx Securities Corporation
Deutsche Banc Alex. Xxxxx
Pacific Growth Equities, Inc.
Leerink Xxxxx & Co.
As Representatives of the
several Underwriters
c/o XX Xxxxx Securities Corporation
Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Transkaryotic Therapies, Inc. Shares of Common Stock
Dear Sirs:
In order to induce XX Xxxxx Securities Corporation ("XX Xxxxx"),
Deutsche Banc Alex. Xxxxx, Pacific Growth Equities, Inc. and Leerink Xxxxx & Co.
to enter into a certain underwriting agreement (the "Underwriting Agreement")
with Transkaryotic Therapies, Inc., a Delaware corporation (the "Company"), with
respect to the public offering (the "Offering") of shares of the Company's
Common Stock, par value $0.01 per share ("Common Stock"), the undersigned hereby
agrees that for a period of ninety (90) days following the date of the final
prospectus filed by the Company with the Securities and Exchange Commission in
connection with the Offering, the undersigned will not, without the prior
written consent of XX Xxxxx, directly or indirectly, offer, sell, assign,
transfer, pledge, contract to sell, or otherwise dispose of, any shares of
Common Stock (including, without limitation, Common Stock which may be deemed to
be beneficially owned by the undersigned in accordance with the rules and
regulations promulgated under the Securities Act of 1933, as the same may be
amended or supplemented from time to time (the "Securities Act")) or securities
convertible into or exercisable or exchangeable into Common Stock (the "Company
Securities").
The foregoing paragraph shall not apply to the sale of up to an
aggregate of fifty thousand (50,000) shares of Common Stock (subject to
adjustment for stock splits, stock dividends, combinations and similar
recapitalizations) by officers and directors of the Company who have signed a
lock-up agreement pursuant to the Underwriting Agreement in connection with the
Offering, the allocation of such shares among such officers and directors to be
determined by the Company in its sole discretion.
Notwithstanding the foregoing, the undersigned may transfer Company
Securities (a) as a BONA FIDE gift or gifts, provided that the donee or donees
thereof agree to be bound in writing by the restrictions set forth herein, (b)
to any trust for the direct or indirect benefit of the undersigned or the
immediate family of the undersigned, provided that the trustee of the trust
agrees to be bound in writing by the restrictions set forth herein, and provided
further that any such transfer shall not involve a disposition for value, (c)
with the consent of the Company in accordance with the provisions of the second
paragraph of this Agreement, or (d) with the prior written consent of XX Xxxxx.
For purposes of this Agreement, the term "immediate family" shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin.
This Agreement shall automatically terminate on December 21, 2001 in
the event that no shares of Common Stock have been purchased and paid for
pursuant to the Underwriting Agreement on or prior to such date.
[Signatory]
By:_____________________________
Name:
Title: