EXHIBIT 1.1
$90,000,000
Transkaryotic Therapies, Inc.
1.25% Convertible Senior Notes due May 15, 2011
Underwriting Agreement
April 28, 2004
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇▇ & Co., LLC
Pacific Growth Equities, LLC
RBC Capital Markets Corporation
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Transkaryotic Therapies, Inc., a Delaware corporation (the "COMPANY"),
proposes to issue and sell to the several Underwriters listed in Schedule I
hereto (the "UNDERWRITERS"), for whom ▇.▇. ▇▇▇▇▇▇ Securities Inc. is acting as
representative (the "REPRESENTATIVE"), $90,000,000 aggregate principal amount of
its 1.25% Convertible Senior Notes due 2011 (the "FIRM SECURITIES") to be issued
pursuant to the provisions of an Indenture dated as of May 4, 2004 (the "BASE
INDENTURE") between the Company and The Bank of New York, as Trustee (the
"TRUSTEE"), and a first supplemental indenture dated as of May 4, 2004 (the
"FIRST SUPPLEMENTAL INDENTURE", together with the Base Indenture, the
"INDENTURE") between the Company and the Trustee. The Company also proposes to
issue and sell to the Underwriters not more than an additional $10,000,000
aggregate principal amount of its 1.25% Convertible Senior Notes due 2011 (the
"ADDITIONAL SECURITIES") if and to the extent that the Underwriters shall have
determined to exercise the right to purchase such 1.25% Convertible Senior Notes
due 2011 granted to the Underwriters in Section 1 hereof. The Firm Securities
and the Additional Securities are hereinafter collectively referred to as the
"SECURITIES". The Securities will be convertible into shares (the "UNDERLYING
SECURITIES") of common stock of the Company, par value $.01 per share (the
"COMMON STOCK").
The Company hereby confirms its agreement with the several Underwriters
concerning the purchase and sale of the Securities, as follows:
1. Registration Statement. The Company has (i) prepared and filed with
the Securities and Exchange Commission (the "COMMISSION") under the Securities
Act of 1933, as amended,
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and the rules and regulations of the Commission thereunder (collectively, the
"SECURITIES ACT"), a registration statement on Form S-3 (File No. 333-51772) (as
amended and supplemented to the date of this Agreement, the "REGISTRATION
STATEMENT", which term shall include the information, if any, deemed pursuant to
Rule 430A under the Securities Act to be part of the registration statement at
the time of its effectiveness) including a prospectus, covering the registration
of certain securities of the Company, including the Securities and (ii) filed
with, or transmitted for filing to, or shall promptly hereafter file with or
transmit for filing to, the Commission a prospectus supplement specifically
relating to the Securities (the "PROSPECTUS SUPPLEMENT") pursuant to Rule 424(a)
under the Securities Act. The term "BASIC PROSPECTUS" means the prospectus
included in the Registration Statement at the time of its effectiveness. The
term "PROSPECTUS" means the Basic Prospectus together with the Prospectus
Supplement. The term "PRELIMINARY PROSPECTUS" means a preliminary prospectus
supplement specifically relating to the Securities, together with the Basic
Prospectus. Any reference in this Agreement to the Registration Statement, 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 effective date of the Registration Statement
or the date of such Preliminary Prospectus or the Prospectus, as the case may be
and any reference to "amend", "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "EXCHANGE ACT") that are deemed to
be incorporated by reference therein, and shall not be deemed to refer to the
prospectus supplements filed with the Commission on June 26, 2001, December 13,
2001 and December 20, 2001.
2. Purchase, Sale and Delivery of the Securities. (a) The Company
agrees to issue and sell the Firm Securities to the several Underwriters as
hereinafter provided, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase, severally and not jointly, from the
Company the Firm Securities at a purchase price of 97.0% of the principal amount
thereof (the "PURCHASE PRICE"), in the respective principal amount of Securities
set forth opposite such Underwriter's name in Schedule I hereto plus accrued
interest, if any, from May 4, 2004 to the date of payment and delivery.
(b) On the basis of the representations and warranties contained in
this Agreement, and subject to its terms and conditions, the Company agrees to
sell to the Underwriters the Additional Securities, and the Underwriters shall
have the right to purchase in whole, or from time to time in part, up to
$10,000,000 principal amount of Additional Securities at the Purchase Price plus
accrued interest, if any, from the Closing Date (as defined below) to the date
of payment and delivery. If the Representative, on behalf of the Underwriters,
exercise such option, the Representative shall so notify the Company in writing
not later than 30 days after the date of this Agreement, which notice shall
specify the principal amount of Additional Securities to be purchased by the
Underwriters and the date on which such Additional Securities are to be
purchased. Such date may be the same as the Closing Date but not earlier than
the Closing Date nor later than seven business days after the date of such
notice.
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(c) The Company understands that the Underwriters intend to make a
public offering of the Securities as soon after the effectiveness of this
Agreement as in the judgment of the Representative is advisable, and initially
to offer the Securities on the terms set forth in the Prospectus. The Company
acknowledges and agrees that the Underwriters may offer and sell Securities to
or through any affiliate of an Underwriter and that any such affiliate may offer
and sell Securities purchased by it to or through any Underwriter.
(d) Payment for the Firm Securities shall be made to the Company in
Federal or other funds immediately available in New York City against delivery
of such Firm Securities for the account of the Underwriters at 10:00 a.m., New
York City time, on May 4, 2004, or at such other time on the same or such other
date, not later than May 14, 2004, as shall be designated in writing by the
Representative. The time and date of such payment are hereinafter referred to as
the "CLOSING DATE".
(e) Payment for any Additional Securities shall be made to the Company
in Federal or other funds immediately available in New York City against
delivery of such Additional Securities for the account of the Underwriters at
10:00 a.m., New York City time, on the date specified in the notice described in
Section 2(b) or at such other time on the same or on such other date, in any
event not later than June 7, 2004, as shall be designated in writing by the
Representative. The time and date of such payment are hereinafter referred to as
the "OPTION CLOSING DATE".
(f) Certificates for the Firm Securities and Additional Securities
shall be in definitive form or global form, as specified by the Representative,
and registered in such names and in such denominations as the Representative
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Securities and Additional Securities shall be delivered to
the Representative on the Closing Date or the Option Closing Date, as the case
may be, for the account of the several Underwriters, with any transfer taxes
payable in connection with the transfer of the Securities to the Underwriter
duly paid, against payment of the Purchase Price there for plus accrued
interest, if any, to the date of payment and delivery.
3. Representations and Warranties. The Company represents and warrants
to each Underwriter that:
(a) Preliminary Prospectus. Each Preliminary Prospectus, as of the date
thereof, did not contain any untrue statement of a material fact or omit 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; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in reliance upon and
in conformity with information relating to any Underwriter furnished to the
Company in writing by such Underwriter through the Representative expressly for
use in any Preliminary Prospectus.
(b) Registration Statement and Prospectus. The Registration Statement
has been declared effective by the Commission. No order suspending the
effectiveness of the Registration
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Statement has been issued by the Commission and no proceeding for that purpose
has been initiated or threatened by the Commission. As of the applicable
effective date of the Registration Statement and any amendment thereto, the
Registration Statement complied and will comply in all material respects with
the Securities Act, and did not and will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and as of the
applicable filing date of the Prospectus and any amendment or supplement thereto
and as of the Closing Date and as of the Additional Closing Date, as the case
may be, the Prospectus complied and will comply in all material respects with
the Securities Act, and does not contain and will not contain any untrue
statement of a material fact or omit 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; provided
that the Company makes no representation and warranty with respect to any
statements or omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through the Representative expressly for use in the Prospectus, or
to any statement in or omission from the Form T-1 filed by the Trustee with the
Commission on April 27, 2004.
(c) Incorporated Documents. 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 none of such documents
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;
and any further documents so filed and incorporated by reference in the
Prospectus, when such documents 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 or the Exchange Act, as applicable, and will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(d) Financial Statements. The financial statements and the related
notes thereto of the Company and its consolidated subsidiaries (as defined in
Rule 1-02 of Regulation S-X) ("SUBSIDIARIES"), included or incorporated by
reference in the Prospectus comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as applicable, and
present fairly the consolidated financial position of the Company and its
consolidated Subsidiaries as of the dates indicated and the results of their
operations and the changes in their consolidated cash flows for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles and practices applied on a consistent
basis, except as described in the notes to such financial statements; and the
other financial data set forth in the Prospectus under the captions "Summary
Financial Data" and "Capitalization" have been derived from the accounting
records of the Company and its Subsidiaries and presents fairly the information
shown thereby on a basis consistent with that of the audited financial
statements incorporated by reference in the Registration Statement and
Prospectus.
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(e) No Material Adverse Change. Since the date of the most recent
audited financial statements of the Company included or incorporated by
reference in the Prospectus, there has not been 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 or long-term debt of the Company or any of its Subsidiaries, or
any issuance of any options, warrants, convertible securities or rights to
purchase capital stock of the Company or any of the Subsidiaries, or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, financial position, stockholders'
equity or results of operations of the Company and its Subsidiaries, taken as a
whole (a "MATERIAL ADVERSE EFFECT").
(f) Organization and Good Standing of the Company. The Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus, and has been duly qualified as a foreign
corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect.
(g) Organization and Good Standing of the Company's Subsidiaries. Each
of the Company's Subsidiaries has been duly incorporated and is validly existing
as a corporation under the laws of its jurisdiction of incorporation, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each jurisdiction in which it owns or leases properties or
conducts any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect; and 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 are owned by the Company, directly or indirectly, free and
clear of all liens, encumbrances, security interests and claims, except for TKT
Europe-5S AB and Eminent Pharmaceutical Services, LLC, in which, with respect to
each such entity, the Company owns 80% of the total outstanding shares of
capital stock. 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, 2003,
including the exhibits thereto or such corporations as would not be required to
be listed as a subsidiary under Item 601 of Regulation S-K under the Securities
Act.
(h) Due Authorization. This Agreement has been duly authorized,
executed and delivered by the Company.
(i) Capitalization. The Company has an authorized capitalization as set
forth in the Prospectus under the caption "Capitalization"; there are no
outstanding options to purchase, or any rights or warrants to subscribe for, or
any securities or obligations convertible into, or any
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contracts or commitments to issue or sell, any shares of Common Stock, any
shares of capital stock of any subsidiary, or any such warrants, convertible
securities or obligations, except as set forth in the Prospectus and except for
options granted under, or contracts or commitments pursuant to, the Company's
previous or currently existing stock option and other similar officer, director
or employee benefit plans; except for stock purchase plans, there are no
contracts, commitments, agreements, arrangements, understandings or undertakings
of any kind to which the Company is a party, or by which it is bound, granting
to any person the right to require either the Company to file a registration
statement under the Securities Act with respect to any securities of the Company
or requiring the Company to include such securities with the Securities
registered pursuant to any registration statement.
(j) The Securities. The Securities have been duly authorized by the
Company, and when duly executed, authenticated, issued and delivered as provided
in the Indenture (assuming due authentication of the Securities by the Trustee)
and paid for as provided herein will constitute valid and binding obligations of
the Company, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and remedies generally,
and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding at law or in equity); and the
Securities will conform to the descriptions thereof in the Prospectus.
(k) The Indenture. The Indenture has been duly authorized by the
Company, and when executed and delivered by the Company (assuming the due
authorization, execution and delivery by the Trustee) will be a valid and
binding instrument of the Company; enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity); as of the Closing Date, the Indenture has been duly qualified under
the Trust Indenture Act of 1939, as amended; and the Indenture will conform to
the description thereof in the Prospectus.
(l) The Common Stock. Upon issuance and delivery of the Securities in
accordance with the Agreement and the Indenture, the Securities will be
convertible at the option of the holder thereof into shares of the Underlying
Securities in accordance the terms of the Securities; the Underlying Securities
reserved for issuance upon conversion of the Securities have been duly
authorized and reserved and, when issued upon conversion of the Securities in
accordance with the terms of the Securities, will be validly issued, fully paid
and non-assessable, and the issuance of the Underlying Securities will not be
subject to any preemptive or similar rights. The shares of Common Stock
outstanding on the date hereof have been duly authorized and are validly issued,
fully paid and non-assessable; except as otherwise disclosed in the Prospectus,
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 Common Stock under
the Company's Articles of Incorporation or Bylaws or under the Delaware General
Corporation Law.
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(m) No Violation or Default. Neither the Company nor any of its
Subsidiaries is, or with the giving of notice or lapse of time or both would be,
in violation of or in default under, (i) its Certificate of Incorporation,
Bylaws or other organizational documents, (ii) any law, statute or judgment,
order, rule or regulation of any court or arbitrator or governmental or
regulatory authority or (iii) under any indenture, 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 it or any of them or any of their respective
properties is bound, except in the case of clauses (ii) and (iii) above, for
violations and defaults which, individually or in the aggregate, would not have
a Material Adverse Effect.
(n) No Conflicts. The issue and sale of the Securities and the issuance
by the Company of the Underlying Securities upon conversion of the Securities
and the performance by the Company of all its obligations under the Securities,
the Indenture and this Agreement, and the consummation of the transactions
herein and therein contemplated, (i) will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its Subsidiaries under, any
indenture, 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, (ii)
nor will any such action result in any violation of (x) the provisions of the
Certificate of Incorporation or the Bylaws of the Company or (y) any applicable
law or statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company, its Subsidiaries or any of
their respective properties, except in the case of clauses (i) and (ii)(y)
above, for such conflicts, defaults or violations that would not individually or
in the aggregate, have a Material Adverse Effect.
(o) No Consents Required. No consent, approval, authorization, order,
license, registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Securities or the
consummation by the Company of the transactions contemplated by this Agreement
or the Indenture, except such consents, approvals, authorizations, orders,
licenses, registrations or qualifications as may be required under state
securities or Blue Sky Laws in connection with the purchase and distribution of
the Securities by the Underwriters or under the Securities Act with respect to
the registration of the Securities and the Underlying Securities.
(p) Legal Proceedings. Other than as set forth in the Prospectus, there
are no legal or governmental investigations, actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or affecting the
Company or any of its Subsidiaries or any of their respective properties or to
which the Company or any of its Subsidiaries is or may be a party or to which
any property of the Company or any of its Subsidiaries is or may be the subject
which, if determined adversely to the Company or any of its Subsidiaries, could
individually or in the aggregate have, or reasonably be expected to have, (i) a
Material Adverse Effect, or (ii) a material adverse effect on the consummation
of the transactions contemplated in this Agreement.
(q) Investment Company Act. The Company is not and, after giving effect
to the offering and sale of the Securities and the application of the proceeds
thereof as described in the
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Prospectus, will not be required to register as an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(r) Independent Accountants. To the knowledge of the Company, after due
inquiry, ▇▇▇▇▇ & Young LLP, who have certified the consolidated financial
statements of the Company included or incorporated by reference in the
Prospectus are independent public accountants as required under the Securities
Act.
(s) Taxes. The Company and its Subsidiaries have filed all federal,
state, local and foreign tax returns which have been required to be filed and
have paid all taxes shown thereon and all assessments received by them or any of
them to the extent that such taxes have become due and are not being contested
in good faith, except where the failure to do so would not have a Material
Adverse Effect; and, except as disclosed in the Prospectus, to the Company's
knowledge, there is no tax deficiency which has been or might reasonably be
expected to be asserted or threatened against the Company or any Subsidiary.
(t) No Labor Disputes. No labor disputes exist or, to the best of the
Company's knowledge, is imminent, with employees of the Company or of its
Subsidiaries which are likely 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.
(u) Compliance With Environmental Laws. Each of the Company and its
Subsidiaries is in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
or the environment or imposing liability or standards of conduct concerning any
Hazardous Material (collectively, "ENVIRONMENTAL LAWS"), except where such
non-compliance with Environmental Laws could not, singly or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The term "HAZARDOUS
MATERIAL" means (i) any "HAZARDOUS SUBSTANCE" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, (ii)
any "HAZARDOUS WASTE" as defined by the Resource Conservation and Recovery Act,
as amended, (iii) any petroleum or petroleum product, (iv) any polychlorinated
biphenyl, and (v) any pollutant or contaminant or hazardous, dangerous, or toxic
chemical, material, waste or substance regulated under or within the meaning of
any other Environmental Law.
(v) Intellectual Property. For the purposes hereof, "INTELLECTUAL
PROPERTY" means (i) patents and patent applications, (ii) trademarks, service
marks, trade names, domain names, trade dress and logos, (iii) copyrights, (iv)
computer software (other than off-the-shelf software that is commercially
available), (v) confidential and proprietary information, including trade
secrets, know-how, inventions, technology, whether patented or not, and (v)
registrations and applications for registration of the foregoing.
(i) The Company and its Subsidiaries own or have valid
licenses, or, to the Company's knowledge, can acquire rights on
reasonable terms, to use all Intellectual Property used by the Company
and its Subsidiaries in the operation of the business
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currently conducted or as contemplated to be conducted by them as
described in the Prospectus (collectively "COMPANY INTELLECTUAL
PROPERTY"), except where the failure to own, license, or otherwise be
able to acquire, or use such Intellectual Property would not, singly or
in the aggregate, have a Material Adverse Effect. To the Company's
knowledge, each patent owned by or licensed to the Company included
within the Company Intellectual Property is valid and enforceable, and
has not been adjudged invalid or unenforceable in whole or in part.
(ii) Except as disclosed in the Prospectus, to the Company's
knowledge, the operation of the business of the Company and its
Subsidiaries as currently conducted or as contemplated to be conducted
by them as described in the Prospectus, including services provided by,
processes used by, or products manufactured or sold by them, and the
use of the Company Intellectual Property, do not conflict with,
infringe, misappropriate or otherwise violate the Intellectual Property
of any third party, which conflict, infringement, misappropriation or
violation would have a Material Adverse Effect, and no actions, suits,
claims or proceedings have been asserted, are pending or, to the
knowledge of the Company after due inquiry, threatened against the
Company or any of its Subsidiaries (i) alleging any of the foregoing,
or (ii) based upon or challenging or seeking to deny or restrict the
use by the Company or any of its Subsidiaries of any of the Company
Intellectual Property, which, singly or in the aggregate, would have a
Material Adverse Effect.
(iii) Except as disclosed in the Prospectus, to the Company's
knowledge, no third party is engaging in any activity that infringes,
misappropriates or otherwise violates the Company Intellectual
Property, which infringement, misappropriation or violation would have
a Material Adverse Effect.
(iv) With respect to each material agreement governing the
license to or by the Company or any of its Subsidiaries of any Company
Intellectual Property, including those agreements filed with the
Registration Statement or incorporated therein by reference and the
agreements referenced in the Supplemental Prospectus, (a) such
agreement is valid and binding against the Company or its Subsidiaries,
as the case may be, and in full force and effect; (b) the Company has
not received any notice of termination or cancellation under such
agreement, received any notice of breach or default under such
agreement, which breach has not been cured, and granted to any other
third party any rights, adverse or otherwise, under such agreement that
would constitute a breach of such agreement; and (c) neither the
Company (or any of its Subsidiaries) or, to the Company's knowledge,
any other party to such agreement, is in breach or default thereof in
any material respect, and no event has occurred that, with notice or
lapse of time, would constitute such a breach or default or permit
termination, modification or acceleration under such agreement.
(w) Licenses and Permits. 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
9
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
statutes and regulations, except where the failure so to comply would not ,
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 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, would result in a Material Adverse Effect.
(x) Clinical Trials. 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 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.
(y) Title to Real and Personal Property. The Company and its
Subsidiaries have good and marketable title in fee simple to all real property
and good and marketable title to all personal property owned by them, or have
valid rights to lease or otherwise use all property which is material to the
business of the Company and its Subsidiaries, in each case free and clear of all
liens, encumbrances and defects except such as are described in the Prospectus
or such as do not interfere with the use made and proposed to be made of such
property by the Company and its Subsidiaries and would not have, individually or
in the aggregate, a Material Adverse Effect; and any real property and buildings
held under lease by the Company and its Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as are not
material and do not interfere with the use made and proposed to be made of such
property and buildings by the Company and its Subsidiaries, in each case except
as described in the Prospectus.
(z) Compliance with ERISA. The Company is in compliance with all
presently applicable provisions of the Employee Retirement Income Security Act
of 1974, as amended, including the regulations and published interpretations
thereunder ("ERISA"), except where the failure to be in such compliance would
not, individually or in the aggregate, have a Material Adverse Effect; no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company would have any
liability, except where such liability would not, individually or in the
aggregate, have a Material Adverse Effect; except for matters that would not,
individually or in the aggregate, have a Material Adverse Effect, the Company
has not incurred and does not expect to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Section 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations
10
thereunder ("CODE"); and each "pension plan" for which the Company and each of
its Subsidiaries would have any liability that is intended to be qualified under
Section 401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which would reasonably be
expected cause the loss of such qualification; and no "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of Code or "accumulated
funding deficiency" (as defined in section 302 of ERISA) has occurred.
(aa) Accounting Controls. (i) The Company and each of its Significant
Subsidiaries (as such term is defined in Regulation S-X under the Securities
Act) maintains a system of internal accounting controls sufficient to provide
reasonable assurances that (A) transactions are executed in accordance with
management's general or specific authorization; (B) transactions are recorded as
necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences, and (ii) the Company maintains
a system of "disclosure controls and procedures" (as such term is defined in
Rule 13a-14(c) under the Exchange Act).
(bb) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company is in substantial compliance with
the applicable provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 that are effective.
(cc) Insurance. 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.
(dd) Adequate Disclosure. There is no franchise, lease, contract,
agreement or document required by the Securities Act to be described in the
Prospectus which is not described as required; and all descriptions of any such
franchises, leases, contracts, agreements or documents contained in the
Prospectus are accurate and complete descriptions of such documents in all
material respects. 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.
(ee) Forward-Looking Statements. 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.
(ff) Reporting Requirements. 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(g) 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
11
notification that the Commission or the Nasdaq National Market is contemplating
terminating such registration or listing.
(gg) No Rated Securities. There are not outstanding any securities of
or guaranteed by the Company that are rated by any "nationally recognized
statistical rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act.
4. Covenants of the Company. The Company covenants and agrees with each
of the several Underwriters as follows:
(a) Filing of Prospectus Supplement. The Company will prepare the
Prospectus Supplement in a form approved by the Representative and will file
such Prospectus Supplement pursuant to Rule 424(b) under the Securities Act not
later than the second business day following the date hereof.
(b) Delivery of Copies. The Company will furnish promptly to the
Representative and to counsel for the Underwriters a signed copy of the
Registration Statement as originally filed with the Commission, and each
amendment thereto filed with the Commission, including all consents and exhibits
filed therewith. The Company will deliver promptly to the Representative in New
York City such number of the following documents as the Representative shall
reasonably request: (i) the Prospectus (not later than 10:00 A.M., New York
time, on the business day following the execution and delivery of this
Agreement), (ii) any document incorporated by reference in the Prospectus
(excluding exhibits thereto) and (iii) during the Prospectus Delivery Period, as
many copies of the Prospectus (including all amendments and supplements thereto
and documents incorporated by reference therein) as the Representative may
reasonably request. As used herein, the term "PROSPECTUS DELIVERY PERIOD" means
such period of time after the first date of the public offering of the
Securities as in the opinion of counsel for the Underwriters a prospectus
relating to the Securities is required by law to be delivered in connection with
sales of the Securities by any Underwriter or dealer.
(c) Amendments or Supplements. Before filing any amendment or
supplement to the Registration Statement or the Prospectus with respect to the
Securities, the Company will furnish to the Representative and counsel for the
Representative a copy of the proposed amendment or supplement for review and
will not file any such proposed amendment or supplement to which the
Representative shall reasonably object by notice in writing to the Company.
(d) Notice to Representative. The Company will advise the
Representative promptly, and confirm such advice in writing, (i) when any
amendment to the Registration Statement has been filed or becomes effective;
(ii) when any supplement to the Prospectus or any amendment to the Prospectus
has been filed; (iii) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or the
receipt of any comments from the Commission relating to the Registration
Statement or any other request by the Commission for any additional information;
(iv) of the issuance by the Commission of any order suspending the effectiveness
of the Registration Statement or preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or the initiation or threatening of any
proceeding for that purpose; (v) of the occurrence of any event within the
Prospectus Delivery
12
Period 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 a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not
misleading; and (vi) of the receipt by the Company of any notice with respect to
any suspension of the qualification of the Securities for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and the Company will use its best efforts to prevent the issuance of
any such order suspending the effectiveness of the Registration Statement,
preventing or suspending the use of any Preliminary Prospectus or the Prospectus
or suspending any such qualification of the Securities and, if any such order is
issued, will use best efforts to obtain as soon as possible the withdrawal
thereof.
(e) Ongoing Compliance of the Prospectus. The Company shall 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 Securities; if during the Prospectus Delivery Period (i)
any event shall occur or condition shall exist 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 a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances existing when the Prospectus is delivered to a purchaser, not
misleading or (ii) it is necessary to amend or supplement the Prospectus to
comply with law, the Company will immediately notify the Underwriters thereof
and forthwith prepare and, subject to paragraph (c) above, file with the
Commission and furnish to the Underwriters and to such dealers as the
Representative may designate, such amendments or supplements to the Prospectus
as may be necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances existing when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus
will comply with law.
(f) Use of Proceeds. The Company will use the net proceeds received by
the Company from the sale of the Securities pursuant to this Agreement in the
manner specified in the Prospectus under the caption "Use of Proceeds".
(g) Payments of Costs and Expenses. Whether or not the transactions
contemplated in this Agreement are consummated or this Agreement is terminated,
the Company will pay or cause to be paid all costs and expenses incident to the
performance of its obligations hereunder, including without limiting the
generality of the foregoing, all fees, costs and expenses (i) incident to the
preparation, issuance, execution, authentication and delivery of the Securities,
including any expenses of the Trustee, (ii) incident to the preparation,
printing, distribution and filing under the Securities Act of the Preliminary
Prospectus and the Prospectus (including in each case all exhibits, amendments
and supplements thereto), (iii) related to any filing with the National
Association of Securities Dealers, Inc., (iv) in connection with the printing
(including word processing and duplication costs) and delivery of this
Agreement, the Indenture and any Legal Investment Survey and the furnishing to
Underwriters and dealers of copies of the Preliminary Prospectus and Prospectus,
including mailing and shipping, as herein provided, (v) payable to rating
agencies in connection with the rating of the Securities, (vi) in connection
with the quotation of the Underlying Securities on the National Association of
Securities Dealers
13
Automated Quotations National Market (the "NASDAQ NATIONAL MARKET"), and (vii)
any expenses incurred by or on behalf of the Company in connection with a "road
show" presentation to potential investors (it being understood that, except as
expressly set forth in this Section 4(h) and elsewhere in this Agreement
(including, but not limited to, Sections 6 and 9 hereof), the Company shall have
no obligation to pay any costs and expenses of the Underwriters).
(h) No Stabilization. Neither the Company nor any of its affiliates
will take any action prohibited by Regulation M under the Exchange Act, in
connection with the distribution of the Securities contemplated hereby.
(i) Reservation of Common Stock. The Company will reserve and keep
available at all times, free of pre-emptive rights, shares of Common Stock for
the purpose of enabling the Company to satisfy all obligations to issue the
Underlying Securities upon conversion of the Securities.
(j) Listing of Underlying Securities. The Company will use its
reasonable best efforts to cause all shares of the Underlying Securities to be
listed for quotation on the Nasdaq National Market.
(k) Agreement Not to Offer or Sell Additional Securities. Without the
prior written consent of ▇.▇. ▇▇▇▇▇▇ Securities Inc., the Company will not,
during the period ending 90 days after the date hereof, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock or (iii) file with the Commission a registration statement
under the Securities Act relating to any additional shares of its Common Stock
or securities convertible into, or exchangeable for, any shares of its Common
Stock, or publicly disclose the intention to effect any transaction described in
clause (i), (ii) or (iii), whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the sale of the Securities under this Agreement or the issuance of the
Underlying Securities, (B) the grant by the Company of Common Stock or stock
options in the ordinary course of business pursuant to any stock option, stock
purchase, stock bonus or other stock plan or employee benefit plan or dividend
reinvestment plan existing as of the date hereof, or rights pursuant to The
Rights Agreement dated December 13, 2000 by and between the Company and
Equiserve Trust Company, N.A. and (C) the issuance by the Company of shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for 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 the Company's securities pursuant to
this sub-clause (C) agrees in writing that all such securities remain subject to
restrictions substantially similar to those contained in this paragraph.
(l) Furnishing Reports. During the period of five years from the date
hereof, the Company will deliver to the Representative and, upon request, to
each of the other Underwriters,
14
(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 Common Stock is listed or quoted, in
each case other than such documents as are available on the internet.
(m) Unaudited Financial Statements. Prior to the Closing Date or the
Option Closing Date, as the case may be, the Company will furnish to the
Representative, 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.
(n) Press Releases. Prior the 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
Representative is notified), without the prior written consent of the
Representative, unless in the judgment of the Company and its counsel, and after
notification to the Representative, such press release or communication is
required by law.
5. Conditions to the Underwriters' Obligations. The several obligations
of the Underwriters hereunder to purchase the Firm Securities on the Closing
Date or the Option Securities on the Option Closing Date, as the case may be,
are subject to the performance by the Company of its obligations hereunder and
to the following additional conditions:
(a) No Stop Order. No order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceeding for such purpose
shall be pending before or threatened by the Commission, and any request for
additional information on the part of the Commission (to be included in the
Registration Statement or the Prospectus or otherwise) shall have been complied
with to the reasonable satisfaction of the Representative. The Prospectus shall
have been timely filed with the Commission in accordance with Section 4(a)
hereof.
(b) Representations and Warranties. The representations and warranties
of the Company contained herein are true and correct on and as of the Closing
Date or the Option Closing Date, as the case may be, as if made on and as of the
Closing Date or the Option Closing Date, as the case may be, and the Company
shall have complied with all agreements and all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date or the Option
Closing Date, as the case may be.
(c) No Material Adverse Change. Subsequent to the execution and
delivery of this Agreement, there shall not have been any (i) change in the
capital stock or long-term debt of the Company or any of the Subsidiaries or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the business, its financial condition,
management or results of operations of the Company and its Subsidiaries, taken
as a whole, otherwise than as set forth in the Prospectus; or (ii) any
suspension or material limitation
15
of trading in the capital stock of the Company on the Nasdaq National Market,
the effect of which in the judgment of the Representative makes it impracticable
or inadvisable to proceed with the offering or the delivery of the Securities on
the Closing Date or the Option Closing Date, as the case may be, on the terms
and in the manner contemplated by this Agreement and the Prospectus.
(d) Officer's Certificate. The Representative shall have received on
and as of the Closing Date or the Option Closing Date, as the case may be, a
certificate of the Chief Financial Officer or Chief Accounting Officer of the
Company and one additional senior executive officer of the Company, satisfactory
to the Representative to the effect set forth in Sections 5(a) and (b) and to
the further effect that there has not occurred any material adverse change, or
any development involving a prospective material adverse change, in or affecting
the business, financial position, stockholders' equity or results of operations
of the Company and its Subsidiaries, taken as a whole from that set forth in the
Prospectus.
(e) Opinion of Counsel for the Company. ▇▇▇▇ and ▇▇▇▇ LLP, counsel for
the Company, shall have furnished to the Underwriters their written opinion,
dated the Closing Date or the Option Closing Date, as the case may be, in form
and substance satisfactory to the Representative, 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 and has all corporate power and authority to carry on its
business and to own, lease and operate its properties, as such business
and properties are described in the Prospectus; the Company is duly
qualified and is in good standing as a foreign corporation authorized
to do business in the Commonwealth of Massachusetts;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus under the heading "Capitalization";
(iii) the Securities have been duly authorized and, when
executed by the Company and authenticated by the Trustee in accordance
with the terms of the Indenture and delivered to the Underwriters
against payment therefore as provided by this Agreement, will be legal,
valid and binding obligations of the Company, entitled to the benefits
of the Indenture, subject, as to their binding nature, to bankruptcy,
insolvency, fraudulent transfer, moratorium, reorganization and similar
laws of general applicability relating to or affecting creditors'
rights to general equity principles;
(iv) the Underlying Securities reserved for issuance upon
conversion of the Securities have been duly authorized and reserved
and, when issued upon conversion of the Securities in accordance with
the terms of the Securities, will be validly issued, fully paid and
non-assessable and the issuance of the Underlying Securities will not
be subject to any preemptive or similar rights under the Company's
Articles of Incorporation or Bylaws or under the Delaware General
Corporation Law;
16
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) the Indenture has been duly authorized, executed and
delivered by the Company and, assuming the due authorization, execution
and delivery thereof by the Trustee, constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, subject, as to its binding nature and
enforceability, to bankruptcy, insolvency, fraudulent transfer,
moratorium, reorganization and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and the Indenture has been duly qualified under the Trust
Indenture Act;
(vii) each of the Indenture and the Securities conform in all
material respects to the description thereof contained in the
Prospectus under the caption "Description of Notes";
(viii) no filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of any United
States federal or Massachusetts state governmental authority or agency
is necessary for the issuance and sale of the Securities and the
issuance of the Underlying Securities by the Company pursuant to this
Agreement or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except such as have
been obtained under the Securities Act and the rules and regulations of
the Commission thereunder and the Trust Indenture Act and the rules and
regulations of the Commission thereunder, and such as may be required
under state securities or Blue Sky laws (as to the applicability of
which no opinion need be expressed) in connection with the purchase and
distribution of the Securities by the Underwriters;
(ix) 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,
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;
(x) to such counsel's knowledge, there are no action,
proceeding or litigation pending or threatened against the Company
before any court, governmental or administrative agency or body that is
required by the Securities Act or the rules and
17
regulations of the Commission thereunder to be described in the
Registration Statement or the Prospectus that is not so described;
(xi) the Company is not and, after giving effect to the
offering and sale of the 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;
(xii) the statements in the Prospectus under the captions
"Description of Notes" and "Certain United States Federal Income Tax
Considerations", insofar as such statements constitute summaries of the
legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters,
documents or proceedings;
(xiii) the Registration Statement, as of its effective date,
and the Prospectus, as of its date, in each case 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 of the
Commission thereunder; and
(xiv) the documents incorporated by reference in the
Prospectus (other than the financial statements and other financial
data, including notes and schedules contained 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.
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 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 or any further amendment or supplement thereto
made by the Company prior to the Closing Date or the Option Closing
Date, as the case may be, 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 date hereof, 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
or the Option Closing Date, as the case may be, the Prospectus as
amended or supplemented 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
18
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 other financial, statistical or
accounting data and information set forth or referred to in the
Registration Statement or the Prospectus as amended or supplemented,
(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
intellectual property or regulatory counsel.
(f) Opinion of Intellectual Property and Regulatory Counsel.
Intellectual property counsel and regulatory counsel shall have furnished to the
Representative such counsels' written opinions, as counsels to the Company,
addressed to the Underwriters and dated the Closing Date or the Option Closing
Date, as the case may be, in form and substance reasonably satisfactory to the
Representative, to such effect as the Underwriters have previously specified to
the Company.
(g) Comfort Letter. On the date of this Agreement and on the Closing
Date or the Option Closing Date, as the case may be, ▇▇▇▇▇ & Young LLP shall
have furnished to the Underwriters letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to the Representative,
containing statements and information of the type customarily included in
accountants "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained or incorporated by
reference in Prospectus as of a date no more than three business days prior to
the date hereof or prior to the Closing Date or Option Closing Date, as the case
may be.
(h) Opinion of Counsel for the Underwriters. The Underwriters shall
have received on and as of the Closing Date or the Option Closing Date, as the
case may be, an opinion of ▇▇▇▇▇▇▇▇ & Sterling LLP, counsel to the Underwriters,
in form and substance satisfactory to the Representative.
(i) Lock-up Agreements. The "lock-up" agreements, each substantially in
the form of Exhibit A hereto, between the Underwriters and the officers and
directors of the Company and a significant stockholder of the Company identified
on Exhibit A-1 relating to sales and certain other dispositions of shares of
Common Stock or certain other securities, delivered to the Representative on or
before the date hereof, shall be in full force and effect on the Closing Date or
the Option Closing Date, as the case may be.
(j) Listing of the Underlying Securities. An application for the
listing of the Underlying Securities shall have been submitted to the Nasdaq
National Market.
(k) Additional Documents. On or prior to the Closing Date or the Option
Closing Date, as the case may be, the Company shall have furnished to the
Underwriters such further certificates and documents as the Underwriters or
their counsel shall reasonably request.
6. Indemnity and Contribution.
19
(a) Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including without limitation the legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
Preliminary Prospectus (and any amendment or supplement thereto) or the
Prospectus (and any amendment or supplement thereto if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any untrue statement
or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Underwriter furnished to the Company
in writing by such Underwriter through the Representative expressly for use
therein.
(b) Indemnification of the Company. Each Underwriter agrees, severally
and not jointly, to indemnify and hold harmless the Company, its directors, its
officers and each person who controls the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Company to each Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through the Representative expressly for use in
the Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto.
(c) Notice and Procedures. If any suit, action, proceeding (including
any governmental or regulatory investigation), claim or demand shall be brought
or asserted against any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"INDEMNIFIED PERSON") shall promptly notify the person against whom such
indemnity may be sought (the "INDEMNIFYING PERSON") in writing, provided that
the failure to so notify such Indemnifying Person shall not relieve the
Indemnifying Person of its obligations under Section 6(a) or (b), as applicable,
except to the extent the Indemnifying Person has been materially prejudiced by
such failure and provided further that no such failure to provide notice shall
relieve such Indemnifying Person from any liability that it may have to such
Indemnified person otherwise than under Section 6(a) or (b), as applicable; and
the Indemnifying Person, upon request of the Indemnified Person, shall retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may designate in such
proceeding and shall pay the fees and expenses of such counsel related to such
proceeding. In any such proceeding, any Indemnified Person shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Indemnifying Person and
the Indemnified Person shall have mutually agreed to the contrary, (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Person
shall not, in connection with any proceeding or related proceeding in the same
jurisdiction, be liable for the fees and expenses of more than one separate firm
(in addition
20
to any local counsel) for all Indemnified Persons, and that all such fees and
expenses shall be reimbursed as they are incurred. Any such separate firm for
the Underwriters and such control persons of the Underwriters shall be
designated in writing by the Representative and any such separate firm for the
Company, its directors, its officers and such control persons of the Company
shall be designated in writing by the Company. The Indemnifying Person shall not
be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for fees and expenses of counsel as contemplated by the third sentence of
this paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding on terms reasonably satisfactory to such Indemnified Person.
(d) Contribution. If the indemnification provided for in the first and
second paragraphs of this Section 6 is unavailable to an Indemnified Person or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the Underwriters
on the other hand from the offering of the 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 that 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 respective proportions as the net proceeds from the offering
of such Securities (before deducting expenses) received by the Company and the
total discounts and commissions received by the Underwriters bear to the
aggregate offering price of the Securities. The relative fault of the Company on
the one hand and the Underwriters on the other 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 by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
21
(e) Limitation on Liability. The Company and the Underwriters agree
that it would not be just and equitable if contribution pursuant to this Section
6 were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person as a
result of the losses, claims, damages and liabilities referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 6, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Securities purchased by it were offered
exceeds the amount of any damages that 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 Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 6 are several in proportion to the respective principal amount of the
Securities set forth opposite their names in Schedule I hereto, and not joint.
(f) Non-Exclusive Remedies. The remedies provided for in this Section 6
are not exclusive and shall not limit any rights or remedies which may otherwise
be available to any indemnified party at law or in equity.
(g) Survival. The indemnity and contribution agreements contained in
this Section 6 and the representations and warranties of the Company set forth
in this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of the Company, its officers or directors or any other person controlling
the Company and (iii) acceptance of and payment for any of the Securities.
7. Termination. Notwithstanding anything herein contained, this
Agreement may be terminated in the absolute discretion of the Representative, by
notice given to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date or in the case of the Option Securities,
the Option Closing Date, as the case may be, (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, any of the
New York Stock Exchange, the American Stock Exchange, the National Association
of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Company shall have been suspended on any
exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities, or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Representative, is material and
adverse and which, in the judgment of the Representative, makes it impracticable
or inadvisable to offer, sell or deliver the Securities on the terms and in the
manner contemplated in the Prospectus or to enforce contracts for the sale of
the Securities.
22
8. Effectiveness; Defaulting Underwriters. (a) This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
(b) If, on the Closing Date, or the Option Closing Date, as the case
may be, any one or more of the Underwriters shall fail or refuse to purchase
Securities which it or they have agreed to purchase hereunder on such date, and
the aggregate principal amount of Securities which such defaulting Underwriter
or Underwriters agreed but failed or refused to purchase is not more than
one-tenth of the aggregate principal amount of the Securities to be purchased on
such date, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Securities set forth opposite their
respective names in Schedule I (in the column titled "Total") bears to the
aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Underwriters (in the column titled "Total"), or in such
other proportions as the Underwriters may specify, to purchase the Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date; provided that in no event shall the principal amount
of Securities that any Underwriter has agreed to purchase pursuant to Section 1
be increased pursuant to this Section 8 by an amount in excess of one-tenth of
such principal amount of Securities without the written consent of such
Underwriter. If, on the Closing Date or the Option Closing Date, as the case may
be, any Underwriter or Underwriters shall fail or refuse to purchase Securities
which it or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Securities to
be purchased on such date, and arrangements satisfactory to the Underwriters and
the Company for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter or the Company. In any such case either the
Underwriters or the Company shall have the right to postpone the Closing Date or
the Option Closing Date, as the case may be, for up to five full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement and
the Prospectus or in any other document or arrangement, and the Company agrees
to promptly prepare any amendment or supplement to the Registration Statement
and the Prospectus that effects any such changes. As used in this Agreement, the
term "Underwriter" includes, for all purposes of this Agreement unless the
context otherwise requires, any person not listed in Schedule I hereto that,
pursuant to this Section 8, purchases Securities that a defaulting Underwriter
agreed but failed to purchase.
9. Reimbursement. If this Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part of
the Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement or any condition of the Underwriters'
obligations cannot be fulfilled, the Company agrees to reimburse the
Underwriters or such Underwriters as have so terminated this Agreement with
respect to themselves, severally, for all out-of-pocket expenses (including the
reasonable fees and expenses of their counsel) incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder. If this
Agreement is terminated pursuant to Section 8 by reason of the default of one or
more Underwriters, the Company shall not be obligated to reimburse any
defaulting Underwriting on account of those expenses.
23
10. Parties. This Agreement shall inure to the benefit of and be
binding upon the Company, the Underwriters, any controlling persons referred to
herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
11. Notices. Any action by the Underwriters hereunder may be taken by
the Representative on behalf of the Underwriters, and any such action taken by
the Representative shall be binding upon the Underwriters. All notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be given to the Underwriters c/o ▇.▇. ▇▇▇▇▇▇
Securities Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telefax:
(▇▇▇) ▇▇▇-▇▇▇▇); Attention: Syndicate Desk. Notices to the Company shall be
given to it at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, Attention: Chief Financial
Officer.
12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
13. Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument.
24
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
Transkaryotic Therapies, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
The foregoing Underwriting Agreement is
hereby confirmed and accepted as of the date
first above written.
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By: ▇.▇. ▇▇▇▇▇▇ SECURITIES INC.,
Acting on behalf of themselves
and as Representative
of the Underwriters
By: /s/ ▇▇▇▇▇ ▇▇▇▇
________________________________
Name: ▇▇▇▇▇ ▇▇▇▇
Title: Managing Director
25
SCHEDULE I
AGGREGATE
PRINCIPAL
AMOUNT OF FIRM
NOTES TO BE
UNDERWRITER PURCHASED
▇.▇. ▇▇▇▇▇▇ Securities Inc. $54,000,000
▇▇ ▇▇▇▇▇ & Co., LLC $18,000,000
Pacific Growth Equities, LLC $13,500,000
RBC Capital Markets Corporation $ 4,500,000
Total................................. $90,000,000
EXHIBIT A
[FORM OF LOCK-UP LETTER]
___________, 2004
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Sirs and Mesdames:
The undersigned understands that ▇.▇. ▇▇▇▇▇▇ Securities Inc. ("▇.▇.
▇▇▇▇▇▇"), acting on behalf of itself and as representative of the several
Underwriters (as defined below) proposes to enter into an Underwriting Agreement
("UNDERWRITING AGREEMENT") with Transkaryotic Therapies, Inc., a Delaware
corporation (the "COMPANY"), providing for the offering (the "OFFERING") by the
several Underwriters, including ▇.▇. ▇▇▇▇▇▇ (the "Underwriters") of Convertible
Senior Notes (the "SECURITIES"). The Securities will be convertible into shares
of common stock of the company, par value $.01 per share (the "COMMON STOCK").
To induce the Underwriters that may participate in the Offering to
continue their efforts in connection with the Offering, the undersigned hereby
agrees that, without the prior written consent of ▇.▇. ▇▇▇▇▇▇ on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 90 days after the date of the Underwriting Agreement, (1) offer, pledge,
sell contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
lend, or otherwise transfer or dispose of, directly or indirectly, any shares of
Common Stock or any securities convertible into or exercisable or exchangeable
for Common Stock currently or hereafter owned either of record or beneficially
(as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) or (2) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of the Common Stock, or publicly disclose the intention to effect any
transaction described in clause (1) or (2), whether any such transaction
described in clause (1) or (2) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (a) transfers of Common Stock by gift, will or intestacy,
including without limitation transfers by gift, will or intestacy to family
members of the undersigned or to a settlement or trust established under the
laws of any country or (b) transfers or sales of Common Stock pursuant to any
contract, instruction or plan, including a contract, instruction or plan
complying with Rule 10b5-1 of the Regulations of the Exchange Act, that has been
entered into by the undersigned prior to the date of this Lock-Up Agreement
provided that in the event of any transfer pursuant to clause (a), the
transferee shall enter into a lock-up agreement substantially in the form of
this Lock-Up Agreement covering the remainder of the 90-day period referred to
herein. In addition, the
A-1
undersigned agrees that, without the prior written consent of ▇.▇. ▇▇▇▇▇▇ on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 90 days after the date of the Underwriting Agreement,
make any demand for or exercise any right with respect to, the registration of
any shares of Common Stock or any security convertible into or exercisable or
exchangeable for Common Stock. The undersigned also agrees and consents to the
entry of stop transfer instructions with the Company's transfer agent and
registrar against the transfer of the undersigned's shares of Common Stock
except in compliance with the foregoing restrictions.
The undersigned understands that the Company and the Underwriters are
relying upon this Lock-Up Agreement in proceeding toward consummation of the
Offering. The undersigned further understands that this Lock-Up Agreement is
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any offering will only be made pursuant to
an Underwriting Agreement, the terms of which are subject to negotiation between
the Company and the Underwriters.
Very truly yours,
_________________________________________
(Name)
_________________________________________
(Address)
A-2
EXHIBIT A-1
PERSONS SUBJECT TO LOCK-UP
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, III
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Equity Partners, L.P.
A-1-1
Table of Contents
Page
----
1. Registration Statement........................................................... 1
2. ▇▇▇▇▇▇▇▇, Sale and Delivery of the Securities.................................... 2
3. Representations and Warranties................................................... 3
(a) Preliminary Prospectus.................................................. 3
(b) Registration Statement and Prospectus................................... 3
(c) Incorporated Documents.................................................. 4
(d) Financial Statements.................................................... 4
(e) No Material Adverse Change.............................................. 5
(f) Organization and Good Standing of the Company.............................. 5
(g) Organization and Good Standing of the Company's Subsidiaries............ 5
(h) Due Authorization....................................................... 5
(i) Capitalization............................................................. 5
(j) The Securities............................................................. 6
(k) The Indenture........................................................... 6
(l) The Common Stock........................................................... 6
(m) No Violation or Default................................................. 7
(n) No Conflicts............................................................ 7
(o) No Consents Required.................................................... 7
(p) Legal Proceedings....................................................... 7
(q) Investment Company Act.................................................. 7
(r) Independent Accountants.................................................... 8
(s) Taxes................................................................... 8
(t) No Labor Disputes.......................................................... 8
(u) Compliance With Environmental Laws...................................... 8
(v) Intellectual Property................................................... 8
(w) Licenses and Permits.................................................... 9
(x) Clinical Trials......................................................... 10
(y) Title to Real and Personal Property..................................... 10
(z) Compliance with ERISA................................................... 10
(aa) Accounting Controls..................................................... 11
i
(bb) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act...................................................... 11
(cc) Insurance............................................................... 11
(dd) Adequate Disclosure..................................................... 11
(ee) Forward-Looking Statements.............................................. 11
(ff) Reporting Requirements.................................................. 11
(gg) No Rated Securities..................................................... 12
4. Covenants of the Company......................................................... 12
(a) Filing of Prospectus Supplement......................................... 12
(b) Delivery of Copies...................................................... 12
(c) Amendments or Supplements............................................... 12
(d) Notice to Representative................................................ 12
(e) Ongoing Compliance of the Prospectus.................................... 13
(f) Use of Proceeds............................................................ 13
(g) Payments of Costs and Expenses.......................................... 13
(h) No Stabilization........................................................ 14
(i) Reservation of Common Stock................................................ 14
(j) Listing of Underlying Securities........................................... 14
(k) Agreement Not to Offer or Sell Additional Securities.................... 14
(l) Furnishing Reports......................................................... 14
(m) Unaudited Financial Statements.......................................... 15
(n) Press Releases.......................................................... 15
5. Conditions to the Underwriters' Obligations...................................... 15
(a) No Stop Order........................................................... 15
(b) Representations and Warranties.......................................... 15
(c) No Material Adverse Change.............................................. 15
(d) Officer's Certificate.................................................. 16
(e) Opinion of Counsel for the Company..................................... 16
(f) Opinion of Intellectual Property and Regulatory Counsel................... 19
(g) Comfort Letter......................................................... 19
(h) Opinion of Counsel for the Underwriters................................ 19
(i) Lock-up Agreements........................................................ 19
(j) Listing of the Underlying Securities...................................... 19
ii
(k) Additional Documents................................................... 19
6. Indemnity and Contribution...................................................... 19
(a) Indemnification of the Underwriters.................................... 20
(b) Indemnification of the Company......................................... 20
(c) Notice and Procedures.................................................. 20
(d) Contribution........................................................... 21
(e) Limitation on Liability................................................ 22
(f) Non-Exclusive Remedies.................................................... 22
(g) Survival............................................................... 22
7. Termination..................................................................... 22
8. Effectiveness; Defaulting Underwriters.......................................... 23
9. Reimbursement................................................................... 23
10. Parties......................................................................... 24
11. Notices......................................................................... 24
12. Governing Law................................................................... 24
13. Counterparts.................................................................... 24
iii