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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 5)(1)
GENZYME TRANSGENICS CORPORATION
-------------------------------
(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE
------------------------------
(Title of Class of Securities)
37246E 10 5
-----------------------------------
(CUSIP Number)
DAVID J. MCLACHLAN MAUREEN P. MANNING
GENZYME CORPORATION PALMER & DODGE LLP
ONE KENDALL SQUARE ONE BEACON STREET
CAMBRIDGE, MA 02139 BOSTON, MA 02108
(617) 252-7500 (617) 573-0100
- --------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
DECEMBER 28, 1998
----------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g),
check the following box [ ].
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b)
for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of 7 pages)
------------------
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
<PAGE> 2
SCHEDULE 13D
- ------------------------ -----------------------------------
CUSIP NO. 37246E 10 5 Page 2 of 7 pages
---------------
- ------------------------ -----------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
GENZYME CORPORATION
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF THE GROUP (a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
MASSACHUSETTS
- --------------------------------------------------------------------------------
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY OWNED 7,669,365
BY EACH REPORTING
PERSON WITH
--------------------------------------------
8 SHARED VOTING POWER
--------------------------------------------
9 SOLE DISPOSITIVE POWER
7,669,365
--------------------------------------------
10 SHARED DISPOSITIVE POWER
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
7,669,365
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES* [ ]
- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW(11)
41.3%
- --------------------------------------------------------------------------------
14 TYPE OR REPORT PERSON*
CO
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
- --------------------------------------------------------------------------------
<PAGE> 3
Page 3 of 7 pages
This Amendment No. 5 amends and supplements the Statement on Schedule
13D initially filed by Genzyme Corporation, a Massachusetts corporation
("Genzyme"), with the Securities and Exchange Commission (the "Commission") on
July 19, 1993 and the statement on Schedule 13G filed with the Commission on
October 6, 1994, each as thereafter amended by Amendment No. 1 on Schedule 13D
filed with the Commission on February 21, 1995, Amendment No. 2 on Schedule 13D
filed with the Commission on June 21, 1995 and Amendment No. 3 on Schedule 13D
filed with the Commission on August 2, 1995, all as amended and restated by
Amendment No. 4 on Schedule 13D filed with the Commission on August 9, 1996 (as
so amended and restated, the "Schedule 13D").
Except as set forth below, there are no changes in the information set
forth in the Schedule 13D. Capitalized terms used but not otherwise defined
herein shall have the meaning ascribed to them in the Schedule 13D.
The purpose of this Amendment No. 5 is to report the acquisition by
Genzyme of a warrant to purchase shares of Common Stock, $0.01 par value, of
Genzyme Transgenics Corporation.
ITEM 1. SECURITY AND ISSUER.
Item 1 is amended by replacing such item in its entirety with the
following text:
This statement relates to the Common Stock, $0.01 par value ("Common
Stock"), of Genzyme Transgenics Corporation (the "Issuer"). The principal
executive offices of the Issuer are located at Five Mountain Road, Framingham,
Massachusetts 01701.
ITEM 2. IDENTITY AND BACKGROUND
Item 2 is amended by replacing in its entirety the information
regarding the directors and executive officers of Genzyme that is set forth in
Exhibit 1 to the Schedule 13D and incorporated in such item by reference with
the information set forth in Exhibit 1 to this Amendment No. 5 to Schedule 13D
and incorporated herein by reference.
ITEM 4. PURPOSE OF TRANSACTION.
Item 4 is amended by inserting the following paragraph at the end of
such item:
On December 28, 1998, Genzyme acquired a warrant to purchase up to
288,000 shares of the Issuer's Common Stock in exchange for its guaranty of the
Issuer's obligations under a $24.6 million credit agreement with a commercial
bank. The warrant has an exercise price of $4.875 and expires on December 28,
2008. The warrant became immediately exercisable upon date of issuance for
96,000 shares of Common Stock and shall become exercisable on the first and
second anniversaries of the date of issuance as to such additional number of
shares of Common Stock equal to the product obtained by multiplying: (i) 96,000
by (ii) a fraction, the numerator of which shall be the sum of the amount
outstanding plus the amount available for borrowing but not outstanding on such
anniversary date under the aforementioned credit agreement and the denominator
of which shall be $24,600,000. Notwithstanding the foregoing, all unvested
portions of the warrant shall become exercisable immediately upon payment by
Genzyme to the bank of any amounts due under its guaranty.
<PAGE> 4
Page 4 of 7 pages
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is amended by replacing such item in its entirety with the
following text:
As a result of the transactions described in Item 4, Genzyme
beneficially owns 7,669,365 shares of the Issuer's Common Stock (including an
aggregate of 241,000 shares currently issuable upon exercise of the two warrants
described in Item 4), representing 41.3% of the outstanding shares of Common
Stock of the Issuer based on 18,343,601 shares outstanding as of December 31,
1998. Pursuant to a resolution adopted by Genzyme's Board of Directors on March
6, 1998, each of the President, the Executive Vice President, Finance and the
Executive Vice President and Chief Legal Officer of Genzyme is authorized to
vote all shares of the Issuer's Common Stock owned by Genzyme.
The following table and footnotes set forth certain information
regarding the beneficial ownership of the Issuer's Common Stock by directors and
executive officers of Genzyme as of December 31, 1998:
Shares of Common Stock
Beneficially Owned (1)
---------------------
Beneficial Owner Shares Percent
- ---------------- ------ -------
Henri A. Termeer................... 7,694,865(2) 41.3%
David J. McLachlan................. 7,670,565(3) 41.3
Peter Wirth........................ 7,669,765(4) 41.3
Henry E. Blair..................... 13,000(5) *
Alan E. Smith...................... 12,000(6) *
John M. McPherson.................. 6,000(6) *
Evan M. Lebson..................... 1,200(6) *
Earl M. Collier, Jr................ 1,000(6) *
G. Jan van Heek.................... 900(7) *
- --------------------
* Indicates less than 1%.
(1) Each stockholder has sole voting and investment power with respect to
the shares listed in the table, except that Messrs. Termeer, McLachlan and Wirth
have authority to vote the shares of the Issuer's Common Stock owned by Genzyme.
(2) Includes (i) 16,000 shares subject to stock options currently
exercisable or exercisable within the 60-day period following December 31, 1998
and (ii) 7,669,365 shares owned by Genzyme, as to which Mr. Termeer disclaims
beneficial ownership.
(3) Includes (i) 1,200 shares subject to stock options currently exercisable
or exercisable within the 60-day period following December 31, 1998 and (ii)
7,669,365 shares owned by Genzyme, as to which Mr. McLachlan disclaims
beneficial ownership.
(4) Includes (i) 400 shares subject to stock options currently exercisable
or exercisable within the 60-day period following December 31, 1998 and (ii)
7,669,365 shares owned by Genzyme, as to which Mr. Wirth disclaims beneficial
ownership.
(5) Includes 12,000 shares subject to stock options currently exercisable or
exercisable within the 60-day period following December 31, 1998.
<PAGE> 5
Page 5 of 7 pages
(6) Represents shares subject to stock options currently exercisable or
exercisable within the 60-day period following December 31, 1998.
(7) Includes 400 shares subject to stock options currently exercisable or
exercisable within the 60-day period following December 31, 1998.
Other than the pursuant to the transactions described in Item 4,
neither Genzyme nor any director or executive officer of Genzyme has acquired or
disposed of any shares of Common Stock of the Issuer during the past 60 days.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 is amended by inserting the following text into such item:
Exhibit 1: Directors and Executive Officers of Genzyme.
Exhibit 5: Warrant to purchase Common Stock, dated December 28,
1998.
<PAGE> 6
Page 6 of 7 pages
SIGNATURE
After reasonable inquiry and to the best of its knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
Date: February 23, 1999 GENZYME CORPORATION
By: /s/ David J. McLachlan
---------------------------------
David J. McLachlan
Executive Vice President,
Finance and
Chief Financial Officer
<PAGE> 7
Page 7 of 7 pages
EXHIBIT INDEX
Exhibit 1: Directors and Executive Officers of Genzyme.
Exhibit 5: Warrant to purchase Common Stock, dated December 28, 1998.
<PAGE> 1
EXHIBIT 1
Exhibit 1 is amended by replacing such exhibit in its entirety with the
following text:
Directors of Genzyme
- --------------------
Set forth below is the name, present principal occupation or employment
and the name, principal business and address of any corporation or other
organization in which such employment is conducted of each director of Genzyme.
Unless otherwise indicated, each director is a citizen of the United States.
Henri A. Termeer
Chairman of the Board, President and Chief Executive Officer
Genzyme Corporation
One Kendall Square
Cambridge, Massachusetts 02139
Citizenship: The Netherlands
Constantine E. Anagnostopoulos
Managing General Partner
Gateway Associates (venture capital limited partnership)
800 Maryland Avenue, Suite 1190
St. Louis, MO 63105
Douglas A. Berthiaume
President and Chief Executive Officer
Waters Corporation (high technology manufacturer of products used for
analysis and purification)
34 Maple Street
Milford, Massachusetts 01757
Henry E. Blair
President
Dyax Corp. (bioseparation, pharmaceutical discovery and development
company)
One Kendall Square
Building 600, 5th Floor
Cambridge, Massachusetts 02139
Robert J. Carpenter
President and Chief Executive Officer
VacTex, Inc. (biotechnology company)
70 Walnut Street
Wellesley, Massachusetts 02181
<PAGE> 2
EXHIBIT 1 -- page 2
Charles L. Cooney
Professor of Chemical and Biochemical Engineering
Massachusetts Institute of Technology
25 Ames Street
Building 66-Room 472
Cambridge, Massachusetts 02139
Henry R. Lewis
35 Clover Street
Belmont, Massachusetts 02178
Executive Officers of Genzyme
- -----------------------------
Set forth below is the name and present principal occupation of each of
the executive officers of Genzyme. Unless otherwise indicated, each executive
officer is a citizen of the United States and has as his principal business
address One Kendall Square, Cambridge, Massachusetts 02139.
Henri A. Termeer
Chairman of the Board, President and Chief Executive Officer
Citizenship: The Netherlands
Russell J. Campanello
Senior Vice President, Human Resources
Earl M. Collier, Jr.
Executive Vice President, Health Systems and Surgical Products
Thomas J. DesRosier
Senior Vice President, Chief Patent Counsel
David D. Fleming
Group Senior Vice President, Diagnostic Products and Genetics
John V. Heffernan
Senior Vice President
David J. McLachlan
Executive Vice President, Finance; Chief Financial Officer
Richard A. Moscicki
Senior Vice President, Clinical, Medical and Regulatory Affairs; Chief
Medical Officer
Alan E. Smith
Senior Vice President, Research; Chief Scientific Officer
Citizenship: United Kingdom
G. Jan van Heek
Executive Vice President, Therapeutics Division and Tissue Repair
Citizenship: The Netherlands
<PAGE> 3
EXHIBIT 1 -- page 3
Peter Wirth
Executive Vice President, Corporate Development and Molecular Oncology;
Chief Legal Officer
Michael S. Wyzga
Senior Vice President, Corporate Controller and Chief Accounting
Officer
<PAGE> 1
EXHIBIT 5
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW
AND MAY NOT BE TRANSFERRED EXCEPT (i) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR (ii) UPON FIRST FURNISHING TO THE COMPANY AN OPINION
OF COUNSEL SATISFACTORY TO IT THAT SUCH TRANSFER IS NOT IN VIOLATION OF THE
REGISTRATION REQUIREMENTS OF THE ACT OR ANY STATE SECURITIES LAW.
GENZYME TRANSGENICS CORPORATION
WARRANT TO PURCHASE COMMON STOCK
This certifies that, for value received, Genzyme Corporation
("GENZYME") is entitled to subscribe for and purchase up to 288,000 shares
(subject to adjustment from time to time pursuant to the provisions of Section 5
hereof) of fully paid and nonassessable Common Stock of GENZYME TRANSGENICS
CORPORATION, a Massachusetts corporation (the "COMPANY"), at the Warrant Price
(as defined in Section 2 hereof), subject to the provisions and upon the terms
and conditions hereinafter set forth. The shares of Common Stock issuable upon
exercise or conversion of this Warrant are referred to herein as "WARRANT
SHARES".
As used herein, the term "COMMON STOCK" shall mean the Company's
presently authorized Common Stock, $0.01 par value per share, and any stock into
or for which such Common Stock may hereafter be converted or exchanged.
This Warrant to purchase Common Stock (this "WARRANT") is issued in
consideration for that certain Guaranty, dated as of December 28, 1998, issued
by Genzyme to Fleet National Bank (the "BANK") with respect to the obligations
of the Company under a Credit Agreement of even date herewith between the Bank
and the Company (the "CREDIT AGREEMENT") and a Guaranty of even date herewith
between the Bank and Genzyme (the "GUARANTY").
1. TERM OF WARRANT; VESTING SCHEDULE.
(a) TERM. Subject to the vesting schedule set forth in the
following paragraph, the purchase or conversion right represented by this
Warrant may be exercised, in whole or in part, at any time during the period
beginning on the date hereof (the "ISSUE DATE") and ending on December 28, 2008
(the "EXPIRATION DATE").
(b) VESTING SCHEDULE. This Warrant shall be exercisable at any
time following the Issue Date as to 96,000 shares of Common Stock and shall
become exercisable at any time following each of the first and second
anniversaries of the Issue Date as to such additional number of shares of Common
Stock equal to the product obtained by multiplying: (i) 96,000 by (ii) a
fraction, the numerator of which shall be the sum of the Revolving Credit
Commitment and the Term Loan Commitment (each as defined in the Credit
Agreement) on such anniversary date, and the denominator of which shall be
$24,600,000. Notwithstanding the foregoing, all unvested Warrant Shares shall
become exercisable immediately upon the payment by Genzyme to the Bank of any
amounts due under the Guaranty.
<PAGE> 2
EXHIBIT 5 -- page 2
2. WARRANT PRICE. The initial exercise price of this Warrant is $4.875,
subject to adjustment from time to time pursuant to the provisions of Section 5
hereof (the "WARRANT PRICE").
3. METHOD OF EXERCISE OR CONVERSION; PAYMENT; ISSUANCE OF NEW WARRANT.
(a) EXERCISE. Subject to Section 1 hereof, the purchase right
represented by this Warrant may be exercised by the holder hereof, in whole or
in part, by the surrender of this Warrant (with the notice of exercise form
attached hereto as EXHIBIT 1 duly executed) at the principal office of the
Company and by the payment to the Company, by check or wire transfer, of an
amount equal to the then applicable Warrant Price per share multiplied by the
number of shares then being purchased. The Company agrees that the shares so
purchased shall be deemed to be issued to the holder hereof as the record owner
of such shares as of the close of business on the date on which this Warrant
shall have been surrendered and payment made for such shares as aforesaid. In
the event of any exercise of this Warrant, certificates for the shares of stock
so purchased shall be delivered to the holder hereof within 15 days thereafter
and, unless this Warrant has been fully exercised or expired, a new warrant
representing the portion of the shares, if any, with respect to which this
Warrant shall not then have been exercised shall also be issued to the holder
hereof within such 15-day period.
(b) CONVERSION. Pursuant to the following formula and subject
to Section 1 hereof, the holder has a right to convert its purchase rights under
this Warrant (the "CONVERSION RIGHT"), in whole or in part, into a number of
shares of Common Stock of the Company by surrendering this Warrant (with the
notice of exercise form attached hereto as EXHIBIT 1 duly executed) at the
principal office of the Company, specifying the number of shares of Common Stock
of the Company subject to this Warrant which the holder desires to convert.
X = Y (A - B)
---------
A
where X = the number of shares of Common Stock to be
issued to the holder;
Y = the number of shares of Common Stock
subject to this Warrant for which the
Conversion Right is being exercised;
A = the fair market value of one share of
Common Stock;
B = the Warrant Price
As used herein, the fair market value of a share of Common Stock shall
mean, with respect to each share of Common Stock, the closing price per share of
the Company's Common Stock on the principal national securities exchange on
which the Common Stock is then listed or admitted to trading or, if not then
listed or admitted to trading on any such exchange, on The Nasdaq National
Market, or if not then listed or traded on any such exchange or market, the bid
price per share on the Nasdaq Small-Cap Market or, in the sole discretion of the
Board of Directors of the Company, any other over-the-counter market, including
the OTC Bulletin
2
<PAGE> 3
EXHIBIT 5 -- page 3
Board, which reports bid and asked or last sale prices and volume of sales,
averaged over the ten consecutive trading days prior to the business day on
which notice of exercise duly executed and this Warrant are duly delivered to
the Company. If at any time such quotations are not available, the current fair
market value of a share of Common Stock shall be the highest price per share
which the Company could obtain from a willing buyer (not a current employee or
director) for shares of Common Stock sold by the Company, from authorized but
unissued shares, as determined in good faith by the Board of Directors of the
Company. The Company agrees that the shares so converted shall be deemed to be
issued to the holder hereof as the record owner of such shares as of the close
of business on the date on which this Warrant shall have been surrendered as
aforesaid. In the event of any conversion of this Warrant, certificates for the
shares of stock so converted shall be delivered to the holder hereof within 15
days thereafter and, unless this Warrant has been fully converted or expired, a
new Warrant representing the portion of the shares, if any, with respect to
which this Warrant shall not then have been converted shall also be issued to
the holder hereof within such 15-day period.
4. STOCK FULLY PAID; RESERVATION OF SHARES. All Common Stock which may
be issued upon the exercise or conversion of this Warrant will, upon issuance,
be fully paid and nonassessable, and free from all taxes, liens and charges with
respect to the issue thereof. During the period within which the rights
represented by this Warrant may be exercised, the Company will at all times have
authorized, and reserved for the purpose of the issuance upon exercise or
conversion of the purchase rights evidenced by this Warrant, a sufficient number
of shares of its Common Stock to provide for the complete exercise of the rights
represented by this Warrant.
5. ADJUSTMENTS.
(a) STOCK DIVIDENDS AND STOCK SPLITS. If, at any time after
the date hereof and before the Expiration Date, (i) the Company shall fix a
record date for the issuance of any stock dividend payable in shares of Common
Stock or (ii) the number of shares of Common Stock outstanding shall have been
increased by a subdivision or split-up of shares of Common Stock, then, on the
record date fixed for the determination of holders of Common Stock entitled to
receive such dividend or immediately after the effective date of such
subdivision or split-up, as the case may be, the number of shares of Common
Stock to be delivered upon exercise of this Warrant will be appropriately
increased so that the holder thereafter will be entitled to receive the number
of shares of Common Stock that the holder would have owned immediately following
such action had this Warrant been fully exercised (without regard to vesting
dates) immediately prior thereto, and the Warrant Price will be appropriately
adjusted.
(b) COMBINATION OF STOCK. If, at any time after the date
hereof and before the Expiration Date, the number of shares of Common Stock
outstanding shall have been decreased by a reverse stock split or other
combination of the outstanding shares of Common Stock, then, immediately after
the effective date of such combination, the number of shares of Common Stock to
be delivered upon exercise of this Warrant will be appropriately decreased so
that the holder thereafter will be entitled to receive the number of shares of
Common Stock that the holder would have owned immediately following such action
had such Warrant been fully
3
<PAGE> 4
EXHIBIT 5 -- page 4
exercised (without regard to vesting dates) immediately prior thereto, and the
Warrant Price will be appropriately adjusted.
(c) REORGANIZATION, ETC. If any capital reorganization of the
Company, or any reclassification of the Common Stock, or any consolidation of
the Company with or merger of the Company with or into any other person or any
sale, lease or other transfer of all or substantially all of the assets of the
Company to any other person (including any individual, partnership, joint
venture, corporation, trust or group thereof) shall be effected in such a way
that, following consummation of such transaction, the holders of Common Stock
shall be entitled to receive stock, securities or assets with respect to or in
exchange for Common Stock, then, upon exercise or conversion of this Warrant in
accordance with Section 3 hereof, the holder shall have the right to receive the
kind and amount of stock, securities or assets receivable upon such
reorganization, reclassification, consolidation, merger or sale, lease or other
transfer by a holder of the number of shares of Common Stock that the holder
would have been entitled to receive upon exercise or conversion of this Warrant
pursuant to Section 3 hereof had such Warrant been exercised immediately before
such reorganization, reclassification, consolidation, merger or sale, lease or
other transfer, subject to adjustments that shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 5.
(d) RIGHTS OFFERING. If the Company, at any time after the
date hereof and before the Expiration Date, shall issue or sell or fix a record
date for the issuance of rights, options, warrants or convertible or
exchangeable securities to all holders of Common Stock entitling them to
subscribe for or purchase Common Stock (or securities convertible into Common
Stock) at a price per share (or having a conversion price per share) that,
together with the value of any consideration paid for any such rights, options,
warrants or convertible or exchangeable securities (as determined in good faith
by the Board of Directors of the Company) is less than the fair market value of
a share of Common Stock as of the date of such issuance or sale or on such
record date: then, immediately after the date of such issuance or sale or on
such record date, the holder shall have the right to receive, upon the same
terms as the holders of Common Stock, the kind and amount of rights, options,
warrants or convertible or exchangeable securities receivable in such offering
by a holder of the number of shares of Common Stock that the holder would have
been entitled to receive upon exercise of this Warrant pursuant to Section 1
hereof had such Warrant been exercised immediately (without regard to vesting
dates) before such issuance or the record date for such instance.
(e) SPECIAL DIVIDEND. If (other than in dissolution or
liquidation) securities of the Company (other than shares of Common Stock or
securities issued pursuant to a shareholder rights or similar plan) or assets
(other than cash dividends) are issued by way of a dividend on outstanding
shares of Common Stock, then the Warrant Price shall be adjusted so that it
shall equal the price determined by multiplying the Warrant Price in effect
immediately prior to the close of business on the record date for the
determination of the stockholders entitled to receive such dividend by a
fraction, the numerator of which shall be the last sale price of the Common
Stock on such record date less the then fair market value as determined by the
Board of Directors of the Company, whose determination shall be conclusive, of
the portion of the securities or assets distributed applicable to one share of
Common Stock, and the denominator of which shall
4
<PAGE> 5
EXHIBIT 5 -- page 5
be such last sale price. Such adjustment shall become effective immediately
prior to the opening of business on the day following such record date.
(f) LIMITATIONS. Anything in this Section 5 to the contrary
notwithstanding, no adjustment in the Warrant Price in accordance with the
provisions of 5(a), 5(b), 5(c), 5(d) or 5(e), hereof need be made if such
adjustment would amount to a change in such Warrant Price of less than $0.01;
provided, however, that the amount by which any adjustment is not made by reason
of the provisions of this Section 5(f) shall be carried forward and taken into
account at the time of any subsequent adjustment in the Warrant Price.
(g) READJUSTMENTS. If an adjustment is made under Sections
5(a), 5(b), 5(c), 5(d) or 5(e), and the event to which the adjustment relates
does not occur, then any adjustments in the Warrant Price or the number of
Warrant Shares that were made in accordance with such sections shall be adjusted
back to the Warrant Price and the number of Warrant Shares that were in effect
immediately prior to the date of or record date for such event.
(h) NOTICE OF ADJUSTMENT UNDER THIS WARRANT. Upon any
adjustment of the Warrant Price or the number of Warrant Shares, then, and in
each such case, the Company shall give written notice thereof, in the form of an
officer's certificate, to the holder hereof which notice shall state the Warrant
Price resulting from such adjustment and the increase or decrease, if any, in
the number of Warrant Shares at such price upon the exercise of this Warrant,
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based. However, failure to give such notice, or any
defect therein, shall not affect the legality or validity of the subject
adjustments.
(i) CERTIFICATE OF INDEPENDENT PUBLIC ACCOUNTANTS. The Company
may retain a firm of independent public accountants of recognized standing (who
may be any such firm regularly employed by the Company) to make any computation
required under this Section 5, and a certificate signed by such firm shall be
conclusive evidence of the correctness of the computation made under this
Section 5.
6. FRACTIONAL SHARES. No fractional shares of Common Stock will be
issued in connection with any exercise hereunder, but in lieu of such fractional
shares the Company shall make a cash payment therefor upon the basis of the fair
market value of a share of Common Stock as of the date of exercise.
7. COMPLIANCE WITH THE ACT; REGISTRATION RIGHTS.
(a) COMPLIANCE WITH THE ACT. The holder of this Warrant, by
acceptance hereof, agrees that this Warrant and the shares of Common Stock to be
issued upon exercise hereof are being acquired for investment for such holder's
own account and not with a view toward distribution hereof or thereof, and that
it will not offer, sell or otherwise dispose of this Warrant or any shares of
Common Stock to be issued upon exercise hereof unless this Warrant has been
registered under the Act and applicable state securities laws or (i) such
registration is not required and (ii) an opinion of counsel satisfactory to the
Company is furnished to the Company to that effect.
5
<PAGE> 6
EXHIBIT 5 -- page 6
(b) REGISTRATION RIGHTS. The holder shall be entitled, with
respect to the shares of Common Stock issuable upon the exercise or conversion
hereof, to the same registration rights as are applicable to the shares of
Common Stock already held by Genzyme, which registration rights are set forth in
Section 8 of the Series A Convertible Preferred Stock Purchase Agreement dated
May 1, 1993 between the Company and Genzyme.
8. TRANSFER AND EXCHANGE OF WARRANT.
(a) TRANSFER. This Warrant may be transferred or succeeded to
by any person; provided, however, that the Company is given written notice by
such transferee at the time of such transfer, stating the name and address of
the transferee and identifying the securities with respect to which the rights
hereunder are being assigned.
(b) EXCHANGE. Subject to compliance with the terms hereof,
this Warrant and all rights hereunder are transferable, in whole or in part, at
the office of the Company by the holder hereof, in person or by duly authorized
attorney, upon surrender of this Warrant properly endorsed. Each taker and
holder of this Warrant, by taking or holding the same, consents and agrees that
this Warrant, when endorsed in blank, shall be deemed negotiable; provided that
the last holder of this Warrant as registered on the books of the Company may be
treated by the Company and all persons dealing with this Warrant as the absolute
owner hereof for any purposes and as the person entitled to exercise the rights
represented by this Warrant or to transfer hereof on the books of the Company,
any notice to the contrary notwithstanding, unless and until such holder seeks
to transfer registered ownership of this Warrant on the books of the Company and
such transfer is effected.
9. MISCELLANEOUS.
(a) NO RIGHTS AS SHAREHOLDER. No holder of this Warrant, as
such, shall be entitled to vote or receive dividends or be deemed the holder of
Common Stock or any other securities of the Company which may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon the holder of this Warrant, as such, any of
the rights of a shareholder of the Company or any right to vote for the election
of directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action (whether upon
any recapitalization, issuance of stock, reclassification of stock, change of
par value or change of stock to no par value, consolidation, merger, conveyance
or otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until this Warrant shall have been exercised or
converted and the shares purchasable upon the exercise or conversion hereof
shall have become deliverable, as provided herein.
(b) REPLACEMENT. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Warrant and, in the case of loss, theft or destruction, on delivery of an
indemnity agreement, or bond reasonably satisfactory in form and amount to the
Company or, in the case of mutilation, on surrender and cancellation of this
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EXHIBIT 5 -- page 7
Warrant, the Company, at its expense, will execute and deliver, in lieu of this
Warrant, a new warrant of like tenor.
(c) NOTICE. Any notice given to either party under this
Warrant shall be in writing, and any notice hereunder shall be deemed to have
been given upon the earlier of (i) delivery thereof by hand delivery, by
courier, or by standard form of telecommunication, and (ii) three (3) business
days after the mailing thereof if sent registered mail with postage prepaid,
addressed to the Company at its principal executive offices and to the holder at
its address set forth in the Company's books and records or at such other
address as the holder may have provided to the Company in writing.
(d) NO IMPAIRMENT. The Company will not, by amendment of its
Restated Articles of Organization of through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the Company, but will
at all times in good faith assist in the carrying out of all the provisions in
the Warrant.
(e) GOVERNING LAW. This Warrant shall be governed by and
construed under the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, this Warrant is executed as of this 28th day of
December, 1998.
GENZYME TRANSGENICS CORPORATION
By: /s/ John B. Green
---------------------------------
Name: John B. Green
Title: Vice President and CFO
7
<PAGE> 8
EXHIBIT 5 -- page 8
EXHIBIT 1
NOTICE OF EXERCISE
TO: GENZYME TRANSGENICS CORPORATION
1. Check Box that Applies:
[ ] The undersigned hereby elects to purchase ______ shares of Common
Stock of GENZYME TRANSGENICS CORPORATION pursuant to the terms of the attached
Warrant, and tenders herewith cash payment of the purchase price of such shares
in full.
[ ] The undersigned hereby elects to convert ______ shares subject to
the attached Warrant into shares of Common Stock of GENZYME TRANSGENICS
CORPORATION pursuant to the terms of the attached Warrant.
2. Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned or in such other name as is
specified below:
_________________________________________
(Name)
_________________________________________
_________________________________________
(Address)
___________________________________
Signature
8
