<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 27, 1996
REGISTRATION NO. 333-10845
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
TRANSKARYOTIC THERAPIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 2836 04-3027191
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
195 ALBANY STREET
CAMBRIDGE, MASSACHUSETTS 02139
(617) 349-0200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
RICHARD F SELDEN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
TRANSKARYOTIC THERAPIES, INC.
195 ALBANY STREET
CAMBRIDGE, MASSACHUSETTS 02139
(617) 349-0200
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------
COPIES TO:
<TABLE>
<S> <C>
PETER WIRTH, ESQ. BRUCE K. DALLAS, ESQ.
PALMER & DODGE LLP DAVIS POLK & WARDWELL
One Beacon Street 450 Lexington Avenue
Boston, Massachusetts 02108 New York, New York 10017
(617) 573-0100 (212) 450-4000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. / /
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
EXPLANATORY NOTE
This Amendment No. 1 to the Form S-1 Registration Statement is a Part II
filing solely to file one exhibit and make related technical changes.
Accordingly, a preliminary prospectus has been omitted.
<PAGE> 3
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following exhibits are filed herewith:
<TABLE>
<S> <C> <C>
1.1 -- Form of Underwriting Agreement.
3.1* -- Amended and Restated Certificate of Incorporation of the Registrant.
3.2* -- Form of Amended and Restated Certificate of Incorporation of the Registrant.
3.3* -- By-Laws of the Registrant.
3.4* -- Form of Amended and Restated By-Laws of the Registrant.
4.1** -- Specimen certificate for shares of Common Stock of the Registrant.
5.1* -- Opinion of Palmer & Dodge LLP as to legality of the shares being registered.
9.1* -- Amended and Restated Voting Rights Agreement, dated November 3, 1993 and
amended on May 18, 1994, March 1, 1995, October 26, 1995, July 10, 1996 and
August 7, 1996, by and among the Registrant and certain holders of the
Registrant's Preferred Stock named therein.
10.1* -- Stock Purchase Agreement, dated July 1988, by and between Warburg, Pincus
Capital Company, L.P. ("Warburg") and the Registrant.
10.2* -- Stockholders' Agreement, dated September 16, 1988, by and among Warburg,
certain individual investors and the Registrant.
10.3* -- Class B Preferred Stock Purchase Agreement, dated February 14, 1992 and
amended on April 20, 1993, by and among certain Purchasers and the Registrant.
10.4* -- Class B Preferred Stock Purchase Agreement, dated April 20, 1993, by and among
certain Purchasers and the Registrant.
10.5* -- Class C Preferred Stock and Warrant Purchase Agreement, dated November 3,
1993, by and among the Registrant and certain Purchasers named therein.
10.6* -- Class D Preferred Stock Purchase Agreement, dated May 18, 1994, by and among
the Registrant and certain Purchasers named therein.
10.7* -- Class E Preferred Stock Purchase Agreement, dated March 1, 1995, by and among
the Registrant and certain Purchasers named therein.
10.8* -- Class F Preferred Stock Purchase Agreement, dated October 26, 1995, by and
among the Registrant and certain Purchasers named therein.
10.9* -- Class G Preferred Stock Purchase Agreement, dated July 10, 1996, by and among
the Registrant and certain Purchasers named therein.
10.10* -- Supplemental Class G Preferred Stock Purchase Agreement, dated August 7, 1996,
by and among the Registrant and certain Purchasers named therein.
10.11* -- Amended and Restated Registration Rights Agreement, dated November 3, 1993 and
amended on May 13, 1994, March 1, 1995, October 26, 1995, July 10, 1996 and
August 7, 1996, by and among the Registrant and certain holders of the
Registrant's Preferred Stock named therein.
10.12* -- Lease Agreement, dated January 1, 1994, by and between the Trust under the
Will of Harry F. Stimpson for office space at 195 Albany Street, Cambridge,
Massachusetts.
10.13* -- Sublease Agreement, dated April 7, 1992, by and between the Massachusetts
Institute of Technology and the Registrant, for office space located at 185
Albany Street, Cambridge, Massachusetts.
10.14* -- 1993 Non-Employee Directors' Stock Option Plan.
10.15* -- 1993 Long-Term Incentive Plan.
10.16* -- Form of Letter Agreement re: Confidentiality, Inventions and Non-Disclosure.
10.17* -- Form of Letter Agreement re: Restricted Stock.
10.18* -- Form of Scientific Advisor Agreement.
</TABLE>
II-1
<PAGE> 4
<TABLE>
<S> <C> <C>
10.19* -- Amended and Restated Promissory Note, dated June 16, 1993, issued by the
Registrant to Dr. Richard F Selden, in the original principal amount of
$125,000.
10.20* -- Amended and Restated Promissory Note, dated June 16, 1993, issued by the
Registrant to Dr. Douglas A. Treco, in the original principal amount of
$60,000.
10.21* -- Amended and Restated Promissory Note, dated April 21, 1995, issued by the
Registrant to Dr. Christoph M. Adams, in the original principal amount of
$15,000.
10.22* -- Amended and Restated Promissory Note, dated May 5, 1995, issued by the
Registrant to Dr. Christoph M. Adams, in the original principal amount of
$20,000.
10.23* -- Employment Agreement, dated July 19, 1991, by and between Dr. Richard F Selden
and the Registrant.
10.24* -- Pledge Agreement, dated May 14, 1991, by and between Dr. Richard F Selden and
the Registrant.
10.25* -- Employment Agreement, dated July 26, 1991, by and between Dr. Douglas A. Treco
and the Registrant.
10.26* -- Pledge Agreement, dated August 15, 1991, by and between Dr. Douglas A. Treco
and the Registrant.
10.27* -- Employment Agreement, dated November 20, 1993, by and between Dr. Christoph M.
Adams and the Registrant.
10.28* -- Pledge Agreement, dated April 21, 1995, by and between Dr. Christoph M. Adams
and the Registrant.
10.29* -- Agreement, dated September 1, 1991, by and between Mr. William R. Miller and
the Registrant.
10.30* -- Agreement, dated July 30, 1993, by and between Warburg and the Registrant.
10.31* -- Common Stock Purchase Warrant, dated September 12, 1991.
10.32**+ -- Collaboration and License Agreement, dated July 22, 1993 and amended on May
30, 1996, by and between Genetics Institute, Inc. and the Registrant.
10.33**+ -- Amended and Restated License Agreement, dated March 1, 1995, by and between
Hoechst Marion Roussel, Inc. ("HMRI") and the Registrant.
10.34**+ -- License Agreement, dated March 1, 1995, by and between HMRI and the
Registrant.
11.1* -- Statement re: computation of earnings (loss) per share -- pro forma.
23.1* -- Consent of Palmer & Dodge LLP (included in Exhibit 5.1).
23.2* -- Consent of Hamilton, Brook, Smith & Reynolds, P.C.
23.3* -- Consent of Ernst & Young LLP.
24.1* -- Power of Attorney (included on the signature pages to this Registration
Statement)
27* -- Financial Data Schedule
</TABLE>
- ---------------
* Previously filed.
** To be filed by amendment.
+ Certain confidential material contained in the document has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
406 of the Securities Act of 1933, as amended.
(b) Financial Statement Schedules
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
II-2
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Cambridge,
Commonwealth of Massachusetts, on August 27, 1996.
TRANSKARYOTIC THERAPIES, INC.
By: /s/ ANTHONY R. HALL
------------------------------------
Anthony R. Hall
Vice President, Finance
and Administration; Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------------------------------------------- ------------------------------- ----------------
<C> <S> <C>
RICHARD F SELDEN* President, Chief Executive August 27, 1996
- --------------------------------------------- Officer, Treasurer and Director
Richard F Selden (principal executive officer)
/s/ ANTHONY R. HALL Vice President, Finance and August 27, 1996
- --------------------------------------------- Administration; Chief Financial
Anthony R. Hall Officer (principal financial
and accounting officer)
WILLIAM R. MILLER* Director August 27, 1996
- ---------------------------------------------
William R. Miller
RODMAN W. MOORHEAD, III* Director August 27, 1996
- ---------------------------------------------
Rodman W. Moorhead, III
JAMES E. THOMAS* Director August 27, 1996
- ---------------------------------------------
James E. Thomas
*By: /s/ ANTHONY R. HALL
- ---------------------------------------------
Anthony R. Hall
Attorney-in-fact
</TABLE>
II-3
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
PAGE
------------
<S> <C> <C> <C>
1.1 -- Form of Underwriting Agreement. .......................................
3.1* -- Amended and Restated Certificate of Incorporation of the
Registrant. ...........................................................
3.2* -- Form of Amended and Restated Certificate of Incorporation of the
Registrant. ...........................................................
3.3* -- By-Laws of the Registrant. ............................................
3.4* -- Form of Amended and Restated By-Laws of the Registrant. ...............
4.1** -- Specimen certificate for shares of Common Stock of the Registrant. ....
5.1* -- Opinion of Palmer & Dodge LLP as to legality of the shares being
registered. ...........................................................
9.1* -- Amended and Restated Voting Rights Agreement, dated November 3, 1993
and amended on May 18, 1994, March 1, 1995, October 26, 1995, July 10,
1996 and August 7, 1996, by and among the Registrant and certain
holders of the Registrant's Preferred Stock named therein. ............
10.1* -- Stock Purchase Agreement, dated July 1988, by and between Warburg,
Pincus Capital Company, L.P. ("Warburg") and the Registrant. ..........
10.2* -- Stockholders' Agreement, dated September 16, 1988, by and among
Warburg, certain individual investors and the Registrant. .............
10.3* -- Class B Preferred Stock Purchase Agreement, dated February 14, 1992 and
amended on April 20, 1993, by and among certain Purchasers and the
Registrant. ...........................................................
10.4* -- Class B Preferred Stock Purchase Agreement, dated April 20, 1993, by
and among certain Purchasers and the Registrant. ......................
10.5* -- Class C Preferred Stock and Warrant Purchase Agreement, dated November
3, 1993, by and among the Registrant and certain Purchasers named
therein. ..............................................................
10.6* -- Class D Preferred Stock Purchase Agreement, dated May 18, 1994, by and
among the Registrant and certain Purchasers named therein. ............
10.7* -- Class E Preferred Stock Purchase Agreement, dated March 1, 1995, by and
among the Registrant and certain Purchasers named therein. ............
10.8* -- Class F Preferred Stock Purchase Agreement, dated October 26, 1995, by
and among the Registrant and certain Purchasers named therein. ........
10.9* -- Class G Preferred Stock Purchase Agreement, dated July 10, 1996, by and
among the Registrant and certain Purchasers named therein. ............
10.10* -- Supplemental Class G Preferred Stock Purchase Agreement, dated August
7, 1996, by and among the Registrant and certain Purchasers named
therein. ..............................................................
10.11* -- Amended and Restated Registration Rights Agreement, dated November 3,
1993 and amended on May 13, 1994, March 1, 1995, October 26, 1995, July
10, 1996 and August 7, 1996, by and among the Registrant and certain
holders of the Registrant's Preferred Stock named therein. ............
10.12* -- Lease Agreement, dated January 1, 1994, by and between the Trust under
the Will of Harry F. Stimpson for office space at 195 Albany Street,
Cambridge, Massachusetts. .............................................
10.13* -- Sublease Agreement, dated April 7, 1992, by and between the
Massachusetts Institute of Technology and the Registrant, for office
space located at 185 Albany Street, Cambridge, Massachusetts. .........
10.14* -- 1993 Non-Employee Directors' Stock Option Plan. .......................
10.15* -- 1993 Long-Term Incentive Plan. ........................................
10.16* -- Form of Letter Agreement re: Confidentiality, Inventions and
Non-Disclosure. .......................................................
10.17* -- Form of Letter Agreement re: Restricted Stock. ........................
10.18* -- Form of Scientific Advisor Agreement. .................................
10.19* -- Amended and Restated Promissory Note, dated June 16, 1993, issued by
the Registrant to Dr. Richard F Selden, in the original principal
amount of $125,000. ...................................................
</TABLE>
<PAGE> 7
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
PAGE
------------
<S> <C> <C> <C>
10.20* -- Amended and Restated Promissory Note, dated June 16, 1993, issued by
the Registrant to Dr. Douglas A. Treco, in the original principal
amount of $60,000. ....................................................
10.21* -- Amended and Restated Promissory Note, dated April 21, 1995, issued by
the Registrant to Dr. Christoph M. Adams, in the original principal
amount of $15,000. ....................................................
10.22* -- Amended and Restated Promissory Note, dated May 5, 1995, issued by the
Registrant to Dr. Christoph M. Adams, in the original principal amount
of $20,000. ...........................................................
10.23* -- Employment Agreement, dated July 19, 1991, by and between Dr. Richard F
Selden and the Registrant. ............................................
10.24* -- Pledge Agreement, dated May 14, 1991, by and between Dr. Richard F
Selden and the Registrant. ............................................
10.25* -- Employment Agreement, dated July 26, 1991, by and between Dr. Douglas
A. Treco and the Registrant. ..........................................
10.26* -- Pledge Agreement, dated August 15, 1991, by and between Dr. Douglas A.
Treco and the Registrant. .............................................
10.27* -- Employment Agreement, dated November 20, 1993, by and between Dr.
Christoph M. Adams and the Registrant. ................................
10.28* -- Pledge Agreement, dated April 21, 1995, by and between Dr. Christoph M.
Adams and the Registrant. .............................................
10.29* -- Agreement, dated September 1, 1991, by and between Mr. William R.
Miller and the Registrant. ............................................
10.30* -- Agreement, dated July 30, 1993, by and between Warburg and the
Registrant. ...........................................................
10.31* -- Common Stock Purchase Warrant, dated September 12, 1991. ..............
10.32**+ -- Collaboration and License Agreement, dated July 22, 1993 and amended on
May 30, 1996, by and between Genetics Institute, Inc. and the
Registrant. ...........................................................
10.33**+ -- Amended and Restated License Agreement, dated March 1, 1995, by and
between Hoechst Marion Roussel, Inc. ("HMRI") and the Registrant. .....
10.34**+ -- License Agreement, dated March 1, 1995, by and between HMRI and the
Registrant. ...........................................................
11.1* -- Statement re: computation of earnings (loss) per share -- pro
forma. ................................................................
23.1* -- Consent of Palmer & Dodge LLP (included in Exhibit 5.1). ..............
23.2* -- Consent of Hamilton, Brook, Smith & Reynolds, P.C. ....................
23.3* -- Consent of Ernst & Young LLP. .........................................
24.1* -- Power of Attorney (included on the signature pages to this Registration
Statement).............................................................
27* -- Financial Data Schedule................................................
</TABLE>
- ---------------
* Previously filed
** To be filed by amendment.
+ Certain confidential material contained in the document has been omitted and
filed separately with the Securities and Exchange Commission pursuant to Rule
406 of the Securities Act of 1933, as amended.
<PAGE> 1
[FORM OF UNDERWRITING AGREEMENT]
_______________ Shares
TRANSKARYOTIC THERAPIES, INC.
COMMON STOCK
(par value $.01 per share)
UNDERWRITING AGREEMENT
__________, 1996
<PAGE> 2
_____________, 1996
Morgan Stanley & Co.
Incorporated
UBS Securities LLC
Pacific Growth Equities, Inc.
c/o Morgan Stanley & Co.
Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Mesdames:
Transkaryotic Therapies, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several Underwriters named in
Schedule I hereto (the "Underwriters") _______________ shares of its Common
Stock, par value $.01 per share (the "Firm Shares"). The Company also proposes
to issue and sell to the several Underwriters not more than an additional
______________ shares of its Common Stock, par value $.01 per share (the
"Additional Shares"), if and to the extent that you, as Managers of the
offering, shall have determined to exercise, on behalf of the Underwriters, the
right to purchase such shares of common stock granted to the Underwriters in
Section 2 hereof. The Firm Shares and the Additional Shares are hereinafter
collectively referred to as the "Shares." The shares of Common Stock, par value
$.01 per Share, of the Company to be outstanding after giving effect to the
sales contemplated hereby are hereinafter referred to as the "Common Stock."
The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement, including a prospectus,
relating to the Shares. The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the prospectus in the form first
used to confirm sales of Shares is hereinafter referred to as the "Prospectus."
If the Company has filed an abbreviated registration statement to register
additional shares of Common Stock pursuant to Rule 462(b) under the Securities
Act (the "Rule 462 Registration
<PAGE> 3
Statement"), then any reference herein to the term "Registration Statement"
shall be deemed to include such Rule 462 Registration Statement.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to and agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in
effect, and no proceedings for such purpose are pending before or
threatened by the Commission.
(b) (i) The Registration Statement, when it became effective,
did not contain and, as amended or supplemented, if applicable, 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 not misleading, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable,
will comply in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder and (iii)
the Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in
this paragraph 1(b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
relating to any Underwriter furnished to the Company in writing by such
Underwriter through you expressly for use therein.
(c) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
2
<PAGE> 4
(d) Each subsidiary of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact business and is in
good standing in each jurisdiction in which the conduct of its business
or its ownership or leasing of property requires such qualification,
except to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed and
delivered by the Company.
(f) The authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable.
(h) The Shares have been duly authorized and, when issued and
delivered in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such
Shares will not be subject to any preemptive or similar rights.
(i) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company or any agreement or other
instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Company of its obligations under this Agreement, except such as may be
required by the securities or Blue Sky laws of the various states in
connection with the offer and sale of the Shares.
3
<PAGE> 5
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party
or to which any of the properties of the Company or any of its
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required.
(l) The Company is not aware of any existing or imminent
material labor disputes with the employees of the Company or any of is
subsidiaries; and the Company is not aware of any existing, threatened
or imminent labor disturbance by the employees of any of its principal
suppliers, manufacturers or contractors that could result in any
material adverse change in the condition, financial or otherwise, or in
the earnings, business or operations of the Company and its
subsidiaries, taken as a whole.
(m) The Company owns or possesses, or believes it can acquire
on reasonable terms, all material patents (or foreign equivalents),
trademarks, copyrights and proprietary, confidential information or
licenses to any of the foregoing currently required by it in connection
with its business except such as the failure to so own, possess or
acquire would not have a material adverse affect on the Company. In
connection with the filing of its patent applications, when it deemed
necessary, the Company conducted reasonable investigations of the
published literature and patent references relating to the inventions
claimed in such applications. There are no enforceable United States or
foreign patents known to the Company on the basis of a reasonable
monitoring of patents issued in the United States which the Company
believes to be infringed by its present activities or which would
preclude the pursuit of its business as described in the Prospectus.
4
<PAGE> 6
The Company has not received any notice of infringement of or conflict
with asserted rights of any third party with respect to any of the
foregoing.
(n) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
(o) The Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
(p) The Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses and (iii) are
in compliance with all terms and conditions of any such permit, license
or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits,
licenses or approvals would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as a
whole.
(q) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the
condition, financial or otherwise, or the earnings,
5
<PAGE> 7
business or operations of the Company and its subsidiaries, taken as a
whole, except as described in or contemplated by the Prospectus.
(r) In the ordinary course of its business, the Company
conducts a periodic review of the effect of Environmental Laws on the
business, operations and properties of the Company and its
subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any permit, license
or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review,
the Company has reasonably concluded that such associated costs and
liabilities would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(s) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (3) access to assets is permitted only
in accordance with management's general or specific authorization; and
(4) the recorded accountability for assets is compared with the
existing assets at reasonable intervals and appropriate action is taken
with respect to any differences.
(t) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to
require the Company to include such securities with the Shares
registered pursuant to the Registration Statement.
(u) The Company has complied with all provisions of Section
517.075, Florida Statutes relating to doing business with the
Government of Cuba or with any person or affiliate located in Cuba.
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<PAGE> 8
2. AGREEMENTS TO SELL AND PURCHASE. The Company hereby agrees
to sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedule I hereto
opposite its name at $______ a share (the "Purchase Price").
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 Shares, and the Underwriters shall
have a one-time right to purchase, severally and not jointly, up to
_______________ Additional Shares at the Purchase Price. If you, on behalf of
the Underwriters, elect to exercise such option, you shall so notify the Company
in writing not later than 30 days after the date of this Agreement, which notice
shall specify the number of Additional Shares to be purchased by the
Underwriters and the date on which such shares are to be purchased. Such date
may be the same as the Closing Date (as defined below) but not earlier than the
Closing Date nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 4 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. If any Additional Shares are to be purchased, each Underwriter
agrees, severally and not jointly, to purchase the number of Additional Shares
(subject to such adjustments to eliminate fractional shares as you may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of Firm Shares set forth in Schedule I
hereto opposite the name of such Underwriter bears to the total number of Firm
Shares.
The Company hereby agrees that, without the prior written
consent of Morgan Stanley & Co. Incorporated on behalf of the Underwriters, it
will not, during the period ending 180 days after the date of the Prospectus,
(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 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 or (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, whether any such transaction described in
clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other
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<PAGE> 9
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)
the Shares to be sold hereunder or (B) the issuance by the Company of shares of
Common Stock upon the exercise of an option or warrant or the conversion of a
security outstanding on the date hereof of which the Underwriters have been
advised in writing or (c) the issuance by the Company of any option to purchase
any shares of Common Stock pursuant to its 1993 Long-Term Incentive Plan or its
1993 Non-Employee Directors' Stock Option Plan as in effect on the date hereof.
3. TERMS OF PUBLIC OFFERING. The Company is advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company is
further advised by you that the Shares are to be offered to the public initially
at $_____________ a share (the "Public Offering Price") and to certain dealers
selected by you at a price that represents a concession not in excess of $______
a share under the Public Offering Price, and that any Underwriter may allow, and
such dealers may reallow, a concession, not in excess of $_____ a share, to any
Underwriter or to certain other dealers.
4. PAYMENT AND DELIVERY. Payment for the Firm Shares shall be
made to the Company in Federal or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of the
several Underwriters at 10:00 A.M., New York City time, on ____________, 1996,
or at such other time on the same or such other date, not later than _________,
1996, as shall be designated in writing by you. The time and date of such
payment are hereinafter referred to as the "Closing Date."
Payment for any Additional Shares shall be made to the Company
in Federal or other funds immediately available in New York City against
delivery of such Additional Shares for the respective accounts of the several
Underwriters at 10:00 A.M., New York City time, on the date specified in the
notice described in Section 2 or at such other time on the same or on such other
date, in any event not later than _______, 1996, as shall be designated in
writing by you. The time and date of such payment are hereinafter referred to as
the "Option Closing Date."
Certificates for the Firm Shares and Additional Shares shall
be in definitive form and registered in such names and in such denominations as
you 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.
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<PAGE> 10
The certificates evidencing the Firm Shares and Additional Shares shall be
delivered to you on the Closing Date or the Option Closing Date, as the case may
be, for the respective accounts of the several Underwriters, with any transfer
taxes payable in connection with the transfer of the Shares to the Underwriters
duly paid, against payment of the Purchase Price therefor.
5. CONDITIONS TO THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Company to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares on
the Closing Date are subject to the condition that the Registration Statement
shall have become effective not later than 4:30 p.m. (New York City time) on the
date hereof.
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement
and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does
not indicate the direction of the possible change, in the
rating accorded any of the Company's securities by any
"nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the
Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of
this Agreement) that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated
in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer
of the Company, to the effect set forth in clause (a)(i) above and to
the effect that the representations and warranties of the
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<PAGE> 11
Company contained in this Agreement are true and correct as of the
Closing Date and that the Company has complied with all of the
agreements and satisfied all of the conditions on its part to be
performed or satisfied hereunder on or before the Closing Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date
an opinion of Palmer & Dodge LLP, outside counsel for the Company,
dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has the corporate power
and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(ii) each subsidiary of the Company has been duly
incorporated, is validly existing as a corporation in good
standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own
its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a
material adverse effect on the Company and its subsidiaries,
taken as a whole;
(iii) the authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in
the Prospectus;
(iv) the shares of Common Stock outstanding prior to the
issuance of the Shares have been duly
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<PAGE> 12
authorized and are validly issued, fully paid and
non-assessable;
(v) the Shares have been duly authorized and, when issued
and delivered in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable, and the
issuance of such Shares will not be subject to any preemptive
or similar rights;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) the execution and delivery by the Company of, and
the performance by the Company of its obligations under, this
Agreement will not contravene any provision of applicable law
or the certificate of incorporation or by-laws of the Company
or, to the best of such counsel's knowledge, any agreement or
other instrument binding upon the Company or any of its
subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or, to the best of such
counsel's knowledge, any judgment, order or decree of any
governmental body, agency or court having jurisdiction over
the Company or any subsidiary, and no consent, approval,
authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company of its obligations under this Agreement, except
such as may be required by the securities or Blue Sky laws of
the various states in connection with the offer and sale of
the Shares;
(viii) the statements (A) in the Prospectus under the
captions "Business -- Legal Proceedings," "Management,"
"Description of Capital Stock," "Shares Eligible for Future
Sale" and "Underwriters" and (B) in the Registration Statement
in Items 14 and 15, in each case 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 and proceedings and fairly summarize the matters
referred to therein;
(ix) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to
which the Company or any
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<PAGE> 13
of its subsidiaries is a party or to which any of the
properties of the Company or any of its subsidiaries is
subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration
Statement that are not described or filed as required;
(x) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the
proceeds thereof as described in the Prospectus, will not be
an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended;
(xi) the Company and its subsidiaries (A) are in
compliance with any and all applicable Environmental Laws, (B)
have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to
conduct their respective businesses and (C) are in compliance
with all terms and conditions of any such permit, license or
approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals would not, singly or in
the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole; and
(xii) such counsel (A) is of the opinion that the
Registration Statement and Prospectus (except for financial
statements and schedules and other financial and statistical
data included therein as to which such counsel need not
express any opinion) comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (B) has no reason to
believe that (except for financial statements and schedules
and other financial and statistical data as to which such
counsel need not express any belief) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective contained any untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to
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<PAGE> 14
make the statements therein not misleading and (C) has no
reason to believe that (except for financial statements and
schedules and other financial and statistical data as to which
such counsel need not express any belief) the Prospectus
contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(d) The Underwriters shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, counsel for the Underwriters,
dated the Closing Date, covering the matters referred to in
subparagraphs (v), (vi), (viii) (but only as to the statements in the
Prospectus under "Description of Capital Stock" and "Underwriters") and
(xii) of paragraph (c) above.
With respect to subparagraph (xii) of paragraph (c) above,
Palmer & Dodge, LLP and Davis Polk & Wardwell may state that their
opinion and belief are based upon their participation in the
preparation of the Registration Statement and Prospectus and any
amendments or supplements thereto and review and discussion of the
contents thereof, but are without independent check or verification,
except as specified.
The opinion of Palmer & Dodge LLP described in paragraph (c)
above shall be rendered to the Underwriters at the request of the
Company and shall so state therein.
(e) You shall have received on the Closing Date an opinion of
each of Finnegan, Henderson, Farabow, Garrett & Dunner, L.L.P. (only
with respect to sub paragraphs (iii), as to matters relating to gene
therapy, and (v)) and Hamilton, Brook, Smith & Reynolds, P.C., (except
as to matters relating to gene therapy), patent counsels for the
Company, dated the Closing Date, to the effect that:
(i) based on the information brought to such counsel's
attention by the Company with respect to the Company's
investigation, if any, of the published literature and patent
references relating to the inventions claimed in its patent
applications, such counsel disclosed all references known to
it to the Patent and Trademark Office in accordance with 37
C.F.R. Section 1.56; to the best of such counsel's knowledge,
all information submitted to the U.S. Patent and Trademark
Office in the relevant applications, and in connection with
the prosecution of the relevant
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<PAGE> 15
applications, was accurate; neither such counsel, nor to the
best of its knowledge, the Company, made any misrepresentation
or concealed any material information from the Patent and
Trademark Office in any of such applications, or in connection
with the prosecution of such applications in violation of 37
C.F.R. Section 1.56;
(ii) such counsel is unaware of any basis for a finding
that the Company does not have clear title or valid license
rights to the patents or patent applications referenced in the
Prospectus, and such counsel has not identified any basis for
a finding of unenforceability or invalidity of any patents or
proprietary information rights of the Company;
(iii) the statements in the Prospectus under the headings
["Risk Factors - Patents and Proprietary Rights" and "Business
- Patents, Proprietary Rights and Licenses"] constitute an
accurate summary of the matters referred to therein and fairly
present the information called for with respect to such
matters;
(iv) other than as disclosed in the Prospectus, based upon
a review of the third party rights made known to such counsel
and discussions with Company scientific personnel, such
counsel is not aware of any valid United States or foreign
patent that is or would be infringed by the activities of the
Company in the manufacture, use or sale of any presently
proposed product, as described in the Prospectus;
(v) other than as disclosed in the Prospectus, to the best
of such counsel's knowledge, there are no legal or
governmental proceedings pending (other than patent
applications pending) relating to patents or proprietary
information rights to which the Company is a party or of which
any such property of the Company is subject, and no such
proceedings are threatened or contemplated by governmental
authorities or others;
(vi) such counsel has reviewed United States Patent
Numbers 4,703,008, 5,441,868 and 5,547,933 (the "Amgen-Kirin
Patents") and the claims thereof. The technologies employed by
the Company
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<PAGE> 16
and the method of their use in the Company's products
described in the Prospectus do not literally infringe the
Amgen-Kirin Patents and would not infringe such patents under
the doctrine of equivalence;
(vii) such counsel has reviewed United States Patent
Number __________ (the "Chappel Patent") and the claims
thereof. The technologies employed by the Company and the
method of their use in the Company's products described in the
Prospectus do not literally infringe the Chappel Patent and
would not infringe such patent under the doctrine of
equivalence; and
(viii) such counsel has reviewed European filings relating
to U.S. Patent Application No. 08/102,390 (the "Patent
Application") as identified in Notice Declaring Interference
No. 103,737 (the "Notice") and claim #105 set forth in the
Notice, it being understood that such counsel has not reviewed
the actual patent application given such application's
confidential status. The technologies employed by the Company
and the method of their use in the Company's products
described in the Prospectus do not literally infringe the
Patent Application and would not infringe such patent under
the doctrine of equivalence.
With respect to subparagraph (i) and (ii) of
paragraph (e) above, each of Finnegan, Henderson, Farabow,
Garrett & Dunner, L.L.P. and Hamilton, Brook, Smith &
Reynolds, P.C. may state that it has not independently
conducted any investigation of the published literature and
patent references relating to the inventions claimed in the
Company's patent applications.
(f) You shall have received on the Closing Date an opinion of
Burns, Doane, Swecker & Mathis, patent counsel for the Underwriters,
dated the Closing Date, to the effect that:
(i) the statements in the Prospectus under the headings
["Risk Factors - Patents and Proprietary Rights" and "Business
- Patents, Proprietary Rights and Licenses"] constitute an
accurate summary of the matters referred to therein and fairly
present the information called for with respect to such
matters; and
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<PAGE> 17
(ii) such counsel has reviewed United States Patent
Numbers 4,703,008, 5,441,868 and 5,547,933 (the "Kirin-Amgen
Patents") and the claims thereof. The technologies employed by
the Company and the method of their use in the Company's
products described in the Prospectus do not literally infringe
the Amgen-Kirin Patents and would not infringe such patents
under the doctrine of equivalence;
(iii) such counsel has reviewed United States Patent
Number __________ (the "Chappel Patent") and the claims
thereof. The technologies employed by the Company and the
method of their use in the Company's products described in the
Prospectus do not literally infringe the Chappel Patent and
would not infringe such patent under the doctrine of
equivalence; and
(iv) such counsel has reviewed European filings relating
to U.S. Patent No. 08/102,390 (the "Patent Application") as
identified in Notice Declaring Interference No. 103,737 (the
"Notice") and claim #105 set forth in the Notice, it being
understood that such counsel has not reviewed the actual
patent application given such application's confidential
status. The technologies employed by the Company and the
method of their use in the Company's products described in the
Prospectus do not literally infringe the Patent Application
and would not infringe such patent under the doctrine of
equivalence.
(g) The Underwriters shall have received, on each of the date
hereof and the Closing Date, a letter dated the date hereof or the
Closing Date, as the case may be, in form and substance satisfactory to
the Underwriters, from Ernst & Young LLP, independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letter delivered on the Closing Date shall use a
"cut-off date" not earlier than the date hereof.
(h) The "lock-up" agreements, each substantially in the form
of Exhibit A hereto, between you and certain shareholders, officers and
directors of the Company relating to sales and certain other
16
<PAGE> 18
dispositions of shares of Common Stock or certain other securities,
delivered to you on or before the date hereof, shall be in full force
and effect on the Closing Date.
(i) The Shares shall have been approved for quotation
through the Nasdaq National Market.
The several obligations of the Underwriters to purchase Additional Shares
hereunder are subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good standing of the
Company, the due authorization and issuance of the Additional Shares and other
matters related to the issuance of the Additional Shares.
6. COVENANTS OF THE COMPANY. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:
(a) To furnish to you, without charge, four signed copies of
the Registration Statement (including exhibits thereto) and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to you in New York
City, without charge, prior to 10:00 A.M. New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in paragraph (c) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request.
(b) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of
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<PAGE> 19
the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, it
is necessary to amend or supplement the Prospectus to comply with
applicable law, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriters and to the dealers
(whose names and addresses you will furnish to the Company) to which
Shares may have been sold by you on behalf of the Underwriters and to
any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To use its best efforts to cause the Shares to be included
in the Nasdaq National Market.
(e) To endeavor to qualify the Shares for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall
reasonably request.
(f) To make generally available to the Company's security
holders and to you as soon as practicable an earning statement covering
the twelve-month period ending September 30, 1997 that satisfies the
provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(g) Whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all expenses incident to the performance of its
obligations under this Agreement, including: (i) the fees,
disbursements and expenses of the Company's counsel and the Company's
accountants in connection with the registration and delivery of the
Shares under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration
Statement, any preliminary prospectus, the Prospectus and amendments
and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof
to the Underwriters and dealers, in the quantities hereinabove
specified, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or
other taxes payable thereon, (iii) the cost of printing or producing
any Blue Sky or Legal Investment memorandum
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<PAGE> 20
in connection with the offer and sale of the Shares under state
securities laws and all expenses in connection with the qualification
of the Shares for offer and sale under state securities laws as
provided in Section 6(d) hereof, including filing fees and the
reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky
or Legal Investment memorandum, (iv) all filing fees and disbursements
of counsel to the Underwriters incurred in connection with the review
and qualification of the offering of the Shares by the National
Association of Securities Dealers, Inc., (v) all fees and expenses in
connection with the preparation and filing of the registration
statement on Form 8-A relating to the Common Stock and all costs and
expenses incident to listing the Shares on the Nasdaq National Market,
(vi) the cost of printing certificates representing the Shares, (vii)
the costs and charges of any transfer agent, registrar or depositary,
(viii) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without limitation,
expenses associated with the production of road show slides and
graphics, fees and expenses of any consultants engaged in connection
with the road show presentations with the prior approval of the
Company, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of any
aircraft chartered in connection with the road show, and (ix) all other
costs and expenses incident to the performance of the obligations of
the Company hereunder for which provision is not otherwise made in this
Section. It is understood, however, that except as provided in this
Section, Section 7 entitled "Indemnity and Contribution", and the last
paragraph of Section 9 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel,
stock transfer taxes payable on resale of any of the Shares by them and
any advertising expenses connected with any offers they may make.
7. INDEMNITY AND CONTRIBUTION. (a) 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 Securities Exchange Act of 1934, as amended
(the "Exchange Act"), from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
19
<PAGE> 21
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented 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
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to paragraph (a) or (b) of this Section 7, such
person (the "indemnified party") shall promptly notify the person against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party 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 party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is
20
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understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by Morgan Stanley &
Co. Incorporated, in the case of parties indemnified pursuant to paragraph (a)
of this Section 7, and by the Company, in the case of parties indemnified
pursuant to paragraph (b) of this Section 7. The indemnifying party 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 party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 7 is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then each indemnifying party under such paragraph, in lieu of
indemnifying such indemnified party thereunder, shall contribute to the amount
paid or payable by such indemnified party 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 Shares or (ii) if the allocation
provided by
21
<PAGE> 23
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand 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 hand in connection
with the offering of the Shares shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Shares (before
deducting expenses) received by the Company and the total underwriting discounts
and commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate Public Offering
Price of the Shares. The relative fault of the Company on the one hand and the
Underwriters on the other hand 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. The Underwriters' respective obligations to contribute
pursuant to this Section 7 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint.
(e) The Company and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 7 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 paragraph (d) of this Section 7. The
amount paid or payable by an indemnified party 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 reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public 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
22
<PAGE> 24
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 remedies provided for in this
Section 7 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.
(f) The indemnity and contribution provisions contained in
this Section 7 and the representations, warranties and other statements of the
Company contained 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 person controlling the Company and (iii) acceptance of and payment for any
of the Shares.
8. TERMINATION. This Agreement shall be subject to termination
by notice given by you to the Company, if (a) after the execution and delivery
of this Agreement and prior to the Closing Date (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 of Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of 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 your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses (a)(i) through (iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
9. EFFECTIVENESS; DEFAULTING UNDERWRITERS. This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.
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 Shares that it has or they have agreed to purchase hereunder on such
date, and the aggregate number of Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to
23
<PAGE> 25
purchase is not more than one-tenth of the aggregate number of the Shares to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the number of Firm Shares set forth opposite their
respective names in Schedule I bears to the aggregate number of Firm Shares set
forth opposite the names of all such non-defaulting Underwriters, or in such
other proportions as you may specify, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the number of Shares that any
Underwriter has agreed to purchase pursuant to this Agreement be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such number of
Shares without the written consent of such Underwriter. If, on the Closing Date,
any Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and
the aggregate number of Firm Shares with respect to which such default occurs is
more than one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares 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 you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. If, on the
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of Additional Shares
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
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, the Company will reimburse the Underwriters or such Underwriters
as have so terminated this Agreement with respect to themselves, severally, for
24
<PAGE> 26
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
10. COUNTERPARTS. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
25
<PAGE> 27
12. HEADINGS. The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Very truly yours,
Transkaryotic Therapies, Inc.
By_____________________________
Name:
Title:
Accepted as of the date hereof
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Pacific Growth Equities, Inc.
Acting severally on behalf
of themselves and the
several Underwriters named
herein.
By Morgan Stanley & Co.
Incorporated
By___________________________
Name:
Title:
26
<PAGE> 28
SCHEDULE I
<TABLE>
<CAPTION>
Number of
Firm Shares
Underwriter To Be Purchased
----------- ---------------
<S> <C>
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Pacific Growth Equities, Inc.
[Others]
---------------
Total ........
===============
</TABLE>
<PAGE> 29
Exhibit A
[Form of Lock-Up Letter]
_____________, 1996
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Pacific Growth Equities, Inc.
c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, NY 10036
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co.
Incorporated ("Morgan Stanley") proposes to enter into an Underwriting Agreement
(the "Underwriting Agreement") with Transkaryotic Therapies, Inc., a Delaware
corporation (the "Company"), providing for the public offering (the "Public
Offering") by the several Underwriters, including Morgan Stanley (the
"Underwriters"), of ___ shares (the "Shares") of the Common Stock, par value
$.01 per share, of the Company (the "Common Stock").
To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley on behalf of the Underwriters, it will not, during the period commencing
on the date hereof and ending 180 days after the date of the final prospectus
relating to the Public Offering (the "Prospectus"), (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, 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 (whether such shares or any such securities are now owned by the
undersigned or are hereafter acquired), 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, 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. In addition, the
<PAGE> 30
undersigned agrees that, without the prior written consent of Morgan Stanley on
behalf of the Underwriters, it will not, during the period commencing on the
date hereof and ending 180 days after the date of the Prospectus, 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.
Whether or not the Public Offering actually occurs depends on
a number of factors, including market conditions. Any Public 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)
