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Conformed Copy
TRANSKARYOTIC THERAPIES, INC.
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of June 9, 2000, among the
investors listed on Schedule I hereto (the "Investors") and Transkaryotic
Therapies, Inc., a Delaware corporation (the "Company").
R E C I T A L S
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WHEREAS, the Investors have, pursuant to the terms of the Stock Purchase
Agreement, dated as of May 18, 2000, by and among the Company and the Investors
(the "Purchase Agreement"), agreed to purchase shares of Series A Convertible
Preferred Stock, par value $0.01 per share, of the Company (the "Series A
Preferred Stock"); and
WHEREAS, the shares of Series A Preferred Stock are convertible into shares
of common stock, par value $0.01 per share, of the Company (the "Common Stock");
and
WHEREAS, the Company has agreed, as a condition precedent to the Investors'
obligations under the Purchase Agreement, to grant the Investors certain
registration rights; and
WHEREAS, the Company and the Investors desire to define the registration
rights of the Investors on the terms and subject to the conditions herein set
forth.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following terms have the respective meaning
set forth below:
(a) Commission: shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act;
(b) Exchange Act: shall mean the Securities Exchange Act of 1934, as
amended and the rules and regulations of the Commission issued under such Act as
they may, from time to time, be in effect;
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(c) Holder: shall mean the Investors and any persons or entities to whom
the rights granted under this Agreement are transferred by any Investor in
accordance with the terms of this Agreement;
(d) Initiating Holder: shall mean any Holder or Holders who in the
aggregate are Holders of more than 50% of the then outstanding Registrable
Securities;
(e) Person: shall mean an individual, partnership, joint-stock company,
corporation, trust or unincorporated organization, and a government or agency or
political subdivision thereof;
(f) register, registered and registration: shall mean a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act (and any post-effective amendments filed or required to be filed)
and the declaration or ordering of effectiveness of such registration statement;
(g) Registrable Securities: shall mean (A) shares of Common Stock issuable
upon conversion of the shares of Series A Preferred Stock and (B) any additional
shares of Common Stock acquired by the Investors, and (C) any stock of the
Company issued as a dividend or other distribution with respect to, or in
exchange for or in replacement of, the shares of Series A Preferred Stock or
Common Stock referred to in clause (A) or (B); provided, however, that shares of
Common Stock which are Registrable Shares shall cease to be Registrable Shares
upon (i) any sale pursuant to a Registration Statement or Rule 144 under the
Securities Act or (ii) any sale in any manner to a person or entity which is not
entitled to the rights provided by this Agreement. Wherever reference is made in
this Agreement to a request or consent of holders of a certain percentage of
Registrable Shares, the determination of such percentage shall include shares of
Common Stock issuable upon conversion of the Shares even if such conversion has
not been effected.
(h) Registration Expenses: shall mean all expenses incurred by the Company
in compliance with Sections 2(a), (b) and (c) hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, fees and expenses of one counsel for
all the Holders in an amount not to exceed $15,000, blue sky fees and expenses
and the expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company, which shall be paid in any event by the Company), but excluding Selling
Expenses;
(i) Security, Securities: shall have the meaning set forth in Section 2(1)
of the Securities Act;
(j) Securities Act: shall mean the Securities Act of 1933, as amended; and
(k) Selling Expenses: shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for each of the Holders other than fees and expenses of
one counsel for all the Holders in an amount not to exceed $15,000.
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SECTION 2. REGISTRATION RIGHTS
(a) Requested Registration.
(i) Request for Registration. If the Company shall receive from an
Initiating Holder, at any time, a written request that the Company effect any
registration with respect to all or a part of the Registrable Securities, the
Company will:
(1) promptly give written notice of the proposed registration,
qualification or compliance to all other Holders; and
(2) as soon as practicable, use its commercially reasonable efforts to
effect such registration (including, without limitation, filing post-effective
amendments and effecting appropriate qualification under applicable blue sky or
other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act) as may be so requested and as would
permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with all or
such portion of the Registrable Securities of any Holder or Holders joining in
such request as are specified in a written request received by the Company
within 10 business days after written notice from the Company is given under
Section 2(a)(i)(1) above; provided that the Company may effect such registration
on such available form of registration statement as the Company determines (but,
in the case of an underwritten offering, shall include such additional
information, such as a customary "Business" section, as the Initiating Holders
shall reasonably request); and provided further that the Company shall not be
obligated to effect, or take any action to effect, any such registration
pursuant to this Section 2(a):
(w) Within 180 days of the effective date of the most recent
registration pursuant to this Section 2 in which securities held by the
requesting Holder could have been included for sale or distribution.
(x) In any particular jurisdiction in which the Company would be
required to qualify to do business as a foreign corporation or execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to
qualification to do business or service in such jurisdiction and except as
may be required by the Securities Act or applicable rules or regulations
thereunder;
(y) After the Company has effected (A) two (2) registrations pursuant
to this Section 2(a) or (B) three (3) registrations pursuant to Section
2(a) or 2(c), whichever occurs sooner, and such registrations have been
declared or ordered effective; or
(z) If the Registrable Securities requested by all Holders to be
registered pursuant to such request do not have an anticipated
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aggregate public offering price (before any underwriting discounts and
commissions) of not less than $15,000,000.
The registration statement filed pursuant to the request of the Initiating
Holders may, subject to the provisions of Section 2(a)(ii) below, include other
securities of the Company which are held by Persons who, by virtue of agreements
with the Company, are entitled to include their securities in any such
registration ("Other Stockholders"). In the event any Holder requests a
registration pursuant to this Section 2(a) in connection with a distribution of
Registrable Securities to its partners, the registration shall provide for the
resale by such partners, if requested by such Holder if distributee partners are
transferees under the last paragraph of this Section 2(a)(i)(2).
The registration rights set forth in this Section 2 may be assigned by an
Investor to (i) any person or entity to which at least 15% of the Registrable
Securities held by such Investor are transferred by such Investor, provided that
the transferee provides written notice of such assignment to the Company and
agrees in writing to be bound hereby or (ii) to any partner of such Investor (or
nominee or subsidiary of such partner), and such transferee shall be deemed an
"Investor" for purposes of this Agreement;.
(ii) Underwriting. If the Initiating Holders intend to distribute the
Registrable Securities covered by their request by means of an underwriting,
they shall so advise the Company as a part of their request made pursuant to
Section 2(a). If Other Stockholders request such inclusion, the Holders shall
offer to include the securities of such Other Stockholders in the underwriting
and may condition such offer on their acceptance of the further applicable
provisions of this Section 2. The Holders whose shares are to be included in
such registration and the Company shall (together with all Other Stockholders
proposing to distribute their securities through such underwriting) enter into
an underwriting agreement in customary form with the representative of the
underwriter or underwriters selected for such underwriting by the Initiating
Holders and reasonably acceptable to the Company. Notwithstanding any other
provision of this Section 2(a), if the representative advises the Holders in
writing that marketing factors require a limitation on the number of shares to
be underwritten, the securities of the Company held by Other Stockholders shall
be excluded from such registration to the extent so required by such limitation.
If, after the exclusion of such shares, further reductions are still required,
the number of shares included in the registration by each Holder shall be
reduced on a pro rata basis (based on the number of shares held by such Holder),
by such minimum number of shares as is necessary to comply with such request. No
Registrable Securities or any other securities excluded from the underwriting by
reason of the underwriter's marketing limitation shall be included in such
registration. If any Other Stockholder who has requested inclusion in such
registration as provided above disapproves of the terms of the underwriting,
such person may elect to withdraw therefrom by written notice to the Company,
the underwriter and the Initiating Holders. The securities so withdrawn shall
also be withdrawn from registration. If the underwriter has not limited the
number of Registrable Securities or other securities to be underwritten, the
Company and officers and directors of the Company may include its or their
securities for its or their own account in such registration if the
representative so
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agrees and if the number of Registrable Securities and other securities which
would otherwise have been included in such registration and underwriting will
not thereby be limited.
(b) Company Registration.
(i) If the Company shall determine to register any of its equity securities
either for its own account or for the account of Other Stockholders, other than
a registration relating solely to employee benefit plans, or a registration
relating solely to a Commission Rule 145 transaction, or a registration on any
registration form which does not permit secondary sales or does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of Registrable Securities, the Company
will:
(1) promptly give to each of the Holders a written notice thereof
(which shall include a list of the jurisdictions in which the Company
intends to attempt to qualify such securities under the applicable blue sky
or other state securities laws); and
(2) include in such registration (and any related qualification under
blue sky laws or other compliance), and in any underwriting involved
therein, all the Registrable Securities specified in a written request or
requests, made by the Holders within fifteen (15) days after receipt of the
written notice from the Company described in clause (1) above, except as
set forth in Section 2(b)(ii) below. Such written request may specify all
or a part of the Holders' Registrable Securities. In the event any Holder
requests inclusion in a registration pursuant to this Section 2(b) in
connection with a distribution of Registrable Securities to its partners,
the registration shall provide for the resale by such partners, if
requested by such Holder if distributee partners are transferees under the
last paragraph of Section 2(a)(i)(2);
provided that the Company shall have the right to postpone or withdraw any
registration effected pursuant to this Section 2(b) without obligation to any
Holder.
(ii) Underwriting.
(1) If the registration of which the Company gives notice is for a
registered public offering involving an underwriting initiated by the
Company or initiated pursuant to a demand by Other Stockholders, the
Company shall so advise each of the Holders as a part of the written notice
given pursuant to Section 2(b)(i)(1). In such event, the right of each of
the Holders to registration pursuant to this Section 2(b) shall be
conditioned upon such Holders' participation in such underwriting and the
inclusion of such Holders' Registrable Securities in the underwriting to
the extent provided herein. The Holders whose shares are to be included in
such registration shall (together with the Company and the Other
Stockholders distributing their securities through such underwriting) enter
into an underwriting agreement in customary form with the representative of
the underwriter or underwriters selected for underwriting by the Company.
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(2) Notwithstanding any other provision of this Section 2(b), if the
underwriting is initiated by the Company and if the representative
determines that marketing factors require a limitation on the number of
shares to be underwritten, the Company shall have priority in including
shares in the underwriting and the representative may (subject to the
allocation priority set forth below) limit the number of Registrable
Securities to be included in the registration and underwriting. The Company
shall so advise all holders of securities requesting registration, and the
number of shares of securities that are entitled to be included in the
registration and underwriting shall be allocated in the following manner:
The securities of the Company held by officers, directors and Other
Stockholders of the Company (other than Registrable Securities and other
than securities held by Other Stockholders) shall be excluded from such
registration and underwriting to the extent required by such limitation,
and, if a limitation on the number of shares is still required, the number
of shares that may be included in the registration and underwriting by each
of the Holders and Other Stockholders shall be reduced, on a pro rata basis
(based on the number of shares held by such Holder or Other Stockholder),
by such minimum number of shares as is necessary to comply with such
limitation. If any of the Holders or any officer, director or Other
Stockholder disapproves of the terms of any such underwriting, he may elect
to withdraw therefrom by written notice to the Company and the underwriter.
Any Registrable Securities or other securities excluded or withdrawn from
such underwriting shall be withdrawn from such registration.
(3) Notwithstanding any other provision of this Section 2(b), if the
underwriting is initiated pursuant to a demand by Other Stockholders and if
the representative determines that marketing factors require a limitation
on the number of shares to be underwritten, the Other Stockholders shall
have priority in including shares in the underwriting and the
representative may (subject to the allocation priority set forth below)
limit the number of Registrable Securities to be included in the
registration and underwriting. The Company shall so advise all holders of
securities requesting registration, and the number of shares of securities
that are entitled to be included in the registration and underwriting shall
be allocated in the following manner: The securities of the Company held by
the Company and officers and directors of the Company (other than Other
Stockholders) shall be excluded from such registration and underwriting to
the extent required by such limitation, and, if a limitation on the number
of shares is still required, the number of shares that may be included in
the registration and underwriting by each of the Holders shall be reduced,
on a pro rata basis (based on the number of shares held by such Holder), by
such minimum number of shares as is necessary to comply with such
limitation. If any of the Holders or the Company, or any officer or
director of the Company disapproves of the terms of any such underwriting,
he may elect to withdraw therefrom by written notice to the Company and the
underwriter. Any Registrable Securities or other securities excluded or
withdrawn from such underwriting shall be withdrawn from such registration.
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(c) Form S-3. The Holders shall have the right to request three (3)
registrations on Form S-3 (such requests shall be in writing and shall state the
number of shares of Registrable Securities to be disposed of and the intended
method of disposition of shares by such holders), subject only to the following:
(i) The Company shall not be required to effect a registration pursuant to
this Section 2(c) unless the Holder or Holders requesting registration propose
to dispose of shares of Registrable Securities having an aggregate price to the
public (before deduction of underwriting discounts and expenses of sale) of more
than $10,000,000;
(ii) The Company shall not be required to effect a registration pursuant to
this Section 2(c) within 180 days of the effective date of the most recent
registration pursuant to this Section 2 in which securities held by the
requesting Holder could have been included for sale or distribution;
(iii) The Company shall not be required to effect a registration pursuant
to this Section 2(c) after the Company has effected (A) two (2) registrations
pursuant to Section 2(a) or (B) three (3) registrations pursuant to Section 2(a)
or this Section 2(c), whichever occurs sooner, and such registrations have been
declared or ordered effective; and
(iv) The Company shall not be obligated to effect any registration pursuant
to this Section 2(c) in any particular jurisdiction in which the Company would
be required to qualify to do business as a foreign corporation or execute a
general consent to service of process in effecting such registration,
qualification or compliance, unless the Company is already subject to
qualification to do business or service in such jurisdiction and except as may
be required by the Securities Act or applicable rules or regulations thereunder.
The Company shall give written notice to all Holders of the receipt of a
request for registration pursuant to this Section 2(c) and shall provide a
reasonable opportunity (not to exceed 20 days after the date of such notice) for
other Holders to participate in the registration, provided that if the
registration is for an underwritten offering, the terms of Section 2(a)(ii)
shall apply to all participants in such offering. Subject to the foregoing, the
Company will use its commercially reasonable efforts to effect promptly the
registration of all shares of Registrable Securities on Form S-3 to the extent
requested by the Holder or Holders thereof for purposes of disposition. In the
event any Holder requests a registration pursuant to this Section 2(c) in
connection with a distribution of Registrable Securities to its partners, the
registration shall provide for the resale by such partners, if requested by such
Holder if distributee partners are transferees under the last paragraph of
Section 2(a)(i)(2).
(d) Expenses of Registration. All Registration Expenses incurred in
connection with any registration, qualification or compliance pursuant to this
Section 2 shall be borne by the Company (unless at the request of the Holders,
the registration statement is not filed or is withdrawn, in which case the
Holders shall pay all of the Registration Expenses), and all Selling Expenses
shall be borne by the Holders of the securities so registered pro rata on the
basis of the number of their shares so registered.
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(e) Registration Procedures. In the case of each registration effected by
the Company pursuant to this Section 2, the Company will keep the Holders, as
applicable, advised in writing as to the initiation of each registration and as
to the completion thereof. At its expense, the Company will:
(i) keep such registration effective for a period of ninety (90) days or
until the Holders (or in the case of a distribution to the partners of such
Holder, such partners), as applicable, have completed the distribution described
in the registration statement relating thereto, whichever first occurs;
provided, however, that in the case of any registration of Registrable
Securities on Form S-3 which are intended to be offered on a continuous or
delayed basis, such 90-day period shall be extended until all such Registrable
Securities are sold (but in no event later than two years after the effective
date of the registration statement); provided that Rule 415, or any successor
rule under the Securities Act, permits an offering on a continuous or delayed
basis, and provided further that applicable rules under the Securities Act
governing the obligation to file a post-effective amendment permit, in lieu of
filing a post-effective amendment which (y) includes any prospectus required by
Section 10(a) of the Securities Act or (z) reflects facts or events representing
a material or fundamental change in the information set forth in the
registration statement, the incorporation by reference of information required
to be included in (y) and (z) above to be contained in periodic reports filed
pursuant to Section 12 or 15(d) of the Exchange Act in the registration
statement (and the Company is eligible to incorporate by reference such
information into the applicable registration statement);
(ii) furnish such number of prospectuses and other documents incident
thereto as each of the Holders, as applicable, from time to time may reasonably
request;
(iii) notify each Holder of Registrable Securities covered by such
registration at any time when a prospectus relating thereto is required to be
delivered under the Securities Act of the happening of any event as a result of
which the prospectus included in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances then existing; and
(iv) furnish, on the date that such Registrable Securities are delivered to
the underwriters for sale, if such securities are being sold through
underwriters or, if such securities are not being sold through underwriters, on
the date that the registration statement with respect to such securities becomes
effective, (1) an opinion, dated as of such date, of the counsel representing
the Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders participating
in such registration, addressed to the underwriters, if any, and to the Holders
participating in such registration and (2) a letter, dated as of such date, from
the independent certified public accountants of the Company, in form and
substance as is customarily given by independent certified public accountants to
underwriters in an underwritten public offering and reasonably satisfactory to a
majority in interest of the Holders participating
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in such registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders participating in such
registration.
(f) Limitations on Registration Rights.
(i) Notwithstanding the provisions of this section 2, the Company may by
written notice to the Holders (x) delay filing a Registration Statement
requested by a Holder (a "Delayed Registration Statement") or (y) require that
the Holders immediately cease sales of shares under any effective Registration
Statement ("Suspended Registration Statement"), in any period during which the
Company is engaged in (i) a registered public offering of the Company, or (ii)
any activity or transaction or preparations or negotiations for any activity or
transaction ("Company Activity") that the Company desires to keep confidential
for business reasons, if the Company determines in good faith that the public
disclosure requirements imposed on the Company under the Securities Act in
connection with any such Registration Statement would require disclosure of the
Company Activity; provided, that, (i) in the aggregate, all such delays of
filing Delayed Registration Statements and/or cessations of sales under
Suspended Registration Statements shall not exceed 90 days in any 12-month
period and (ii) the Company shall cause any Suspended Registration Statement to
remain effective for one additional day for each day, or any portion of a day,
that the Holders were required to cease sales of shares thereunder; and
(ii) If the Company requires the Holders to cease sales of shares pursuant
to Section 2f(i) above, the Company shall, as promptly as practicable following
the termination of the circumstance which entitled the Company to do so, give
prompt written notice to the Holders that such circumstance has terminated and
that they may resume sales pursuant to the Suspended Registration Statement. If
the prospectus included in such Suspended Registration Statement has been
amended to comply with the requirements of the Securities Act, the Company shall
enclose such revised prospectus with the notice to Holders given pursuant to
this section 2f(ii) and the Holders shall make no offers or sales of shares
pursuant to such Suspended Registration Statement other than by means of such
revised prospectus.
(g) Indemnification.
(i) The Company will indemnify each of the Holders, as applicable, each of
its officers, directors and partners, and each person controlling each of the
Holders, with respect to each registration which has been effected pursuant to
this Section 2, and each underwriter, if any, and each person who controls any
underwriter, against all claims, losses, damages and liabilities (or actions in
respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular or other document (including any related registration statement,
notification or the like) incident to any such registration, qualification or
compliance, or based on 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, or any violation by the Company of the Securities Act or
the Exchange Act or any rule or regulation thereunder applicable to the Company
and relating to action or
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inaction required of the Company in connection with any such registration,
qualification or compliance, and will reimburse each of the Holders, each of its
officers, directors and partners, and each person controlling each of the
Holders, each such underwriter and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending any such claim, loss, damage,
liability or action, provided that the Company will not be liable in any such
case to the extent that any such claim, loss, damage, liability or expense
arises out of or is based on any untrue statement or omission based upon written
information furnished to the Company by the Holders or underwriter and stated to
be specifically for use therein.
(ii) Each of the Holders will, if Registrable Securities held by it are
included in the securities as to which such registration, qualification or
compliance is being effected, indemnify the Company, each of its directors and
officers and each underwriter, if any, of the Company's securities covered by
such a registration statement, each person who controls the Company or such
underwriter, each Other Stockholder and each of their officers, directors, and
partners, and each person controlling such Other Stockholder against all claims,
losses, damages and liabilities (or actions in respect thereof) arising out of
or based on any untrue statement (or alleged untrue statement) of a material
fact contained in any such registration statement, prospectus, offering circular
or other document made by such Holder, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements by such Holder therein not misleading, and will reimburse the
Company and such Other Stockholders, directors, officers, partners, persons,
underwriters or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability or action, in each case to the extent, but only to the extent,
that such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by such Holder and stated to be specifically for use
therein; provided, however, that the obligations of each of the Holders
hereunder shall be limited to an amount equal to the net proceeds to such Holder
of securities sold as contemplated herein.
(iii) Each party entitled to indemnification under this Section 2(f) (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of any such claim or any
litigation resulting therefrom; provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld) and the Indemnified Party may participate in such
defense at such party's expense (unless the Indemnified Party shall have
reasonably concluded that there may be a conflict of interest between the
Indemnifying Party and the Indemnified Party in such action, in which case the
fees and expenses of counsel shall be at the expense of the Indemnifying Party),
and provided further that the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 2 unless the
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Indemnifying Party is materially prejudiced thereby. No Indemnifying Party, in
the defense of any such claim or litigation shall, except with the consent of
each Indemnified Party, consent to entry of any judgment or enter into any
settlement which does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. No Indemnified Party may
settle or agree to settle any claim or litigation as to which indemnification
may be sought hereunder without the prior written consent of the Indemnifying
Party. Each Indemnified Party shall furnish such information regarding itself or
the claim in question as an Indemnifying Party may reasonably request in writing
and as shall be reasonably required in connection with the defense of such claim
and litigation resulting therefrom.
(iv) If the indemnification provided for in this Section 2(f) is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage or expense referred to herein,
then the Indemnifying Party, in lieu of indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions which resulted in such loss, liability, claim,
damage or expense, as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party 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 Indemnifying Party
or by the Indemnified Party and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
(v) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in connection with any underwritten public offering contemplated by this
Agreement are in conflict with the foregoing provisions, the provisions in such
underwriting agreement shall be controlling.
(vi) The foregoing indemnity agreement of the Company and Holders is
subject to the condition that, insofar as they relate to any loss, claim,
liability or damage arising out of a statement made in or omitted from a
preliminary prospectus but eliminated or remedied in the amended prospectus on
file with the Commission at the time the registration statement in question
becomes effective or the amended prospectus filed with the Commission pursuant
to Commission Rule 424(b) (the "Final Prospectus"), such indemnity or
contribution agreement shall not inure to the benefit of any underwriter or
Holder if a copy of the Final Prospectus was furnished to the underwriter or
Holder and was not furnished to the person asserting the loss, liability, claim
or damage at or prior to the time such action is required by the Securities Act.
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(h) Information by the Holders.
(i) Each of the Holders holding securities included in any registration
shall furnish to the Company such information regarding such Holder and the
distribution proposed by such Holder as the Company may reasonably request in
writing and as shall be reasonably required in connection with any registration,
qualification or compliance referred to in this Section 2.
(ii) In the event that, either immediately prior to or subsequent to the
effectiveness of any registration statement, any Holder shall distribute
Registrable Securities to its partners, such Holder shall so advise the Company
and provide such information as shall be necessary to permit an amendment to
such registration statement to provide information with respect to such
partners, as selling securityholders. Promptly following receipt of such
information, the Company shall file an appropriate amendment to such
registration statement reflecting the information so provided. Any incremental
expense to the Company resulting from such amendment shall be borne by such
Holder. Any Holder who shall have effected such a distribution shall indemnify
the Company in accordance with Section 2(g) with respect to the information so
provided to the Company.
(i) Rule 144 Reporting.
With a view to making available the benefits of certain rules and
regulations of the Commission which may permit the sale of restricted securities
to the public without registration, the Company agrees to:
(i) make and keep public information available as those terms are
understood and defined in Rule 144 under the Securities Act ("Rule 144"), at all
times;
(ii) use its best efforts to file with the Commission in a timely manner
all reports and other documents required of the Company under the Securities Act
and the Exchange Act; and
(iii) so long as the Holder owns any Registrable Securities, furnish to the
Holder upon request, a written statement by the Company as to its compliance
with the reporting requirements of Rule 144, and of the Securities Act and the
Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other reports and documents so filed as the Holder may
reasonably request in availing itself of any rule or regulation of the
Commission allowing the Holder to sell any such securities without registration.
(j) Termination. The registration rights set forth in this Section 2 shall
not be available to any Holder if, (i) in the opinion of counsel to the Company,
all of the Registrable Securities then owned by such Holder could be sold in any
90-day period pursuant to Rule 144
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or (ii) all of the Registrable Securities held by such Holder have been sold in
a registration pursuant to the Securities Act or pursuant to Rule 144.
SECTION 3. MISCELLANEOUS
(a) Directly or Indirectly. Where any provision in this Agreement refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.
(b) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware applicable to contracts made
and to be performed entirely within such State.
(c) Section Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.
(d) Notices.
(i) All communications under this Agreement shall be in writing and shall
be delivered by hand or facsimile or mailed by overnight courier or by
registered or certified mail, postage prepaid, return receipt requested:
(1) if to the Company, to Daniel E. Geffken, Vice President-Finance
and Chief Financial Officer, Transkaryotic Therapies, Inc., 195 Albany
Street, Cambridge, MA 02139 (facsimile: (617) 491-7903) or at such other
address as it may have furnished in writing to the Holders with a copy to
David E. Redlick, Esq., Hale and Dorr LLP, 60 State Street, Boston, Ma
02109 (facsimile: (617) 526-5000);
(2) if to the Holders, at the address or facsimile number listed on
Schedule I hereto, or at such other address or facsimile number as may have
been furnished the Company in writing.
(ii) Any notice so addressed shall be deemed to be given: if delivered by
hand or facsimile, on the date of such delivery; if sent by overnight courier,
on the first business day following the date of such sending; and if mailed by
registered or certified mail, on the third business day after the date of such
mailing.
(e) Reproduction of Documents. This Agreement and all documents relating
thereto, including, without limitation, any consents, waivers and modifications
which may hereafter be executed may be reproduced by the Holders by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and the Holders may destroy any original document so reproduced.
The parties hereto agree and stipulate that any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made by the Holders in the regular course of business) and that
any
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enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties.
(g) Entire Agreement; Amendment and Waiver. This Agreement constitutes the
entire understanding of the parties hereto and supersedes all prior
understanding among such parties. This Agreement may be amended, and the
observance of any term of this Agreement may be waived, with (and only with) the
written consent of the Company and the Holders holding a majority of the then
outstanding Registrable Securities.
(h) Severability. In the event that any part or parts of this Agreement
shall be held illegal or unenforceable by any court or administrative body of
competent jurisdiction, such determination shall not affect the remaining
provisions of this Agreement which shall remain in full force and effect.
(i) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first set forth above.
TRANSKARYOTIC THERAPIES, INC.
By: /s/ DANIEL E. GEFFKEN
------------------------------
Name: Daniel E. Geffken
Title: VP Finance; Chief Financial
Officer
WARBURG, PINCUS EQUITY PARTNERS, L.P.
By: WARBURG, PINCUS & CO.,
General Partner
By: /s/ JONATHAN LEFF
------------------------------
Name: Jonathan Leff
Title: Partner
WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS I, C.V.
By: WARBURG, PINCUS & CO.,
General Partner
By: /s/ JONATHAN LEFF
------------------------------
Name: Jonathan Leff
Title: Partner
WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS II, C.V.
By: WARBURG, PINCUS & CO.,
General Partner
By: /s/ JONATHAN LEFF
------------------------------
Name: Jonathan Leff
Title: Partner
WARBURG, PINCUS NETHERLANDS EQUITY PARTNERS III, C.V.
By: WARBURG, PINCUS & CO.,
General Partner
By: /s/ JONATHAN LEFF
------------------------------
Name: Jonathan Leff
Title: Partner
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Schedule I
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Investors
---------
Investor Name and Address
Warburg, Pincus Equity Partners, L.P.
466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-9351
Attention: Jonathan Leff
Warburg, Pincus Netherlands Equity Partners I, C.V.
466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-9351
Attention: Jonathan Leff
Warburg, Pincus Netherlands Equity Partners II, C.V.
466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-9351
Attention: Jonathan Leff
Warburg, Pincus Netherlands Equity Partners III, C.V.
466 Lexington Avenue
New York, NY 10017
Facsimile: (212) 878-9351
Attention: Jonathan Leff
