Exhibit 1
FORM OF UNDERWRITING AGREEMENT
3,000,000 Shares
GENOME THERAPEUTICS CORP.
Common Stock
UNDERWRITING AGREEMENT
April , 2000
CIBC World Markets Corp.
Warburg Dillon Read LLC
Dain Rauscher Incorporated
Tucker Anthony Incorporated
c/o CIBC World Markets Corp.
CIBC Oppenheimer Tower
World Financial Center
New York, New York 10281
On behalf of the Several Underwriters
named on Schedule I attached hereto
Ladies and Gentlemen:
Genome Therapeutics Corporation, a Massachusetts corporation (the
"Company"), proposes to sell to you and the other underwriters named on Schedule
I to this Agreement (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), an aggregate of 3,000,000 shares (the
"Firm Shares") of the Company's Common Stock, $0.10 par value (the "Common
Stock"). In addition, the Company proposes to grant to the Underwriters an
option to purchase up to an additional 450,000 shares (the "Option Shares") of
Common Stock from it for the purpose of covering over-allotments in connection
with the sale of the Firm Shares. The Firm Shares and the Option Shares are
together called the "Shares."
1. SALE AND PURCHASE OF THE SHARES. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Company, at $ per share (the "Initial Price"), the number of Firm Shares set
forth opposite the name of such Underwriter on Schedule I to this Agreement,
subject to adjustment in accordance with section 10 hereof.
(b) The Company grants to the several Underwriters an option to
purchase, severally and not jointly, all or any part of the Option Shares at the
Initial Price. The number of Option Shares to be purchased by each Underwriter
shall be the same percentage (adjusted by the Representatives to eliminate
fractions) of the total number of Option Shares to be purchased by the
Underwriters as such Underwriter is purchasing of the Firm Shares. Such option
may be exercised only to cover over-allotments in the sales of the Firm Shares
by the Underwriters and may be exercised in whole or in part at any time on or
before 12:00 noon, Boston time, on the business day before the Firm Shares
Closing Date (as defined below), and only once thereafter within 30 days after
the date of this Agreement, in each case upon written, facsimile, or telegraphic
notice, or verbal or telephonic notice confirmed by written, facsimile, or
telegraphic notice, by the Representatives to the Company no later than 12:00
noon, Boston time, on the business day before the Firm Shares Closing Date or at
least two business days before the Option Shares Closing Date (as defined
below), as the case may be, setting forth the number of Option Shares to be
purchased and the time and date (if other than the Firm Shares Closing Date) of
such purchase. No Option Shares shall be sold or delivered unless the Firm
Shares have been or simultaneously are sold and delivered.
2. DELIVERY AND PAYMENT. Delivery by the Company of the Firm Shares
to the Representatives for the respective accounts of the Underwriters, and
payment of the purchase price by wire transfer of immediately available funds to
the Company, shall take place at the offices of Ropes & Gray, One International
Place, Boston, Massachusetts 02110, at 10:00 a.m., Boston time, on the third
business day following the date of this Agreement, or at such time on such other
date, not later than 10 business days after the date of this Agreement, as shall
be agreed upon by the Company and the Representatives (such time and date of
delivery and payment are called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is exercised,
delivery by the Company of the Option Shares to the Representatives for the
respective accounts of the Underwriters and payment of the purchase price by
wire transfer of immediately available funds to the Company shall take place at
the offices of Ropes & Gray specified above at the time and on the date (which
may be the same date as, but in no event shall be earlier than, the Firm Shares
Closing Date) specified in the notice referred to in Section 1(b) (such time and
date of delivery and payment are called the "Option Shares Closing Date"). The
Firm Shares Closing Date and the Option Shares Closing Date are called,
individually, a "Closing Date" and, together, the "Closing Dates."
If the Representatives so elect, delivery of the Shares may be made by
credit through full fast transfer to the accounts at The Depository Trust
Company designated by the Representatives. Unless otherwise agreed to,
certificates evidencing the Shares shall be registered in such names
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and shall be in such denominations as the Representatives shall request at least
two full business days before the Firm Shares Closing Date or, in the case of
Option Shares, on the day of notice of exercise of the option as described in
Section 1(b) and shall be made available to the Representatives for checking and
packaging, at such place as is designated by the Representatives, on the full
business day before the Firm Shares Closing Date (or the Option Shares Closing
Date in the case of the Option Shares).
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING. The
Company has prepared in conformity with the requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and the published rules and
regulations thereunder (the "Rules") adopted by the Securities and Exchange
Commission (the "Commission") a Registration Statement on Form S-3 (No.
333-32614), including a preliminary prospectus relating to the Shares, and has
filed with the Commission the Registration Statement (as hereinafter defined)
and such amendments thereof as may have been required to the date of this
Agreement. Copies of such Registration Statement (including all amendments
thereof) and of the related preliminary prospectus have heretofore been
delivered by the Company to you. The term "Preliminary Prospectus" means any
preliminary prospectus (as described in Rule 430 of the Rules) included at any
time as a part of the Registration Statement or filed with the Commission by the
Company with the consent of the Representatives pursuant to Rule 424(a) of the
Rules. The term "Registration Statement" as used in this Agreement means the
initial registration statement (including all exhibits, financial schedules and
information deemed to be a part of the Registration Statement through
incorporation by reference or otherwise), as amended at the time and on the date
it becomes effective (the "Effective Date") including the information (if any)
deemed to be part thereof at the time of effectiveness pursuant to Rule 430A of
the Rules, and as thereafter amended by post-effective amendments. If the
Company has filed an abbreviated registration statement to register additional
Shares pursuant to Rule 462(b) under the Rules (the "462(b) Registration
Statement") then any reference herein to the Registration Statement shall also
be deemed to include such 462(b) Registration Statement. The term "Prospectus"
as used in this Agreement means the prospectus in the form included in the
Registration Statement at the time of effectiveness or, if Rule 430A of the
Rules is relied on, the term Prospectus shall also include the final prospectus
filed with the Commission pursuant to Rule 424(b) of the Rules.
The Company understands that the Underwriters propose to make a public
offering of the Shares, as set forth in and pursuant to the Prospectus, as soon
after the Effective Date and the date of this Agreement as the Representatives
deem advisable. The Company hereby confirms that the Underwriters and dealers
have been authorized to distribute or cause to be distributed each Preliminary
Prospectus and are authorized to distribute the Prospectus (as from time to time
amended or supplemented if the Company furnishes amendments or supplements
thereto to the Underwriters).
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Underwriter as follows:
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(a) The Company and the transactions contemplated by this
Agreement meet the requirements for using Form S-3 under the Securities Act. On
the Effective Date the Registration Statement complied, and on the date of the
Prospectus, on the date any post-effective amendment to the Registration
Statement shall become effective, on the date any supplement or amendment to the
Prospectus is filed with the Commission and on each Closing Date, the
Registration Statement and the Prospectus (and any amendment thereof or
supplement thereto) will comply, in all material respects, with the applicable
provisions of the Securities Act and the Rules and the Securities Exchange Act
of 1934, as amended (the "Exchange Act") and the rules and regulations of the
Commission thereunder. The Registration Statement did not, as of the Effective
Date, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and on the other dates referred to above
neither the Registration Statement nor the Prospectus, nor any amendment thereof
or supplement thereto, will contain any untrue statement of a material fact or
will omit to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading. When any related
preliminary prospectus was first filed with the Commission (whether filed as
part of the Registration Statement or any amendment thereto or pursuant to Rule
424(a) of the Rules) and when any amendment thereof or supplement thereto was
first filed with the Commission, such preliminary prospectus as amended or
supplemented complied in all material respects with the applicable provisions of
the Securities Act and the Rules and did not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein not misleading.
Notwithstanding the foregoing, none of the representations and warranties in
this paragraph 4(a) shall apply to statements in, or omissions from, the
Registration Statement or the Prospectus made in reliance upon, and in
conformity with, information herein or otherwise furnished in writing by the
Representatives on behalf of the several Underwriters for use in the
Registration Statement or the Prospectus. With respect to the preceding
sentence, the Company acknowledges that the only information furnished in
writing by the Representatives on behalf of the several Underwriters for use in
the Registration Statement or the Prospectus is the statements contained under
the caption "Underwriting" in the Prospectus.
(b) The Registration Statement is effective under the Securities
Act and no stop order preventing or suspending the effectiveness of the
Registration Statement or suspending or preventing the use of the Prospectus has
been issued and no proceedings for that purpose have been instituted or to the
Company's knowledge, are threatened under the Securities Act. Any required
filing of the Prospectus and any supplement thereto pursuant to Rule 424(b) of
the Rules has been or will be made in the manner and within the time period
required by such Rule 424(b).
(c) The documents incorporated by reference in the Registration
Statement and the Prospectus, at the time they were filed (or, if any amendment
with respect to any such document was filed, when such amendment was filed) with
the Commission, complied in all material respects with the requirements of the
Exchange Act and, when read together and with the other information in the
Registration Statement and the Prospectus, do not contain an untrue statement of
a material fact or omit to state a material fact required to be stated therein
or
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necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except to the extent
that any statements in such documents have been superseded by statements
specifically set forth in the Registration Statement and the Prospectus.
(d) The consolidated financial statements of the Company
(including all notes and schedules thereto) included or incorporated by
reference in the Registration Statement and Prospectus present fairly the
consolidated financial position, results of operations and cash flows and the
stockholders' equity and the other financial information of the Company included
therein at the respective dates and for the respective periods to which they
apply; and such financial statements and related schedules and notes have been
prepared in conformity with generally accepted accounting principles,
consistently applied throughout the periods involved, and all adjustments
necessary for a fair presentation of the results for such periods have been
made; PROVIDED, HOWEVER, that the interim financial statements contained in the
Registration Statement and Prospectus shall be subject to normal year-end
adjustments in accordance with generally accepted accounting principles.
(e) Arthur Andersen LLP, whose reports are filed with the
Commission as a part of the Registration Statement, are and, during the periods
covered by their reports, were independent public accountants as required by the
Securities Act and the Rules.
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the Commonwealth of
Massachusetts. Collaborative Securities Corporation and Collaborative Genetics,
Inc. are the only subsidiaries of the Company; neither one is actively engaged
in any business, and Collaborative Genetics, Inc. has no assets or liabilities.
The Company has no other subsidiaries and does not control, directly or
indirectly, any corporation, partnership, joint venture, association or
business. The Company is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the character or location of its
assets or properties (owned, leased or licensed) or the nature of its business
makes such qualification necessary except for such jurisdictions where the
failure to so qualify would not have a material adverse effect on the assets or
properties, business, results of operations or financial condition of the
Company. The Company does not own, lease, or license any asset or property nor
conduct any business outside the United States of America. The Company has all
requisite corporate power and authority, and all necessary authorizations,
approvals, consents, orders, licenses, certificates and permits of and from all
governmental or regulatory bodies or any other person or entity, to own, lease
and license its respective assets and properties and conduct its business as now
being conducted and as described in the Registration Statement and the
Prospectus except for such authorizations, approvals, consents, orders, material
licenses, certificates and permits the failure to so obtain would not have a
Material Adverse Effect; no such authorization, approval, consent, order,
license, certificate or permit contains a materially burdensome restriction
other than as disclosed in the Registration Statement and the Prospectus; and
the Company has all such corporate power and authority, and such authorizations,
approvals, consents, orders, licenses, certificates and permits to enter into,
deliver and perform this Agreement and to issue and sell the Shares (except as
may be required under
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state and foreign Blue Sky laws). For purposes of this Agreement, a "Material
Adverse Effect" shall mean a material adverse effect upon the assets or
properties, business, results of operations, prospects, or condition (financial
or otherwise) of the Company.
(g) The Company owns or possesses adequate and enforceable rights
to use all patents, patent applications, trademarks, trademark applications,
trade names, service marks, copyrights, copyright applications, licenses,
know-how, proprietary techniques, including processes and substances, and other
similar rights and proprietary knowledge (collectively, "Intangibles") necessary
for the conduct of its business as described in the Registration Statement and
the Prospectus. The Company has not received any notice of, and to its best
knowledge is not aware of, any infringement of or conflict with asserted rights
of others with respect to any Intangibles which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding, would have a Material
Adverse Effect. The Company has not received any notice of and is not aware of
any infringement of any of the Company's Intangibles by any third party which
could have a Material Adverse Effect.
(h) The Company has good and marketable title to each of the
items of personal property which are reflected in the financial statements
referred to in Section 4(d) or are referred to in the Registration Statement and
the Prospectus as being owned by it and valid and enforceable leasehold
interests in each of the items of real and personal property which are referred
to in the Registration Statement and the Prospectus as being leased by it, in
each case free and clear of all liens, encumbrances, claims, security interests
and defects other than those described in the Registration Statement
(collectively, "Liens"), except to the extent that the failure to have such good
title or the existence of any such Lien does not and will not have a Material
Adverse Effect.
(i) There is no litigation or governmental or other proceeding or
investigation before any court or before or by any public body or board pending
or, to the Company's knowledge, threatened against, or involving the assets,
properties or business of, the Company which, if determined adversely to the
Company, would materially adversely affect the value or the operation of any
such assets or properties or the business, results of operations, prospects or
condition (financial or otherwise) of the Company.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
therein, (i) there has not been any material adverse change in the assets or
properties, business, results of operations, prospects or condition (financial
or otherwise), of the Company, whether or not arising from transactions in the
ordinary course of business; (ii) the Company has not sustained any material
loss or interference with its assets, businesses or properties (whether owned or
leased) from fire, explosion, earthquake, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or any court or legislative
or other governmental action, order or decree; and (iii) since the date of the
latest balance sheet included in the Registration Statement and the Prospectus,
except as reflected in the Registration Statement or the Prospectus, the Company
has not (A) issued any securities or incurred any liability or obligation,
direct or contingent, for
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borrowed money, except such liabilities or obligations incurred in the ordinary
course of business, (B) entered into any transaction not in the ordinary course
of business or (C) declared or paid any dividend or made any distribution on any
shares of its stock or redeemed, purchased or otherwise acquired or agreed to
redeem, purchase or otherwise acquire any shares of its stock.
(k) There is no document or contract of a character required
by the Securities Act or the Rules to be described in the Registration
Statement or Prospectus or to be filed as an exhibit to the Registration
Statement which is not described, filed, or incorporated by reference in the
Registration Statement, as required; and the description of any such
documents or contracts in the Registration Statement or Prospectus is
accurate. Each agreement listed in the exhibits to the Registration Statement
or incorporated by reference which is material to the Company's assets or
properties, business, results of operations, prospects, or condition
(financial or otherwise) is in full force and effect and is valid and
enforceable by and against the Company, as the case may be, in accordance
with its terms, assuming the due authorization, execution and delivery
thereof by each of the other parties thereto. The Company is not, nor, to the
best of the Company's knowledge, is any other party, in default in the
observance or performance of any term or obligation to be performed by it
under any such agreement, and no event has occurred which with notice or
lapse of time or both would constitute such a default, in any such case which
default or event would have a Material Adverse Effect. No default exists, and
no event has occurred which with notice or lapse of time or both would
constitute a default, in the due performance and observance of any term,
covenant, or condition, by the Company of any other agreement or instrument
to which the Company is a party or by which it or its properties or business
may be bound or affected which default or event would have a Material Adverse
Effect.
(l) The Company is not in violation of any term or provision of
its charter or by-laws or of any franchise, license, permit, judgment, decree,
order, statute, rule or regulation, where the consequences of such violation
would have a Material Adverse Effect.
(m) Neither the execution, delivery and performance of this
Agreement by the Company nor the consummation of any of the transactions
contemplated hereby (including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate or accelerate the
due date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which with notice
or lapse of time or both would constitute a default) under, or require any
consent or waiver under, or result in the execution or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company pursuant to
the terms of, any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party or by which it or any of its
properties or businesses is bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation applicable to the Company or violate
any provision of the charter or by-laws of the Company, except to the extent
that the Company has obtained consents or waivers which are in full force and
effect.
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(n) The Company has an authorized and outstanding capital stock
as set forth under the caption "Capitalization" in the Prospectus. All of the
outstanding shares of Common Stock have been duly and validly issued and are
fully paid and nonassessable and none of them was issued in violation of any
preemptive right, right of first refusal or first offer or other similar right.
The Shares, when issued and sold pursuant to this Agreement, will be duly and
validly issued, fully paid and nonassessable and none of them will be issued in
violation of any preemptive or other similar right. Except as disclosed in the
Registration Statement and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and there is no commitment
or binding plan or arrangement to issue, any share of stock of the Company or
any security convertible into, or exercisable or exchangeable for, such stock.
The Common Stock and the Shares conform in all material respects to all
statements in relation thereto contained in the Registration Statement and the
Prospectus.
(o) No holder of any security of the Company has the right to
have any security owned by such holder included in the Registration Statement
(other than Robert J. Hennessey, who has waived such right) or to demand
registration of any security owned by such holder during the period ending 90
days after the date of this Agreement. Each director and executive officer of
the Company (the "Locked-Up Holders") has delivered to the Representatives his
enforceable written lock-up agreement in the form attached to this Agreement
(the "Lock-Up Agreements").
(p) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and performance of
this Agreement and the issuance and sale of the Shares by the Company. This
Agreement has been duly and validly authorized, executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except (i) as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles and (ii) to the extent that rights
to indemnity or contribution under this Agreement may be limited by Federal and
state securities laws or the public policy underlying such laws.
(q) The Company is not involved in any labor dispute nor, to the
knowledge of the Company, is any such dispute threatened, which dispute would
have a material adverse effect on the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of the Company. The
Company is not aware of any threatened or pending litigation between the Company
and any of its executive officers which, if adversely determined, could have a
Material Adverse Effect.
(r) No transaction has occurred between or among the Company and
any of its officers or directors or five percent shareholders or any affiliate
or affiliates of any such officer or director or five percent shareholders that
is required to be described in and is not described in the Registration
Statement and the Prospectus.
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(s) The Company has not taken, nor will it take, directly or
indirectly, any action designed to or which might reasonably be expected to
cause or result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Common Stock to facilitate the sale or resale of any of the Shares.
(t) The Company has filed all Federal, state, local, and foreign
tax returns which are required to be filed by it through the date hereof, or has
received extensions thereof, and has paid all taxes shown on such returns and
all assessments received by it to the extent that the same are material and have
become due. There are no tax audits or, to the Company's knowledge,
investigations pending, which if adversely determined would have a Material
Adverse Effect; nor are there any material proposed additional tax assessments
against the Company.
(u) The Shares have been duly authorized for quotation on Nasdaq
National Market.
(v) The Company has complied with all the requirements and filed
the required forms as specified in Florida Statutes Section 517.075.
(w) To the Company's knowledge based on questionnaires delivered
to the Company, there are no affiliations with the NASD among the Company's
officers, directors or, to the best of the knowledge of the Company, any five
percent or greater stockholder of the Company, except as set forth in the
Registration Statement or otherwise disclosed in writing to the Representatives.
(x) (i) The Company is in compliance in all material respects
with all rules, laws, and regulations relating to the use, treatment, storage,
and disposal of toxic substances and protection of health or the environment
("Environmental Law") which are applicable to its business; (ii) the Company has
not received any notice from any governmental authority or third party of an
asserted claim under Environmental Laws; (iii) the Company has received all
permits, licenses, or other approvals required of them under applicable
Environmental Laws to conduct their business and 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; (iv) to the Company's knowledge, no facts
currently exist that will require the Company to make future material capital
expenditures to comply with Environmental Laws; and (v) to the Company's
knowledge, no property which is or has been owned, leased or occupied by the
Company has been designated as a Superfund site pursuant to the Comprehensive
Environmental Response, Compensation of Liability Act of 1980, as amended (42
U.S.C. Section 9601, et. seq.) or otherwise designated as a contaminated site
under applicable state or local law. The Company has not been named as a
"potentially responsible party" under the CER CLA 1980.
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(y) In the ordinary course of its business, the Company
periodically reviews the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries, in the course of
which the Company 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.
(z) Neither the Company or any other person associated with or
acting on behalf of the Company including, without limitation, any director,
officer, agent or employee of the Company has not, directly or indirectly, while
acting on behalf of the Company (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity; (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds; (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any other unlawful
payment.
(aa) The Company is not and, after giving effect to the offering
and sale of the Shares and the application of proceeds thereof as described in
the Prospectus, will not be an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(bb) The Company maintains 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
difference.
(cc) The Company has not experienced, nor does it expect to
experience, any material disruptions or losses in its business or operations due
to the Year 2000 Problem (that is, any significant risk that computer hardware
or software applications used by the Company did not, in the case of dates or
time periods occurring after December 31, 1999, function at least as effectively
as in the case of dates or time periods occurring prior to January 1, 2000); and
there are no issues related to the impact of the Year 2000 Problem on the
Company's business or operations that are of a character required to be
described or referred to in the Registration Statement or Prospectus.
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5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of
the Underwriters under this Agreement are several and not joint. The respective
obligations of the Underwriters to purchase the Shares are subject to each of
the following terms and conditions:
(a) The Prospectus shall have been timely filed with the
Commission in accordance with Section 6(a)(i) of this Agreement.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no order
suspending the effectiveness of the Registration Statement shall be in effect
and no proceedings for such purpose shall be pending before or threatened by the
Commission, and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to the satisfaction of the
Representatives.
(c) The representations and warranties of the Company contained
in this Agreement and in the certificates delivered pursuant to Section 5(d)
shall be true and correct when made and on and as of each Closing Date as if
made on such date and the Company shall have performed all covenants and
agreements and satisfied all the conditions contained in this Agreement required
to be performed or satisfied by it at or before such Closing Date.
(d) The Representatives shall have received on each Closing Date
a certificate, addressed to the Representatives and dated such Closing Date, of
the chief executive or chief operating officer and the chief financial officer
or chief accounting officer of the Company to the effect that (i) the signers of
such certificate have carefully examined the Registration Statement, the
Prospectus and this Agreement and that the representations and warranties of the
Company in this Agreement are true and correct on and as of such Closing Date
with the same effect as if made on such Closing Date and the Company has
performed all covenants and agreements and satisfied all conditions contained in
this Agreement required to be performed or satisfied by it at or prior to such
Closing Date and (ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and to the best of their knowledge, no
proceedings for that purpose have been instituted or are pending under the
Securities Act.
(e) The Representatives shall have received on the Effective
Date, at the time this Agreement is executed and on each Closing Date a signed
letter from Arthur Andersen LLP addressed to the Representatives and dated,
respectively, the Effective Date, the date of this Agreement and each such
Closing Date, in form and substance reasonably satisfactory to the
Representatives.
(f) The Representatives shall have received on each Closing Date
from Ropes and Gray, counsel for the Company, an opinion, addressed to the
Representatives and dated such Closing Date, in a form reasonably acceptable to
the Representatives.
(g) The Representatives shall have received on each Closing Date
from Hale and Dorr LLP, patent counsel for the Company, an opinion addressed to
the Representatives and dated such Closing Date, to the effect that such counsel
is familiar with the technology used by
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the Company in its business relating to those technology areas handled by
Hale and Dorr and has read the portions of the Registration Statement and the
Prospectus headed: "Risk Factors - Our intellectual property protection may be
inadequate..."; "Risk Factors - Our proprietary position may depend..."; "Risk
Factors -- We may infringe the intellectual property rights..."; "Risk Factors -
We may not be able to obtain..."; "Risk Factors - International patent
protection is uncertain..."; "Business Strategic Alliances" and "Business -
Patents and Proprietary Technology", and that, to the extent that the following
opinions relate to the Company's technology and products as to which such
counsel has knowledge:
(i) such counsel has no knowledge of any facts which
would preclude the Company from having clear title to the Company's patents or
patent applications referenced in the Prospectus. To the best of such counsel's
knowledge, the Company does not lack and will not be unable to obtain any rights
or licenses to use any patent or know-how necessary to conduct the business now
conducted or proposed to be conducted by the Company as described in the
Prospectus, including without limitation the Company's business relating to
technology and products (except with respect to the patents assigned to Schering
Plough as to which such counsel need express no opinion).To our knowledge, we
and the Company have complied with the required duty of candor and good faith in
dealing with the U.S. Patent and Trademark Office (the "Office"), including the
duty to disclose to the Office all information believed to be material to the
patentability of each U.S. patent and pending application. We have no knowledge
of any published patent applications which, if issued in the form published,
would constrain or prohibit the business now conducted or proposed to be
conducted by the Company as described in the prospectus, except as described
therein. We have no knowledge of any facts that would form a basis for the
belief that any of the patents or patent applications owned or licensed by the
Company is unenforceable or invalid. To the best of such counsel's knowledge,
the Company has not received any notice of infringement or of conflict with
asserted rights of others with respect to any patents, patent applications,
trademarks, trademark applications, trade names, service marks, copyrights,
copyright applications, licenses or know-how, proprietary techniques, including
processes and substances, and other similar rights and proprietary knowledge
which could result in any material adverse effect upon the Company. Such counsel
is not aware of any patents of others which are infringed by specific products
or processes of the Company referred to in the Prospectus in such manner as to
materially and adversely affect the Company;
(ii) to the best of such counsel's knowledge, there are
no legal or governmental proceedings pending relating to trade secrets,
trademarks, service marks or other proprietary information or materials of the
Company other than review of or appeal proceedings relating to pending
applications for patents, and to the best of such counsel's knowledge no such
proceedings are threatened or contemplated by governmental authorities or
others;
(iii) such counsel does not know of any material
contracts or other material documents relating to the Company's proprietary
information, other than those filed as exhibits to the Registration Statement;
and
12
(iv) the statements under the captions "Risk Factors -
Our intellectual property protection may be inadequate..."; "Risk Factors - Our
proprietary position may depend..."; "Risk Factors -- We may infringe the
intellectual property rights..."; "Risk Factors - We may not be able to
obtain..."; "Risk Factors - International patent protection is uncertain...";
"Business - Strategic Alliances" and "Business - Patents and Proprietary
Technology", insofar as such statements constitute a summary of documents
referred to therein or matters of law, are accurate summaries and fairly and
correctly present, in all material respects, the information called for with
respect to such documents and matters and such counsel has no reason to believe
that the statements therein are untrue or that there is an omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading; provided, however, that such counsel may rely on
representations of the Company with respect to the factual matters contained in
such statements, provided that such counsel shall state that nothing has come to
the attention of such counsel which leads them to believe that such
representations are not true and correct in all material respects.
(h) All proceedings taken in connection with the sale of the Firm
Shares and the Option Shares as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and their counsel and
the Underwriters shall have received from Palmer & Dodge LLP a favorable
opinion, addressed to the Representatives and dated such Closing Date, with
respect to the Shares, the Registration Statement and the Prospectus, and such
other related matters, as the Representatives may reasonably request, and the
Company shall have furnished to Palmer & Dodge LLP such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
(i) If the Shares have been qualified for sale in Florida, the
Representatives shall have received on each Closing Date certificates, addressed
to the Representatives, and dated such Closing Date, of an executive officer of
the Company, to the effect that the signer of such certificate has reviewed and
understands the provisions of Section 517.075 of the Florida Statues, and
represents that the Company has complied, and at all times will comply, with all
provisions of Section 517.075 and further, that as of such Closing Date, neither
the Company nor any of its affiliates does business with the government of Cuba
or with any person or affiliate located in Cuba.
(j) The Company shall have furnished or caused to be furnished to
the Representatives such further certificates or documents as the
Representatives shall have reasonably requested.
6. COVENANTS OF THE COMPANY.
(a) The Company covenants and agrees as follows:
13
(i) The Company shall prepare the Prospectus in a form
approved by the Representatives and file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of business on
the second business day following the execution and delivery of this Agreement,
or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act.
(ii) The Company shall promptly advise the
Representatives in writing (A) when any amendment to the Registration Statement
shall have become effective, (B) of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or for any additional
information, (C) of the prevention or suspension of the use of any preliminary
prospectus or the Prospectus or of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (D) of the
receipt by the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. The Company shall not file any
amendment of the Registration Statement or supplement to the Prospectus unless
the Company has furnished the Representatives a copy for its review prior to
filing and shall not file any such proposed amendment or supplement to which the
Representatives reasonably object. The Company shall use its best efforts to
prevent the issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(iii) If, at any time when a prospectus relating to the
Shares is required to be delivered under the Securities Act and the Rules, any
event occurs as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall be
necessary to amend or supplement the Prospectus (or to file under the Exchange
Act any document which, upon filing, is incorporated into the Prospectus) to
comply with the Securities Act or the Rules, the Company promptly shall prepare
and file with the Commission, subject to the second sentence of paragraph (ii)
of this Section 6(a), an amendment or supplement (or document) which shall
correct such statement or omission or an amendment which shall effect such
compliance.
(iv) The Company shall make generally available to its
security holders and to the Representatives as soon as practicable, but not
later than 45 days after the end of the 12-month period beginning at the end of
the fiscal quarter of the Company during which the Effective Date occurs (or 90
days if such 12-month period coincides with the Company's fiscal year), an
earnings statement (which need not be audited) of the Company, covering such
12-month period, which shall satisfy the provisions of Section 11(a) of the
Securities Act or Rule 158 of the Rules.
(v) The Company shall furnish to the Representatives
and counsel for the Underwriters, without charge, signed copies of the
Registration Statement (including all exhibits thereto and amendments thereof),
and to each other Underwriter a copy of the Registration Statement (without
including all exhibits thereto and all amendments thereof), and
14
such number of documents incorporated into the Registration Statement (including
all exhibits thereto and amendments thereof) and, so long as delivery of a
prospectus by an underwriter or dealer may be required by the Securities Act or
the Rules, as many copies of any preliminary prospectus and the Prospectus and
any amendments thereof and supplements thereto as the Representatives may
reasonably request.
(vi) The Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify the Shares for offer
and sale under the laws of such jurisdictions as the Representatives may
designate and shall maintain such qualifications in effect so long as required
for the distribution of the Shares; provided, however, that the Company shall
not be required in connection therewith, as a condition thereof, to qualify as a
foreign corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation as doing business in any
jurisdiction.
(vii) For a period of five years after the date of this
Agreement, the Company shall supply to the Representatives and to each other
Underwriter who may so request in writing, copies of such financial statements
and other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock and to
furnish to the Representatives a copy of each annual or other report it shall be
required to file with the Commission.
(viii) Without the prior written consent of CIBC World
Markets Corp., for a period of 90 days after the date of this Agreement, the
Company shall not issue, sell or register with the Commission (other than on
Form S-8 or on any successor form), or otherwise dispose of, directly or
indirectly, any equity securities of the Company (or any securities convertible
into or exercisable or exchangeable for equity securities of the Company),
except for the issuance of (A) the Shares pursuant to the Registration
Statement, (B) shares of the Company's Common Stock pursuant to the Company's
existing stock option plans or equity compensation plans, or (C) shares of
Common Stock or securities convertible into or exercisable or exchangeable for
equity securities of the Company in connection with licensing, research and
development or other collaborative or strategic arrangements, PROVIDED THAT the
transferee of any securities described in this clause (C) delivers to the
Representatives a lock-up agreement of the type and on the terms described in
paragraph 4(o) of this Agreement. In the event that during this period, (i) any
shares are issued pursuant to the Company's existing stock option plan or bonus
plan that are exercisable during such 90 day period (other than shares issued
pursuant to options or other awards outstanding on the date of this Agreement)
or (ii) any registration is effected on Form S-8 or on any successor form
relating to shares that are exercisable during such 90 period, the Company shall
obtain the written agreement of such grantee or purchaser or holder of such
registered securities that, for a period of 90 days after the date of this
Agreement, such person will not, without the prior written consent of CIBC World
Markets Corp., offer for sale, sell, distribute, grant any option for the sale
of, or otherwise dispose of, directly or indirectly, or exercise any
registration rights with respect to, any shares of Common Stock (or any
securities convertible into, exercisable for, or exchangeable for any shares of
Common Stock) owned by such person.
15
(ix) On or before completion of this offering, the
Company shall make all filings required under applicable federal securities laws
and by the Nasdaq National Market (including any required registration under the
Exchange Act).
(x) The Company shall file timely and accurate reports
in accordance with the provisions of Florida Statutes Section 517.075, or any
successor provision, and any regulation promulgated thereunder, if at any time
after the Effective Date, the Company or any of its affiliates commences
engaging in business with the government or any person or affiliate located in
Cuba.
(xi) Without the prior written consent of CIBC World
Markets Corp., for a period of 90 days after the date of this Agreement, the
Company shall not, by amending, terminating or waiving any agreement between the
Locked-Up Holder and the Company described in Section 4(o) or otherwise, permit
any Locked-Up Holder to offer for sale, sell, distribute, grant any option for
the sale of, or otherwise dispose of, directly or indirectly, any Shares of
Common Stock (or any securities convertible into, exercisable for, or
exchangeable for any Shares of Common Stock). Without the prior written consent
of CIBC World Markets Corp., for a period of 90 days after the date of this
Agreement, the Company shall not, by amending, terminating, or waiving any
agreement between bioMerieux Alliance SA ("bioMerieux") and the Company, permit
bioMerieux to offer for sale, sell, distribute, grant any option for the sale
of, or otherwise dispose of, directly or indirectly, any of its shares of Common
Stock.
(xii) The Company will apply the net proceeds from the
offering of the Shares in the manner set forth under "Use of Proceeds" in the
Prospectus.
(b) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all costs and expenses incident to
the public offering of the Shares and the performance of the obligations of the
Company under this Agreement including those relating to: (i) the preparation,
printing, filing and distribution of the Registration Statement including all
exhibits thereto, each preliminary prospectus, the Prospectus, all amendments
and supplements to the Registration Statement and the Prospectus, and the
printing, filing and distribution of this Agreement; (ii) the preparation and
delivery of certificates for the Shares to the Underwriters; (iii) the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred to in Section
6(a)(vi), including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such registration and qualification and the
preparation, distribution and shipment of preliminary and supplementary Blue Sky
memoranda; (iv) the furnishing (including costs of shipping and mailing) to the
Representatives and to the Underwriters of copies of each preliminary
prospectus, the Prospectus and all amendments or supplements to the Prospectus,
and of the several documents required by this Section to be so furnished, as may
be reasonably requested for use in connection with the offering and sale of the
Shares by the Underwriters or by dealers to whom Shares may be sold; (v) the
filing fees of the National Association of Securities Dealers, Inc. in
connection with its
16
review of the terms of the public offering; (vi) the furnishing (including costs
of shipping and mailing) to the Representatives and to the Underwriters of
copies of all reports and information required by Section 6(a)(vii); (vii)
inclusion of the Shares for quotation on the Nasdaq National Market; and (viii)
all transfer taxes, if any, with respect to the sale and delivery of the Shares
by the Company to the Underwriters. Subject to the provisions of Section 9, the
Underwriters agree to pay, whether or not the transactions contemplated hereby
are consummated or this Agreement is terminated, all costs and expenses incident
to the performance of the obligations of the Underwriters under this Agreement
not payable by the Company pursuant to the preceding sentence, including,
without limitation, the fees and disbursements of counsel for the Underwriters.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all losses, claims, damages and liabilities, joint or several
(including any reasonable investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted), to which they, or any of them, may become
subject under the Securities Act, the Exchange Act or other Federal or state law
or regulation, at common law or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto, (or in any document incorporated thereto) or
arise out of or are based upon 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; PROVIDED, HOWEVER, that such indemnity shall
not inure to the benefit of any Underwriter (or any person controlling such
Underwriter) on account of any losses, claims, damages or liabilities arising
from the sale of the Shares to any person by such Underwriter if such untrue
statement or omission or alleged untrue statement or omission was made in such
preliminary prospectus, the Registration Statement or the Prospectus, or such
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by the Representatives on behalf
of any Underwriter specifically for use therein. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
Notwithstanding the foregoing, the Company shall not be liable to any
Underwriter with respect to any preliminary prospectus or any preliminary
prospectus supplement, to the extent that any such loss, claim, damage or
liability of any Underwriter results solely from an untrue statement of a
material fact contained in, or the omission of a material fact from, such
preliminary prospectus, which untrue statement or omission was corrected in the
Prospectus, if the Company shall sustain the burden of proving that (i) the
Underwriter sold Shares to the person alleging such loss, claim, damage or
liability without sending or giving or making available electronically, at or
prior to the written confirmation of such sale, a copy of the Prospectus to such
person, (ii) delivery of a Prospectus was required under the Securities Act, and
(iii) the Company delivered to the Underwriter copies of such Prospectus in such
quantities as it shall have reasonably requested.
17
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act, each director of the Company, and each officer of the
Company who signs the Registration Statement, to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only insofar as
such losses, claims, damages or liabilities arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission
which was made in any preliminary prospectus, the Registration Statement or
the Prospectus, or any amendment thereof or supplement thereto, and which was
furnished by such Underwriter to the Company in writing expressly for use in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or
any amendments or supplements thereto; provided, however, that the obligation
of each Underwriter to indemnify the Company (including any controlling
person, director or officer thereof) shall be limited to the net proceeds
received by the Company from such Underwriter.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section, notify each
such indemnifying party of the commencement of such action, suit or proceeding,
enclosing a copy of all papers served. No indemnification provided for in
Section 7(a) or 7(b) shall be available to any party who shall fail to give
notice as provided in this Section 7(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related and
was prejudiced by the failure to give such notice but the omission so to notify
such indemnifying party of any such action, suit or proceeding shall not relieve
it from any liability that it may have to any indemnified party for contribution
or otherwise than under this Section. In case any such action, suit or
proceeding shall be brought against any indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party shall
be entitled to participate in, and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and the approval by the indemnified
party of such counsel, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses, except as provided below and
except for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The indemnified party
shall have the right to employ its counsel in any such action, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless (i) the employment of counsel by such indemnified party has been
authorized in writing by the indemnifying parties, (ii) the indemnified party
shall have reasonably concluded that there may be a conflict of interest between
the indemnifying parties and the indemnified party in the conduct of the defense
of such action (in which case the indemnifying parties shall not have the right
to direct the defense of such action on behalf of the indemnified party) or
(iii) the indemnifying parties shall not have employed counsel to assume the
defense of such action within a reasonable time after notice of the commencement
thereof, in
18
each of which cases the fees and expenses of counsel shall be at the expense of
the indemnifying parties. An indemnifying party shall not be liable for any
settlement of any action, suit, proceeding or claim effected without its written
consent.
8. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) or 7(b) is due in accordance with its terms but for any reason is
held to be unavailable to or insufficient to hold harmless an indemnified party
under Section 7(a) or 7(b), then each indemnifying party shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses reasonably incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any claims asserted,
but after deducting any contribution received by any person entitled hereunder
to contribution from any person who may be liable for contribution) to which the
indemnified party may be subject 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 from the offering of the Shares or, if such allocation
is not permitted by applicable law or indemnification is not available as a
result of the indemnifying party not having received notice as provided in
Section 7 hereof, in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Underwriters shall be
deemed to be in the same proportion as (x) the total proceeds from the offering
(net of underwriting discounts but before deducting expenses) received by the
Company, as set forth in the table on the cover page of the Prospectus, bear to
(y) the underwriting discounts received by the Underwriters, as set forth in the
table on the cover page of the Prospectus. The relative fault of the Company or
the Underwriters shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact related to
information supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 8
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 which does not
take account of the equitable considerations referred to above. Notwithstanding
the provisions of this Section 8, (i) in no case shall any Underwriter (except
as may be provided in the Agreement Among Underwriters) be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by such Underwriter hereunder, and (ii) the Company shall be liable
and responsible for any amount in excess of such underwriting discount;
provided, however, that no person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person, if any, who
controls an Underwriter within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Exchange Act shall have the same rights to contribution
as such Underwriter, and each person, if any, who controls the Company within
the meaning of the Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, each officer of the
19
Company who shall have signed the Registration Statement and each director of
the Company shall have the same rights to contribution as the Company, subject
in each case to clauses (i) and (ii) in the immediately preceding sentence of
this Section 8. Any party entitled to contribution will, promptly after receipt
of notice of commencement of any action, suit or proceeding against such party
in respect of which a claim for contribution may be made against another party
or parties under this Section, notify such party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
from whom contribution may be sought shall not relieve the party or parties from
whom contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall be liable for
contribution, with respect to any action, suit, proceeding or claim settled
without its written consent. The Underwriters' obligations to contribute
pursuant to this Section 8 are several in proportion to their respective
underwriting commitments and not joint.
9. TERMINATION. This Agreement may be terminated with respect to the
Shares to be purchased on a Closing Date by the Representatives by notifying the
Company at any time
(a) in the absolute discretion of the Representatives at or
before any Closing Date: (i) if on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted the
securities markets in the United States; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other calamity or crisis
the effect of which on the financial markets of the United States is such as
to make it, in the judgment of the Representatives, inadvisable to proceed
with the offering; (iii) if there shall be such a material adverse change in
general financial, political or economic conditions or the effect of
international conditions on the financial markets in the United States is
such as to make it, in the judgment of the Representatives, inadvisable or
impracticable to market the Shares; (iv) if trading in the Shares has been
suspended by the Commission or trading generally on the New York Stock
Exchange, Inc., on the American Stock Exchange, Inc. or on the Nasdaq
National Market has been suspended or limited, or minimum or maximum ranges
for prices for securities shall have been fixed, or maximum ranges for prices
for securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or any
other governmental or regulatory authority; or (v) if a banking moratorium
has been declared by any state or Federal authority; or
(b) at or before any Closing Date, that any of the conditions
specified in Section 5 shall not have been fulfilled when and as required by
this Agreement.
If this Agreement is terminated pursuant to any of its provisions, the
Company shall not be under any liability to any Underwriter except as set forth
in Section 6(b), and no Underwriter shall be under any liability to the Company,
except that no Underwriter who shall have failed or refused to purchase the
Shares agreed to be purchased by it under this Agreement, without some reason
sufficient hereunder to justify cancellation or termination of its obligations
under this Agreement, shall be relieved of liability to the Company or to the
other Underwriters for damages occasioned by its failure or refusal.
20
10. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters
shall fail (other than for a reason sufficient to justify the cancellation or
termination of this Agreement under Section 9) to purchase on any Closing Date
the Shares agreed to be purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute underwriters
to purchase such Shares or make such other arrangements as the Representatives
may deem advisable or one or more of the remaining Underwriters may agree to
purchase such Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this Agreement. If no
such arrangements have been made by the close of business on the business day
following such Closing Date,
(a) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall not exceed 10% of the Shares that all
the Underwriters are obligated to purchase on such Closing Date, then each of
the nondefaulting Underwriters shall be obligated to purchase such Shares on the
terms herein set forth in proportion to their respective obligations hereunder;
provided, that in no event shall the maximum number of Shares that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 10 by more than one-ninth of such number of Shares without the
written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, then the Company
shall be entitled to an additional business day within which it may, but is not
obligated to, find one or more substitute underwriters reasonably satisfactory
to the Representatives to purchase such Shares upon the terms set forth in this
Agreement.
In any such case, either the Representatives or the Company shall have
the right to postpone the applicable Closing Date for a period of not more than
seven business days in order that necessary changes and arrangements (including
any necessary amendments or supplements to the Registration Statement or
Prospectus) may be effected by the Representatives and the Company. If the
number of Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that all the
Underwriters are obligated to purchase on such Closing Date, and none of the
nondefaulting Underwriters or the Company shall make arrangements pursuant to
this Section within the period stated for the purchase of the Shares that the
defaulting Underwriters agreed to purchase, this Agreement shall terminate with
respect to the Shares to be purchased on such Closing Date without liability on
the part of any nondefaulting Underwriter to the Company and without liability
on the part of the Company, except in both cases as provided in Sections 6(b),
7, 8 and 9. The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or to the nondefaulting
Underwriters arising out of such default. A substitute underwriter hereunder
shall become an Underwriter for all purposes of this Agreement.
11. MISCELLANEOUS. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriters set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any
21
investigation made by or on behalf of any Underwriter or the Company or any
of the officers, directors or controlling persons referred to in Sections 7
and 8 hereof, and shall survive delivery of and payment for the Shares. The
provisions of Sections 6(b), 7, 8 and 9 shall survive the termination or
cancellation of this Agreement.
This Agreement has been and is made for the benefit of the Underwriters
and the Company and their respective successors and assigns, and, to the extent
expressed herein, for the benefit of persons controlling any of the
Underwriters, or the Company, and directors and officers of the Company, and
their respective successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser of Shares from any Underwriter merely
because of such purchase.
All notices and communications hereunder shall be in writing and mailed
or delivered or by telephone or telegraph if subsequently confirmed in writing,
(a) if to the Representatives, c/o CIBC World Markets Corp., World Financial
Center, New York, New York 10281 Attention: Peter J. Crowley, and (b) if to the
Company, to its agent for service as such agent's address appears on the cover
page of the Registration Statement.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of conflict of
laws.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
GENOME THERAPEUTICS CORP.
By:
-----------------------------
Name: Robert J. Hennessey
Title: Chief Executive Officer
22
Confirmed:
CIBC WORLD MARKETS CORP.
WARBURG DILLON READ LLC
DAIN RAUSCHER INCORPORATED
TUCKER ANTHONY INCORPORATED
By: CIBC World Markets Corp., acting on
its own behalf, on behalf of the
Representatives and on behalf of the
several Underwriters named in
Schedule I annexed hereto
By:
----------------------------------
Name: Peter J. Crowley
Title: Managing Director and
Head of Health Care
23
SCHEDULE I
NAME NUMBER OF FIRM SHARES
---- TO BE PURCHASED
---------------------
CIBC World Markets Corp.
Warburg Dillon Read LLC
Dain Rauscher Incorporated
Tucker Anthony Incorporated
TOTAL
24
FORM OF LOCK-UP AGREEMENT
March __, 2000
CIBC World Markets Corp.
As Representatives of the
Several Underwriters
c/o CIBC World Markets Corp.
One World Financial Center
New York, NY 10281
Ladies and Gentlemen:
The undersigned is a shareholder of Genome Therapeutics Corp. (the
"Company") and wishes to facilitate the public offering (the "Offering") of
Common Stock of the Company ("Common Stock") pursuant to a Registration
Statement (the "Registration Statement") to be transmitted for filing with the
Securities and Exchange Commission on or about March 15, 2000.
In consideration of the foregoing, and in order to induce you to act as
underwriters in the Offering, the undersigned hereby irrevocably agrees that it
will not, directly or indirectly, sell, offer, contract to sell, transfer the
economic risk of ownership in, make any short sale, pledge or otherwise dispose
of any Common Stock or any securities convertible into or exchangeable or
exercisable for or any other rights to purchase or acquire Common Stock, whether
now owned or hereinafter acquired by the undersigned or with respect to which
the undersigned has the power of disposition or beneficial ownership, without
the prior written consent of CIBC World Markets Corp. acting alone, for a period
commencing on the date of the execution hereof until the expiration of 90 days
after the date of the final prospectus relating to the Offering.
The undersigned hereby waives any rights of the undersigned to sell
Common Stock or any other security issued by the Company pursuant to the
Registration Statement, and acknowledges and agrees that for a period commencing
on the date of execution hereof until the expiration of 90 days after the date
of the final prospectus relating to the Offering the undersigned has no right to
require the Company to register under the Securities Act of 1933, as amended,
such Common Stock or other securities issued by the Company and beneficially
owned by the undersigned. The foregoing sentence shall not apply to transactions
relating to shares of Common Stock or other securities acquired in open market
transactions after the completion of the Offering.
Notwithstanding the foregoing (i) gifts and tranfers by will or
intestacy or (ii) transfers to (A) the undersigned's members, partners,
affiliates or immediate family or (B) a trust, the beneficiaries of which are
the undersigned and/or members of the undersigned's immediate family, shall not
be prohibited by this agreement; provided, that the donee or transferee agrees
in writing to be bound by the foregoing in the same manner as it applies to the
undersigned. "Immediate family" shall mean spouse, lineal descendants, father,
mother, brother or sister of the transferor and father, mother, brother or
sister of the transferor's spouse and lineal descendants of any of the
foregoing.
The undersigned understands that the agreements of the undersigned are
irrevocable and shall be binding upon the undersigned's heirs, legal
representatives, successors and assigns. The undersigned agrees and consents to
the entry of stop transfer instruments with the Company's transfer agent against
the transfer of Common Stock or other securities of the Company held by the
undersigned except in compliance with this agreement.
This agreement shall automatically terminate in the event that the
Underwriting Agreement relating to the Offering is not entered into by May 15,
2000.
Very truly yours,
-----------------------------------------
(FOR ENTITY PRINT NAME)
By:
--------------------------------------
(SIGNATURE)
Name:
------------------------------------
(PRINT NAME OF SIGNER)
Title:
-----------------------------------
(PRINT TITLE OF SIGNING FOR ENTITY)