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EXHIBIT 1
2,000,000 Shares
GENOME THERAPEUTICS CORP.
Common Stock
UNDERWRITING AGREEMENT
_______ __, 1996
Xxxxxxxxxxx & Co., Inc.
Xxxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Genome Therapeutics Corp., a Massachusetts corporation (the "Company"),
proposes to sell to you (the "Underwriter") an aggregate of 2,000,000 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 Underwriter an option
to purchase up to an additional 300,000 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."
The Company also proposes to issue to the Underwriter the warrants
referred to in Section 1(c) to purchase a number of shares of Common Stock equal
to six and one-half percent (6.5%) of the total number of Shares purchased by
the Underwriter hereunder.
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 the Underwriter, and the
Underwriter agrees to purchase from the Company, at $_____ per share
(the "Initial Price"), an aggregate of 2,000,000 Firm Shares.
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(b) The Company grants to the Underwriter an option to purchase
all or any part of the Option Shares at the Initial Price. Such option
may be exercised only to cover over-allotments in the sales of the Firm
Shares by the Underwriter and may be exercised in whole or in part at
any time on or before 12:00 noon, New York City 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 or telegraphic notice, or verbal or telephonic
notice confirmed by written or telegraphic notice, by the Underwriter
to the Company no later than 12:00 noon, New York City 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.
(c) On the Firm Shares Closing Date and, in the event the option
with respect to the Option Shares is exercised, on the Option Shares
Closing Date, the Company agrees to issue to the Underwriter warrants
(the "Warrants") to purchase the number of shares of Common Stock equal
to six and one-half percent (6.5%) of the number of Firm Shares or
Option Shares purchased by the Underwriter on such Firm Shares Closing
Date or Option Shares Closing Date, as the case may be (the "Warrant
Shares") at a price per Warrant Share equal to $.10. The Warrants will
be exercisable at any time and from time to time on or after the first
anniversary of the Firm Shares Closing Date up to the third anniversary
thereof. Each Warrant shall be substantially identical to the form of
Warrant filed as an exhibit to the Registration Statement (as defined
below).
2. Delivery and Payment. Delivery by the Company of the Firm Shares
to the Underwriter, and payment of the purchase price by certified or official
bank check or checks payable in New York Clearing House (next day) funds to the
Company, shall take place at the offices of Ropes & Xxxx, Xxx Xxxxxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, 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 Underwriter (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
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Underwriter and payment of the purchase price by certified or official bank
check or checks payable in New York Clearing House (next day) funds to the
Company shall take place at the offices of Xxxx and Xxxx 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."
Certificates evidencing the Shares shall be registered in such names
and shall be in such denominations as the Underwriter 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 Underwriter for checking and packaging,
at such place as is designated by the Underwriter, 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. 33-_____), 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), of the related
preliminary prospectus, and of all documents incorporated by reference therein
that were filed with the Commission on or prior to the date of this Agreement
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. The
Registration Statement as amended at the time and on the date it becomes
effective (the "Effective Date"), including all exhibits and information, if
any, deemed to be part of the Registration Statement pursuant to Rule 424(b) and
Rule 430A of the Rules, is called the "Registration Statement." The term
"Prospectus" means the prospectus in the form first used to confirm sales of the
Shares (whether such prospectus was included in the Registration Statement at
the time of effectiveness or was subsequently filed with the Commission pursuant
to Rule 424(b) of the Rules). Any reference in this Agreement to the
Registration Statement or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein (and the exhibits to such
incorporated documents) pursuant
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to Item 12 of Form S-3 under the Act, as of the date of the Registration
Statement or the Prospectus, as the case may be, and any reference to any
amendment or supplement to the Registration Statement or the Prospectus shall be
deemed to refer to and include any documents filed after such date under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which, upon
filing, are incorporated by reference therein, as required by paragraph (b) of
Item 12 of Form S-3. As used herein, the term "Incorporated Documents" means the
documents which at the time are incorporated by reference in the Registration
Statement, the Prospectus, or any amendment or supplement thereto.
The Company understands that the Underwriter proposes 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 Underwriter deems
advisable. The Company hereby confirms that the Underwriter has been authorized
to distribute or cause to be distributed each preliminary prospectus and is
authorized to distribute the Prospectus (as from time to time amended or
supplemented if the Company furnishes amendments or supplements thereto to the
Underwriter).
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Underwriter as follows:
(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 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
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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, the
Company makes no representation or warranty as to the last paragraph on
the cover page of the Prospectus and the paragraphs with respect to
stabilization and passive market making on the inside front cover page
of the Prospectus. The Company acknowledges that the statements
referred to in the previous sentence constitute the only information
furnished in writing by the Underwriter specifically for inclusion in
the Registration Statement, any preliminary prospectus or the
Prospectus.
(b) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was
filed, when such amendment was filed), complied, in all material
respects, with the applicable provisions of the Exchange Act and the
rules and regulations of the Commission thereunder, any further
Incorporated Documents when filed will comply, in all material
respects, with the applicable provisions of the Exchange Act and the
rules and regulations of the Commission thereunder; no such
Incorporated Document when it was filed (or, if an amendment with
respect to any such document was filed, when such amendment was filed)
contained an untrue statement of a material fact or omitted to state
any material fact required to be stated therein or necessary in order
to make the statements therein not misleading; and no such further
Incorporated Document, when it is filed, will contain an 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.
(c) All contracts and other documents required to be filed as
exhibits to the Registration Statement or to any of the Incorporated
Documents have been filed with the Commission as exhibits to the
Registration Statement or to the applicable Incorporated Document, as
the case may be.
(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
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stockholders' equity and the other information purported to be shown
therein of the Company and its subsidiaries at the respective dates and
for the respective periods to which they apply; and such financial
statements 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) Xxxxxx Xxxxxxxx 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, Inc. and Collaborative
Genetics, Inc. are the only subsidiaries of the Company, neither one of
which has any assets or liabilities or is actively engaged in any
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. Except as
disclosed in the Registration Statement and the Prospectus, the Company
does not own, lease or license any asset or property or 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 assets and properties
and conduct its businesses 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 upon the assets or properties, business,
results of operations, prospects or condition (financial or otherwise)
of the Company; no such authorization, approval, consent, order,
license, certificate or permit contains a materially
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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 state and foreign Blue Sky laws). To the Company's
knowledge, all of the properties now or formerly owned or leased by the
Company or any subsidiary, all research and manufacturing operations
conducted thereon (including discharges and emissions therefrom) and
all research and manufacturing equipment now or formerly used at said
properties, have been and are in compliance with all Federal, state,
local and foreign statutes, ordinances, regulations, rules and
standards concerning or relating to industrial hygiene and the
protection of health, safety, welfare and the environment
(collectively, "the Environmental Laws"), except to the extent that any
failure to be in compliance, singly or in the aggregate, would not have
a material adverse effect upon the assets or properties, business,
results of operations, prospects or condition (financial or otherwise)
of the Company. The Company has not received notice, and does not have
knowledge, of any claim, demand, investigation, regulatory action,
suit or other action instituted or threatened against it or said
property relating to any of the Environmental Laws.
(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 does not
have any knowledge 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 upon the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company. The Company is not aware of
any infringement of any of the Company's Intangibles by any third party
which could have a material adverse effect upon the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
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(h) The Company has good 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 and the Prospectus and those which do not
and will not have a material adverse effect upon the assets or
properties, business, results of operations or financial condition of
the Company.
(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) and 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
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.
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(k) There is no document or contract of a character required to be
described in the Registration Statement or Prospectus or to be filed as
an exhibit to the Registration Statement or any Incorporated Document
which is not described or filed as required. Each agreement listed in
the exhibits to the Registration Statement 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 in
accordance with its terms, assuming the due authorization, execution
and delivery thereof by each of the other parties thereto. Neither the
Company, nor, to the Company's knowledge, any other party is 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 on the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of the
Company. 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 on
the assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company.
(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 on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(m) Neither the execution, delivery and performance of this
Agreement and the Warrants 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 and the Warrants)
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
(which consent or waiver has not been previously obtained), or
require any consent or waiver under, or result in the execution or
imposition of any lien, charge or
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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 for such consents or waivers which have already
been obtained and are in full force and effect.
(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 or other similar right. The Company has
reserved and kept available for the exercise of the Warrants such
number of authorized but unissued shares as are sufficient to permit
the exercise in full of the Warrants. The Shares, when issued and sold
pursuant to this Agreement, and the Warrant Shares, when issued and
sold pursuant to the Warrants, 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, 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, the Shares and the
Warrants 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 or, except as described below, to demand registration of any
security owned by such holder during the period ending 180 days after
the date of this Agreement. Each director and executive officer of the
Company, and each of Biotechnology Value Fund, L.P., Investment 10
L.L.C., Biotech I Investment L.L.C., Biotech 2 Investment L.L.C., Four
Partners L.P., Xxxxxx Xxxxx (Biotechnology Value Fund, L.P., Investment
10 L.L.C., Biotech 1 Investment L.L.C., Biotech 2 Investment, L.L.C.,
Four Partners, L.P. and Xxxxxx Xxxxx are referred to collectively
herein as "BVF"), Xxxxx Xxxxxxxxxxx, Xxxxxx X. Xxxxxxxxxxx and Xxxxxxx
X. Xxxxxxxxxxx (such directors, executive officers and other
stockholders beneficially own,
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in the aggregate, 6,131,329 shares of Common Stock) has delivered to
the Underwriter his or its enforceable written agreement that he or it
will not, for a period of 120 days after the date of this Agreement,
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 him or it, without the prior written
consent of the Underwriter (other than an aggregate of 400,000 shares
held by BVF that may be sold during such period and a total of 65,000
shares held by Xx. Xxxxx Xxxxxxxx, a director of the Company, which may
be transferred to one or more irrevocable charitable trusts (which will
have the right to sell such shares during such period)).
(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 Warrants and the issuance and sale of the
Shares, the Warrants and the Warrant Shares by the Company. This
Agreement has been, and the Warrants, when paid for on the Firm Shares
Closing Date or the Option Shares Closing Date, as the case may be,
will be, duly and validly authorized, executed and delivered by the
Company and constitute and will constitute legal, valid and binding
obligations of the Company enforceable against the Company in
accordance with their respective terms, except (A) 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 (B) 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.
(r) No transaction has occurred between or among the Company and
any of its officers or directors or any affiliate or affiliates of any
such officer or director 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.
(u) The Shares have been duly authorized for quotation on Nasdaq
National Market.
(v) The Company has complied with all of the requirements and
filed the required forms as specified in Florida Statutes Section
517.075.
5. Conditions of the Underwriter's Obligations. The obligation of the
Underwriter 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)(a) 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 Underwriter.
(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.
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(d) The Underwriter shall have received on each Closing Date a
certificate, addressed to the Underwriter 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 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.
(e) The Underwriter shall have received on the Effective Date, at
the time this Agreement is executed and on each Closing Date a signed
letter from Xxxxxx Xxxxxxxx LLP addressed to the Underwriter and dated,
respectively, the Effective Date, the date of this Agreement and each
such Closing Date, in form and substance reasonably satisfactory to the
Underwriter.
(f) The Underwriter shall have received on each Closing Date from
Ropes & Xxxx, counsel for the Company, an opinion, addressed to the
Underwriter and dated such Closing Date, and stating in effect that:
(i) The Company has been duly organized and is validly
existing as a corporation in good standing with the Secretary of
State under the laws of the Commonwealth of Massachusetts. The
Company is duly qualified and in good standing as a foreign
corporation in each jurisdiction in which the Company owns or
leases real property.
(ii) The Company has all requisite corporate power and
authority to own, lease and license its assets and properties and
conduct its business as described in the Registration Statement
and the Prospectus; and the Company has all requisite corporate
power and authority to execute, deliver and perform this
Agreement and the Warrants and to issue and sell the Shares and
the Warrant Shares other than those required under state and
foreign Blue Sky laws.
(iii) The authorized and issued capital stock of the Company
is as set forth in the Registration Statement and the Prospectus,
except for issuances and forfeitures subsequent to the date of the
information
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provided in the Registration Statement and Prospectus pursuant to
employee stock plans and/or option or warrant agreements
referred to in the Prospectus; the certificates evidencing the
Shares are in due and proper legal form under Massachusetts law
and have been duly authorized for issuance by the Company; all of
the outstanding shares of Common Stock of the Company (including
the Series B Restricted Stock) have been duly and validly
authorized and have been duly and validly issued and are fully
paid and nonassessable and none of them was issued in violation of
any statutory preemptive right or other similar right contained in
the Company's charter or by-laws or, to such counsel's knowledge,
any agreement to which the Company is a party. The Warrant Shares
have been duly authorized and reserved by the Company. The Shares
when issued and sold pursuant to this Agreement and the Warrant
Shares, when issued and sold pursuant to the Warrants, will be
duly and validly issued, outstanding, fully paid and nonassessable
and none of them will have been issued in violation of any
statutory preemptive right or other similar right contained in the
Company's charter or by-laws or, to such counsel's knowledge, any
agreement to which the Company is a party. To such counsel's
knowledge, 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 no commitment, plan or
arrangement to issue, any share of stock of the Company or any
security convertible into, exercisable for, or exchangeable for
stock of the Company. The Common Stock, the Shares and the
Warrants conform in all material respects to the descriptions
thereof contained in the Registration Statement and the Prospectus
or in any Incorporated Document.
(iv) To such counsel's knowledge, no holder of any security
of the Company has the right to have any security owned by such
holder included in the Registration Statement or, except as
described in the Registration Statement, to demand registration of
any security during the period ending 120 days after the Effective
Date.
(v) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of this Agreement, the execution, delivery and
performance of the Warrants and the issuance and sale of the
Shares, the Warrants and the Warrant Shares. This Agreement has
been duly and validly authorized, executed and delivered by the
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Company. The Warrants will have been duly and validly executed and
delivered by the Company when paid for on the Firm Shares Closing
Date or the Option Shares Closing Date, as the case may be, and
when so executed and delivered will constitute the legal, valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms except (A) as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and by
general equitable principles and (B) to the extent that rights to
indemnity and contribution under such Warrants may be limited by
Federal or state securities laws or the public policy underlying
such laws.
(vi) Neither the execution, delivery and performance of this
Agreement and the Warrants 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 and
the Warrants) 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 any event which with notice or lapse of time, or both, would
constitute a default) under, or require consent or waiver (which
consent or waiver has not previously been obtained) 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 agreement or instrument listed as an exhibit
to the Registration Statement or violate any judgment, decree,
order, statute, rule or regulation known to such counsel or
violate any provision of the charter or by-laws of the Company.
(vii) No consent, approval, authorization, license,
certificate, permit or order of any court or governmental agency
or body is required for the execution, delivery or performance of
this Agreement or the Warrants by the Company or the consummation
of the transactions contemplated hereby or thereby, including
without limitation the sale of the Shares and Warrant Shares,
except such as have been obtained under the Securities Act and
such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of the Shares by the
Underwriter.
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(viii) To such counsel's knowledge, 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
threatened against, or involving the assets, properties or
businesses of, the Company which, if determined adversely to the
Company, would have a material adverse effect upon the assets or
properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company.
(ix) The statements in the Prospectus under the caption "Risk
Factors - Shares Eligible for Future Sale and Registration Rights"
relating to registration rights granted by the Company, the
statements in the Prospectus under the caption "Business -
Collaborative Agreements - Pharmaceutical Company Collaborations",
the statements in the Prospectus under the caption "Business -
Collaborative Agreements - Government Collaborations" relating to
the Company's Genome Sequencing Center grant, the statements in
the Prospectus under the captions "Risk Factors - Patents and
Proprietary Rights; Risk of Third Party Claims of Infringement"
and "Business - Patents and Proprietary Technology" relating to
the Company's license from Harvard College and the Company's
Genome Sequencing Center grant, insofar as such statements, taken
as a whole, constitute a summary of documents referred to therein
or matters of law, are fair summaries in all material respects
with respect to such documents. To such counsel's knowledge, all
contracts and other documents required to be filed as exhibits to
the Registration Statement or any Incorporated Document have been
so filed with the Commission.
(x) The statements in the Prospectus under the captions
"Business - Collaborative Agreements - Government Collaborations",
"Business - Patents and Proprietary Technology" and "Risk Factors
- Patents and Proprietary Rights; Risk of Third Party Claims of
Infringement" relating to the provisions of the government grants
and contracts listed in the table appearing under the caption
"Business - Collaborative Agreements - Government Collaborations"
concerning the ownership of intellectual property and the
description of the Company's Capital Stock incorporated by
reference to the Company's Form 10, as amended, insofar as such
statements, taken as a whole, constitute a summary of documents
referred to therein or matters of law, are fair summaries in all
material respects with respect to such documents and matters.
(xi) The Registration Statement, all preliminary prospectuses
and the Prospectus and each amendment or supplement thereto
(except for the financial statements and schedules and other
financial and statistical data included therein, as to which such
counsel need not
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express an opinion) comply as to form in all material respects
with the requirements of the Securities Act and the Rules, and the
Incorporated Documents (except for the financial statements and
schedules, and other financial and statistical data included
therein, as to which such counsel need not express an opinion),
when they were filed with the Commission complied as to form in
all material respects with the requirements of the Exchange Act
and the rules and regulations of the Commission thereunder.
(xii) The Registration Statement has become effective under
the Securities Act, and, after due inquiry of the staff of the
Commission, such counsel does not know of the issuance of any
stop order suspending the effectiveness of the Registration
Statement or of the institution of any proceedings for that
purpose and, to such counsel's knowledge, no such proceedings are
threatened or pending.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel satisfactory to the
Underwriter as to matters which are governed by laws other than the laws of the
Commonwealth of Massachusetts and the Federal laws of the United States;
provided that such counsel shall state that in their opinion the Underwriter and
they are justified in relying on such other opinions. Copies of such
certificates and other opinions shall be furnished to the Underwriter and
counsel for the Underwriter.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the Underwriter and representatives of the
independent certified public accountants of the Company, at which conferences
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus (except as
specified in the foregoing opinion), on the basis of the foregoing, such counsel
has no reason to believe that the Registration Statement at the time it became
effective (except with respect to the financial statements and notes and
schedules thereto and other financial data, as to which such counsel need
express no belief) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements and notes and
schedules thereto and other financial data, as to which such counsel need make
no statement) on the date thereof contained
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any untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(g) The Underwriter shall have received on each Closing Date from
Lahive & Xxxxxxxxx, patent counsel for the Company, an opinion addressed to the
Underwriter and dated such Closing Date (which opinion will not extend to the
patents and patent applications licensed by the Company from Harvard College
referenced in the Prospectus), to the effect that such counsel is familiar with
the technology used by the Company in its business and has read the portions of
the Registration Statement and the Prospectus headed: "Risk Factors - Patents
and Proprietary Rights; Risk of Third Party Claims of Infringement" and
"Business - Patents and Proprietary Technology" (collectively, the "Technology
Portion"), such counsel consents to being named as an "Expert" in the
Registration Statement, and;
(i) such counsel has no knowledge of any facts which would
preclude the Company from having clear title to the Company's patent
applications referenced in the Technology Portion. To 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. To 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 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 processes of the
Company referred to in the Prospectus in such manner as to materially
and adversely affect the Company.
(ii) to such counsel's knowledge, there are no legal or
governmental proceedings pending relating to trade secrets or other
proprietary information or materials of the Company, other than review
of pending applications for patents, and to such counsel's knowledge no
such proceedings are threatened or contemplated by governmental
authorities or others; and
(iii) the statements under the captions "Risk Factors - Patents
and Proprietary Rights; Risk of Third Party Claims of Infringement" and
"Business - Patents and Proprietary Technology", insofar as such
statements constitute a summary of documents referred to therein or
matters of law (other than the statements therein concerning the
Company's
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government contracts and grants, as to which such counsel need not
express an opinion), are accurate summaries and fairly and correctly
present, in all material respects, the information called for with
respect to such documents and matters; provided, however, that such
counsel may rely on representations of the Company with respect to the
factual matters contained in such statements, and 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 Underwriter and its counsel and the
Underwriter shall have received from Xxxx and Xxxx a favorable opinion,
addressed to the Underwriter and dated such Closing Date, with respect to the
Shares, the Registration Statement and the Prospectus, and such other related
matters, as the Underwriter may reasonably request, and the Company shall have
furnished to Xxxx and Xxxx such documents as they may reasonably request for the
purpose of enabling them to pass upon such matters.
(i) The Underwriter shall have received on each Closing Date a
certificate, addressed to the Underwriter, 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 Statutes, 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.
6. Covenants of the Company. (A) The Company covenants and agrees as
follows:
(a) The Company shall prepare the Prospectus in a form approved by
the Underwriter 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, and shall promptly advise the
Underwriter (i) when any amendment to the Registration Statement shall
have become effective, (ii) of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or for any
additional information, (iii) of the prevention or suspension
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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 (iv) 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 or any document that upon filing becomes
an Incorporated Document unless the Company has furnished the
Underwriter a copy for its review prior to filing and shall not file
any such proposed amendment or supplement or document to which the
Underwriter reasonably objects. 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.
(b) 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, becomes an Incorporated Document) 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 (a) 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.
(c) The Company shall make generally available to its security
holders and to the Underwriter 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 earning 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.
(d) The Company shall furnish to the Underwriter and counsel for
the Underwriter, without charge, signed copies of the Registration
Statement (including all exhibits thereto and amendments thereof), such
number of Incorporated Documents (including all exhibits thereto
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and amendments thereof) as the Underwriter may request 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 Underwriter may reasonably request.
(e) The Company shall cooperate with the Underwriter and its
counsel in endeavoring to qualify the Shares for offer and sale under
the laws of such jurisdictions as the Underwriter 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.
(f) For a period of five years after the date of this Agreement,
the Company shall supply to the Underwriter, upon request, 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 Underwriter, upon
request, a copy of each annual or other report it shall be required to
file with the Commission (including the Report on Form SR required by
Rule 463 of the Rules).
(g) Without the prior written consent of the Underwriter, for a
period of 180 days after the date of this Agreement, the Company shall
not issue, sell or register with the Commission for its own account
(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 the
Shares pursuant to the Registration Statement, the issuance of the
Warrants pursuant to this Agreement, the issuance of securities
pursuant to the employee stock plans or otherwise to employees,
directors or consultants, and/or option or warrant agreements described
in the Prospectus and the issuance of securities in connection with a
licensing arrangement, a research and development collaboration or a
similar agreement with a pharmaceutical or biotechnology company or
other strategic partner.
(h) On or before completion of this offering, the Company shall
make all filings required under applicable securities laws and by the
Nasdaq National Market (including any required registration under the
Exchange Act).
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(B) The Company agrees to pay, or reimburse if paid by the
Underwriter, 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, the Incorporated
Documents, 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 and the Warrants to
the Underwriter; (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)(e), including the reasonable fees and disbursements
of counsel for the Underwriter (which shall not be included in determining the
dollar amount limitation in clause (ix) below) 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 Underwriter 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 Underwriter; (v) the filing fees of the National Association of
Securities Dealers, Inc. in connection with its review of the terms of the
public offering; (vi) the furnishing (including costs of shipping and mailing)
to the Underwriter of copies of all reports and information required by Section
6(A)(f); (vii) inclusion of the Shares for quotation on the Nasdaq National
Market; (viii) all transfer taxes, if any, with respect to the sale and delivery
of the Shares by the Company to the Underwriter; and (ix) all reasonable
out-of-pocket fees and expenses of the Underwriter in connection with the
transaction contemplated hereunder, including, but not limited to, the fees (up
to $75,000) and disbursements of counsel for the Underwriter. Subject to the
provisions of Section 9, the Underwriter agrees 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 Underwriter under this Agreement not payable by the Company
pursuant to the preceding sentence.
7. Indemnification.
(a) The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act against any
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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 Incorporated Document), 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 the 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 the 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, in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriter
specifically for use therein; and provided further, that the Company
shall not be liable to the Underwriter with respect to any preliminary
prospectus or any preliminary prospectus supplement, to the extent that
any such loss, claim, damage or liability of the 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. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) The Underwriter agrees 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
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Company, and each officer of the Company who signs the Registration
Statement, to the same extent as the foregoing indemnity from the
Company to the 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, contained
in the last paragraph of the cover page of the Prospectus and in the
paragraphs relating to stabilization and passive market making on the
inside front cover page of the Prospectus; provided, however, that the
obligation of the 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 the 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
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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 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.
(d) The Underwriter confirms that the statements with respect to
the public offering of the Shares by the Underwriter contained in the
last paragraph of the cover page of the Prospectus and in the
paragraphs relating to stabilization and passive market making on the
inside front cover page of the Prospectus are correct.
8. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for in
Section 7(a) is due in accordance with its terms but for any reason is held to
be unavailable from the Company, the Company and the Underwriter 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 the
Company from any person other than the Underwriter, such as persons who control
the Company within the meaning of the Securities Act, officers of the Company
who signed the Registration Statement and directors of the Company, who may also
be liable for contribution) to which the Company and the Underwriter may be
subject in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriter 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 Underwriter
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses,
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as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Underwriter 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 Underwriter, as set forth in the table on the cover
page of the Prospectus. The relative fault of the Company or the Underwriter
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 Underwriter and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 8 were determined by pro rata
allocation 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 the Underwriter be liable or responsible
for any amount in excess of the underwriting discount applicable to the Shares
purchased by the 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 the 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 the 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 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.
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9. Termination. This Agreement may be terminated with respect to the
Shares to be purchased on a Closing Date by the Underwriter by notifying the
Company at any time
(a) in the absolute discretion of the Underwriter 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 Underwriter,
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 Underwriter, 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 the Underwriter, and the Underwriter
shall not be under any liability to the Company, except as provided in the first
paragraph of Section 10 of this Agreement.
10. Miscellaneous. The respective agreements, representations,
warranties, indemnities and other statements of the Company or its officers and
of the Underwriter set forth in or made pursuant to this Agreement shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the 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.
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This Agreement has been and is made for the benefit of the Underwriter
and the Company and their respective successors and assigns, and, to the extent
expressed herein, for the benefit of persons controlling the Underwriter, 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 the 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 Underwriter, to it at Xxxxxxxxxxx Xxxxx, Xxxxx Xxxxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 Attention: Xxxxx X. Xxxxxxx, 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: Xxxxxx X. Xxxxxxxxx
Title: President
Confirmed:
XXXXXXXXXXX & CO., INC.
By:
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Managing Director
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