Conformed Copy
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT is dated as of the 18th day of May, 2000 by
and among Transkaryotic Therapies, Inc., a Delaware corporation with its
principal office at 000 Xxxxxx Xxxxxx, Xxxxxxxxx, XX 00000 (the "Company"), and
the several purchasers named in the attached EXHIBIT A (individually, a
"Purchaser" and collectively, the "Purchasers").
WHEREAS, the Company desires to issue and sell to the Purchasers pursuant
to this Agreement shares (the "Shares") of its Series A Convertible Preferred
Stock, which Shares are, or will be upon issuance, convertible into authorized
but unissued shares of common stock, $.01 par value per share, of the Company
(the "Common Stock"); and
WHEREAS, the Purchasers, severally, wish to purchase the Shares on the
terms and subject to the conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual agreements, representations,
warranties and covenants herein contained, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms shall have
the following respective meanings:
(a) "Affiliate" of a party means any corporation or other business entity
controlled by, controlling or under common control with such party. For this
purpose "control" shall mean direct or indirect beneficial ownership of fifty
percent (50%) or more of the voting or income interest in such corporation or
other business entity.
(b) "Disclosure Documents" means the Company's Annual Report on Form 10-K
for its fiscal year ended December 31, 1999, the Company's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2000, the Company's Proxy Statement
for its Annual Meeting of Stockholders on June 15, 2000, the Company's Current
Report on Form 8-K filed on April 28, 2000 together in each case with any
documents incorporated by reference therein, and any disclosure schedule
delivered by the Company to the Purchasers simultaneously with the execution of
this Agreement.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and all of the rules and regulations promulgated thereunder.
(d) "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
(e) "Initial Closing Date" shall mean the date of the Initial Closing.
(f) "Registration Rights Agreement" shall mean that certain Registration
Rights Agreement, among the Company and the Purchasers, in the form of EXHIBIT C
attached hereto.
(g) "SEC" shall mean the Securities and Exchange Commission.
(h) "Second Closing Date" shall mean the date of the Second Closing.
(i) "Securities Act" shall mean the Securities Act of 1933, as amended, and
all of the rules and regulations promulgated thereunder.
(j) "Warburg" shall refer collectively to all of the Purchasers.
2. Authorization, Purchase and Sale of Shares.
2.1 Authorization of Series A Preferred Stock. The Company has, or before
the Initial Closing Date will have, authorized and created a series of its
preferred stock consisting of 10,000 shares, par value $0.01 per share,
designated as its "Series A Convertible Preferred Stock" (the "Series A
Preferred Stock"). The terms, limitations and relative rights and preferences of
the Series A Preferred Stock are set forth in the Certificate of Designation,
Number, Voting Powers, Preferences and Rights of the Series A Convertible
Preferred Stock of the Company, which has been filed or will be filed before the
Initial Closing Date with the Secretary of State of the State of Delaware and a
copy of which is attached hereto as EXHIBIT B (the "Certificate of
Designation").
2.2 Purchase and Sale. Subject to and upon the terms and conditions set
forth in this Agreement, the Company agrees to issue and sell to each Purchaser,
and each Purchaser, severally, hereby agrees to purchase from the Company, at
the Closings, the number of shares of Series A Preferred Stock set forth
opposite the name of such Purchaser under the heading "Number of Shares to be
Purchased" on EXHIBIT A hereto with respect to each applicable Closing, at a
purchase price of $10,000 per share (the "Purchase Price"). The total purchase
price payable by each Purchaser for the number of shares of Series A Preferred
Stock that such Purchaser is hereby agreeing to purchase at each Closing is set
forth opposite the name of such Purchaser under the heading "Initial Closing
Purchase Price" and "Second Closing Purchase Price", respectively, on EXHIBIT A
hereto. The aggregate purchase price payable by the Purchasers to the Company
for all of the Shares shall be $100 million.
2.3 Closing.
(a) The initial closing (the "Initial Closing"), which shall involve the
sale and purchase of 9,000 Shares under this Agreement, shall take place at the
offices of Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx on the
third business day after the waiting period (and any extension thereof) under
the HSR Act applicable to the purchase of the Shares shall have expired or been
terminated. At the Initial Closing, the Company shall deliver to each of the
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Purchasers a certificate for the number of Shares being purchased at the Initial
Closing by such Purchaser, registered in the name of such Purchaser, against
payment to the Company of the purchase price therefor set forth opposite the
name of such Purchaser on EXHIBIT A, under the caption "Initial Closing Purchase
Price," by wire transfer to the Company.
(b) The second closing (the "Second Closing"), which shall involve the sale
and purchase of 1,000 Shares under this Agreement, shall take place at the
offices of Xxxx and Xxxx LLP, 00 Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx on the
third business day following the later of (x) the expiration of the waiting
period (and any extension thereof) under the HSR Act or (y) the meeting of
stockholders of the Company at which the increase in authorized Common Stock of
the Company contemplated by Section 3.2(b) shall have occurred. At the Second
Closing, the Company shall deliver to each of the Purchasers a certificate for
the number of Shares being purchased at the Second Closing by such Purchaser,
registered in the name of such Purchaser, against payment to the Company of the
purchase price therefor set forth opposite the name of such Purchaser on EXHIBIT
A, under the caption "Second Closing Purchase Price," by wire transfer to the
Company.
(c) The Initial Closing and the Second Closing are collectively referred to
as the "Closings". If the Initial Closing Date does not occur on or before July
31, 2000, this Agreement shall automatically terminate and be of no further
force and effect; provided, however, that such termination shall not release any
party from liability for any breach of this Agreement by such party that occurs
prior to such termination. The obligations of the parties to effect the
transactions to be effected at the Second Closing shall terminate if the Second
Closing does not occur on or before December 31, 2000; provided, however, that
such termination shall not release any party from liability for any breach of
this Agreement by such party that occurs prior to such termination.
3. Representations and Warranties of the Company. Except as set forth in
the Disclosure Documents, the Company hereby represents and warrants to each of
the Purchasers as follows.
3.1 Incorporation. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is
qualified to do business in each jurisdiction in which the character of its
properties or the nature of its business requires such qualification, except
where the failure to so qualify would not have a material adverse effect upon
the Company. The Company has all requisite corporate power and authority to
carry on its business as now conducted. The Company has no subsidiaries.
3.2 Capitalization.
(a) As of the date of this Agreement, the authorized capital stock of the
Company consists of 30,000,000 shares of Common Stock and 10,000,000 shares of
Preferred Stock, par value $0.01 per share. As of the date of this Agreement,
there are no shares of Preferred Stock issued and outstanding. The number of
outstanding shares of Common Stock as of March 31, 2000 is as set forth in the
Disclosure Documents. Except for the issuance of shares
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of Common Stock pursuant to the exercise of outstanding options granted pursuant
to the Company's option plans, including such options granted after March 31,
2000, the Company has not issued any capital stock since March 31, 2000 except
as described in or contemplated by the Disclosure Documents and this Agreement.
Except as set forth in or contemplated by the Disclosure Documents and this
Agreement, and except for the issuance of options to purchase shares of the
Company's Common Stock pursuant to the Company's option plans, there are no
existing options, warrants, calls, preemptive (or similar) rights, subscriptions
or other rights, agreements, arrangements or commitments of any character
obligating the Company to issue, transfer or sell, or cause to be issued,
transferred or sold, any shares of the capital stock of the Company or other
equity interests in the Company or any securities convertible into or
exchangeable for such shares of capital stock or other equity interests, and
there are no outstanding contractual obligations of the Company to repurchase,
redeem or otherwise acquire any shares of its capital stock or other equity
interests.
(b) Prior to the Initial Closing Date, the Company will have filed the
Certificate of Designation with the Secretary of State of the State of Delaware
designating 10,000 shares of its preferred stock as Series A Preferred Stock
and, after such filing, the Company's authorized preferred stock will include
such Series A Preferred Stock. Prior to the Second Closing Date, subject to
approval thereof by the Company's stockholders, the Company will have filed an
amendment to its Amended and Restated Certificate of Incorporation authorizing
an additional 70,000,000 shares of Common Stock (the "Common Stock Charter
Amendment") with the Secretary of State of the State of Delaware and will have
issued the 9,000 Shares to be issued at the Initial Closing.
3.3 Authorization. Except for approval of the Common Stock Charter
Amendment by the Company's Stockholders and the filing of such amendment with
the Secretary of the State of Delaware, all corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization of the Series A Preferred Stock and the Common Stock Charter
Amendment and the filing of the Certificate of Designation, the authorization,
execution, delivery and performance of this Agreement and the Registration
Rights Agreement and the consummation of the transactions contemplated herein
and therein has been taken. When executed and delivered by the Company, each of
this Agreement and the Registration Rights Agreement shall constitute the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as rights to indemnity and contribution may be
limited by state or federal securities laws or the public policy underlying such
laws, and except as may be limited by bankruptcy, insolvency, reorganization or
other laws affecting creditors' rights generally and by general equitable
principles. The Company has all requisite corporate power to enter into this
Agreement and the Registration Rights Agreement and to carry out and perform its
obligations under the terms of this Agreement and the Registration Rights
Agreement. The Board of Directors of the Company has taken all action necessary
to render inapplicable, as it relates to the Purchasers, the provisions of
Section 203 of the General Corporation Law of Delaware. At or prior to the
Initial Closing, the Company will have reserved for issuance the shares of
Common Stock initially issuable upon conversion of the Series A Preferred Stock
to be issued at the Initial Closing. Subject to the approval by its stockholders
of the Common Stock Charter Amendment and the filing of such amendment with
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the Secretary of State of the State of Delaware, the Company will have reserved
for issuance the shares of Common Stock initially issuable upon conversion of
the Series A Preferred Stock to be issued at the Second Closing.
3.4 Valid Issuance of the Shares. The Shares being purchased by the
Purchasers hereunder will, upon issuance pursuant to the terms hereof, be duly
authorized and validly issued, fully paid and non-assessable shares of Series A
Preferred Stock, free of preemptive or similar rights. Upon their issuance in
accordance with the terms of the Series A Preferred Stock, the shares of Common
Stock issuable upon conversion of the Shares will be duly authorized, validly
issued, fully paid and non-assessable shares of Common Stock, free of all
preemptive or similar rights.
3.5 Financial Statements. The financial statements of the Company included
in the Disclosure Documents present fairly, in all material respects, the
consolidated financial condition of the Company, results of operations and cash
flows as of the dates and for the periods indicated. Such financial statements
are fairly presented, in all material respects, in accordance with generally
accepted accounting principles (except in the case of quarterly financial
statements for the absence of footnote disclosure and subject, in the case of
interim periods, to normal year-end adjustments which, individually, and in the
aggregate, will not be material). Since March 31, 2000, the Company has not
incurred any material liabilities or obligations, direct or contingent, other
than in the ordinary course of business, and there has been no material adverse
change (actual or, to the Company's knowledge, threatened) in the assets,
liabilities (contingent or other), affairs, operations, prospects or condition
(financial or other) of the Company, other than the continued incurrence of
losses in the ordinary course of business.
3.6 Disclosure Documents. The information contained or incorporated by
reference in the Disclosure Documents was true and correct in all material
respects as of the respective dates of the filing thereof with the SEC; and, as
of such respective dates, the Disclosure Documents did not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.7 Consents. All consents, approvals, orders and authorizations required
on the part of the Company in connection with the execution, delivery or
performance of this Agreement and the Registration Rights Agreement and the
consummation of the transactions contemplated herein and therein, other than the
(i) expiration of the applicable HSR Act waiting period, (ii) the appropriate
notification to the Nasdaq National Market, (iii) stockholder approval of the
Common Stock Charter Amendment and the filing of such amendment with the
Secretary of State of the State of Delaware and (iv) the filing of the
Certificate of Designation with the Secretary of State of the State of Delaware,
have been obtained and will be effective as of the Initial Closing Date, other
than such filings required to be made after each Closing under applicable
federal and state securities laws.
3.8 No Conflict. The execution and delivery of this Agreement and the
Registration Rights Agreement by the Company and the consummation of the
transactions
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contemplated hereby and thereby will not conflict with or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or acceleration of
any obligation or to a loss of a material benefit under (i) any provision of the
Certificate of Incorporation or By-laws of the Company or (ii) any agreement or
instrument, permit, franchise, license, judgment, order, statute, law,
ordinance, rule or regulations, applicable to the Company or its properties or
assets.
3.9 Brokers or Finders. The Company has not incurred, and shall not incur,
directly or indirectly, any liability for any brokerage or finders' fees or
agents commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
3.10 Nasdaq National Market. The Common Stock is listed on the Nasdaq
National Market System, and there are no proceedings to revoke or suspend such
listing.
3.11 Absence of Litigation. Except as set forth in the Disclosure
Documents, there is no action, suit or proceeding or, to the Company's
knowledge, any investigation, pending, or to the Company's knowledge, threatened
by or before any governmental body against the Company and in which an
unfavorable outcome, ruling or finding in any said matter, or for all matters
taken as a whole, would reasonably be expected to have a material adverse effect
on the Company. The foregoing includes, without limitation, any such action,
suit, proceeding or investigation that questions this Agreement or the
Registration Rights Agreement or the right of the Company to execute, deliver
and perform under same.
4. Representations and Warranties of the Purchasers. Each Purchaser
severally for itself, and not jointly with the other Purchasers, represents and
warrants to the Company as follows:
4.1 Authorization. All action on the part of such Purchaser necessary for
the authorization, execution, delivery and performance of this Agreement and the
Registration Rights Agreement and the consummation of the transactions
contemplated herein and therein has been taken. Each of this Agreement and the
Registration Rights Agreement constitutes the legal, valid and binding
obligation of such Purchaser, enforceable against such Purchaser in accordance
with its terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally and by
general equitable principles. Such Purchaser has all requisite power to enter
into each of this Agreement and the Registration Rights Agreement and to carry
out and perform its obligations under the terms of this Agreement and the
Registration Rights Agreement.
4.2 Purchase Entirely for Own Account, Etc. Such Purchaser is acquiring the
Shares for its own account, and not with a view to, or for sale in connection
with, any distribution of the Shares in violation of the Securities Act. Except
as contemplated by this Agreement, such Purchaser has no present agreement,
undertaking, arrangement, obligation or commitment providing for the disposition
of the Shares. Such Purchaser is a partnership that has not been organized,
reorganized or recapitalized specifically for the purpose of investing in the
Shares or any shares of Common Stock issuable upon conversion of the Shares.
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4.3 Investor Status; Etc. Such Purchaser certifies and represents to the
Company that at the time such Purchaser acquires any of the Shares, such
Purchaser will be an "accredited investor" as defined in Rule 501 of Regulation
D promulgated under the Securities Act. Such Purchaser's financial condition is
such that it is able to bear the risk of holding the Shares for an indefinite
period of time and the risk of loss of its entire investment. Such Purchaser has
been afforded the opportunity to ask questions of and receive answers from the
management of the Company concerning this investment and has sufficient
knowledge and experience in investing in companies similar to the Company in
terms of the Company's stage of development so as to be able to evaluate the
risks and merits of its investment in the Company.
4.4 Shares Not Registered. Such Purchaser understands that the Shares (and
any shares of Common Stock issuable upon conversion of the Shares) have not been
registered under the Securities Act, by reason of their issuance by the Company
in a transaction exempt from the registration requirements of the Securities
Act, and that the Shares (and any shares of Common Stock issuable upon
conversion of the Shares) must continue to be held by such Purchaser unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from such registration. The Purchaser understands that the exemptions
from registration afforded by Rule 144 (the provisions of which are known to it)
promulgated under the Securities Act depend on the satisfaction of various
conditions, and that, if applicable, Rule 144 may afford the basis for sales
only in limited amounts.
4.5 No Conflict. The execution and delivery of this Agreement and the
Registration Rights Agreement by such Purchaser and the consummation of the
transactions contemplated hereby and thereby will not conflict with or result in
any violation of or default by such Purchaser (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit under (i) any
provision of the organizational documents of such Purchaser or (ii) any
agreement or instrument, permit, franchise, license, judgment, order, statute,
law, ordinance, rule or regulations, applicable to such Purchaser or its
respective properties or assets.
4.6 Brokers. Such Purchaser has not retained, utilized or been represented
by any broker or finder in connection with the transactions contemplated by this
Agreement.
4.7 Consents. All consents, approvals, orders and authorizations required
on the part of such Purchaser in connection with the execution, delivery or
performance of this Agreement and the consummation of the transactions
contemplated herein, other than the expiration of the applicable HSR Act waiting
period, have been obtained and will be effective as of the Closing Date.
5. Covenants.
5.1. HSR Act Filing. The Company and the Purchasers shall, as soon as
practicable after the date of this Agreement, file Notification and Report Forms
under the HSR Act with the Federal Trade Commission (the "FTC") and the
Antitrust Division of the
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Department of Justice (the "Antitrust Division") relating to the transaction
contemplated by this Agreement and shall use their reasonable efforts to respond
as promptly as practicable to all inquiries received from the FTC or the
Antitrust Division for additional information or documentation.
5.2 Board Nominees. The Company will nominate, recommend the election by
the Company's stockholders and use its best efforts to effect the election as
directors of (a) two (2) individuals designated by Warburg, acceptable to the
Company's Board of Directors acting in good faith, for so long as Warburg owns
beneficially (within the meaning of Rule 13d-3 under the Exchange Act) at least
20% of the outstanding shares of Common Stock (including as outstanding for this
purpose shares of Common Stock issuable upon conversion of the Series A
Preferred Stock), and (b) one (1) individual designated by Warburg, acceptable
to the Company's Board of Directors acting in good faith, for so long as Warburg
owns beneficially (within the meaning of such Rule 13d-3) at least (i) 10% of
the outstanding shares of Common Stock (including as outstanding for this
purpose shares of Common Stock issuable upon conversion of the Series A
Preferred Stock) or (ii) 90% of the Shares purchased pursuant to this Agreement
(or shares of Common Stock issuable upon conversion of such Shares). Any
director elected by the holders of the Series A Preferred Stock shall be deemed
to be a director satisfying the requirements of this Section 5.2. Any vacancy
created by the death, disability, retirement or removal of any such individual
shall be filled by an individual similarly designated by Warburg and acceptable
to the Company's Board of Directors acting in good faith.
5.3 Standstill. Each of the Purchasers and Warburg, Xxxxxx & Co., the sole
general partner of each of the Purchasers ("WP"), hereby agree that, for a
period of five years from the date of this Agreement, neither WP, the Purchasers
nor any Affiliate or others with whom WP is acting in concert will, directly or
indirectly, and WP will not, for its own account, without the prior written
consent of the Board:
(a) acquire or agree to acquire, publicly offer, or make any public
proposal with respect to the possible acquisition of (A) beneficial ownership
(within the meaning of Rule 13d-3 under the Exchange Act) of any securities of
the Company in excess of the thirty percent (30%) of the then outstanding shares
of Common Stock (including as outstanding for this purpose shares of Common
Stock issuable upon conversion of the Series A Preferred Stock), (B) any Company
business or any substantial part of the Company's assets, or any subsidiary or
division thereof or successor to the Company, or (C) any rights or options to
acquire any of the foregoing from any Person;
(b) make, or in any way participate, directly or indirectly, in any
"solicitation" of "proxies" to vote (as such terms are used in the rules under
the Exchange Act), or seek to advise or influence any person or entity with
respect to the voting of any voting securities of the Company;
(c) make any public announcement with respect to any transaction or
proposed or contemplated transaction between the Company or any of its security
holders and the Purchasers or WP, including, without limitation, any tender or
exchange offer, merger or other business combination or acquisition of a
material portion of the assets of the Company;
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(d) publicly propose or publicly disclose an intent to propose any form of
business combination, acquisition, restructuring, recapitalization or other
similar transaction relating to the Company;
(e) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to the Company in connection
with any of matters referred to in clauses (a)-(d) above;
(f) publicly disclose any intention, plan or arrangement inconsistent with
the foregoing;
(g) publicly request the Company, directly or indirectly, to amend or waive
any provisions of this Section 5.3; or
(h) take any action which would be reasonably likely to require the Company
to make a public announcement regarding a possible transaction involving the
Company.
Notwithstanding the foregoing, (i) the provisions of this Section 5.3 shall not
limit or restrict any designees of Warburg who are members of the Company's
Board of Directors pursuant to Section 5.2 from taking any actions in their
capacities as such members of the Company's Board of Directors, and (iii) this
Section 5.3 shall not affect the Company's obligations under Section 5.2.
5.4 Covenant Pending Each Closing. Between the date of this Agreement and
the date of each Closing, the Company will promptly advise the Purchasers of any
action or event of which it becomes aware which has the effect of making
incorrect any of the Company's representations or warranties or which has the
effect of rendering any of the Company's covenants incapable of performance.
5.5 Reasonable Efforts. All of the parties to this Agreement shall use
commercially reasonable efforts to cause the conditions to each Closing to be
satisfied as promptly as reasonably practicable. In this connection, the Company
shall seek confirmation from the NASDAQ National Market that the voting
provisions of the Series A Preferred Stock are consistent with its qualification
requirements; provided, however, that if such voting provisions would adversely
affect the continued listing of the Company's Common Stock on the NASDAQ
National Market, the parties shall agree in good faith to an appropriate
modification of such provisions to eliminate such adverse effect.
6. Conditions Precedent.
6.1. Conditions to the Obligation of the Purchasers to Consummate each
Closing. The obligation of each Purchaser to consummate the transactions to be
consummated at a Closing and to purchase and pay for the Shares being purchased
by it at such Closing pursuant to this Agreement is subject to the satisfaction
of the following conditions precedent:
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(a) The representations and warranties contained herein of the Company
shall be true and correct on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date (it being understood and
agreed by each Purchaser that, in the case of any representation and warranty of
the Company contained herein (i) which is not hereinabove qualified by
application thereto of a materiality standard, such representation and warranty
need be true and correct only in all material respects in order to satisfy as to
such representation or warranty the condition precedent set forth in the
foregoing provisions of this Section 6.1 (a) or (ii) which is made as of a
specific date, such representation and warranty need be true and correct only as
of such specific date in order to satisfy as to such representation and warranty
the condition precedent set forth in the foregoing provisions of this Section
6.1(a)), provided, however, .that the occurrence of any event or circumstance
specified on Schedule 6.1(a) hereto between the date hereof and the applicable
Closing Date shall not be deemed to result in any representation or warranty in
this Agreement being untrue or incorrect on and as of such Closing Date.
(b) The Company shall have performed in all material respects all
obligations and conditions herein required to be performed or observed by the
Company on or prior to such Closing Date.
(c) The Purchasers shall have received a certificate, dated such Closing
Date, signed by each of the President and the Chief Financial Officer of the
Company, certifying on behalf of the Company, that the conditions specified in
the foregoing Sections 6.1(a) and (b) have been fulfilled.
(d) The Registration Rights Agreement shall have been executed and
delivered by the Company.
(e) The purchase of and payment for the Shares by the Purchasers shall not
be prohibited or enjoined by any law or governmental or court order or
regulation.
(f) The Purchasers shall have received from the Company's counsel, Xxxx and
Xxxx LLP, an opinion substantially in the form of EXHIBIT D hereto.
(g) All instruments and corporate proceedings in connection with the
transactions contemplated by this Agreement to be consummated at such Closing
shall be reasonably satisfactory in form and substance to the Purchasers and
their counsel, Xxxxxxx Xxxx & Xxxxxxxxx, and the Purchasers and their counsel
shall have received copies (executed or certified, as may be appropriate) of all
documents which the Purchasers or their counsel may have reasonably requested in
connection with such transactions.
(h) The waiting period under the HSR Act shall have expired or been
terminated.
(i) The Certificate of Designation shall have been filed by the Company
with the Secretary of State of the State of Delaware.
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(j) In the case of the Second Closing, the Common Stock Charter Amendment
shall have been approved by the Company's stockholders and filed by the Company
with the Secretary of State of the State of Delaware.
(k) The Company shall have filed an Additional Listing Application with the
Nasdaq National Market for the shares of Common Stock to be issued upon
conversion of the Shares purchased at such Closing.
6.2. Conditions to the Obligation of the Company to Consummate each
Closing. The obligation of the Company to consummate the transactions to be
consummated at a Closing and to issue and sell to each of the Purchasers the
Shares to be purchased by it at such Closing pursuant to this Agreement is
subject to the satisfaction of the following conditions precedent:
(a) The representations and warranties contained herein of such Purchaser
shall be true and correct on and as of such Closing Date with the same force and
effect as though made on and as of such Closing Date (it being understood and
agreed by the Company that, in the case of any representation and warranty of
each Purchaser contained herein which is not hereinabove qualified by
application thereto of a materiality standard, such representation and warranty
need be true and correct only in all material respects in order to satisfy as to
such representation or warranty the condition precedent set forth in the
foregoing provisions of this Section 6.2(a)).
(b) The Registration Rights Agreement shall have been executed and
delivered by each Purchaser.
(c) The Purchasers shall have performed in all material respects all
obligations and conditions herein required to be performed or observed by the
Purchasers on or prior to such Closing Date.
(d) The sale of the Shares by the Company shall not be prohibited or
enjoined by any law or governmental or court order or regulation.
(e) Each of the other Purchasers shall have purchased, in accordance with
this Agreement, the number of shares of Series A Preferred Stock set forth
opposite its name with respect to such Closing under the heading "Number of
Shares to be Purchased" as set forth on Exhibit A hereto.
(f) All instruments and corporate proceedings in connection with the
transactions contemplated by this Agreement to be consummated at such Closing
shall be reasonably satisfactory in form and substance to the Company, and the
Company shall have received counterpart originals, or certified or other copies
of all documents, including without limitation records of corporate or other
proceedings, which it may have reasonably requested in connection therewith.
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(g) The waiting period under the Xxxxx-Xxxxx-Xxxxxx Act shall have expired
or been terminated.
(h) The Certificate of Designation shall have been filed by the Company
with the Secretary of State of the State of Delaware.
(i) In the case of the Second Closing, the Common Stock Charter Amendment
shall have been approved by the Company's stockholders and filed by the Company
with the Secretary of State of the State of Delaware.
(j) The Company shall have filed an Additional Listing Application with the
Nasdaq National Market for the shares of Common Stock to be issued upon
conversion of the Shares purchased at such Closing.
7. Transfer, Legends.
7.1. Securities Law Transfer Restrictions. No Purchaser shall sell, assign,
pledge, transfer or otherwise dispose or encumber any of the Shares being
purchased by it hereunder or any shares of Common Stock issuable upon conversion
of the Shares, except (i) pursuant to an effective registration statement under
the Securities Act or (ii) pursuant to an available exemption from registration
under the Securities Act and applicable state securities laws and, if requested
by the Company, upon delivery by such Purchaser of an opinion of counsel
reasonably satisfactory to the Company to the effect that the proposed transfer
is exempt from registration under the Securities Act and applicable state
securities laws. Any transfer or purported transfer of the Shares or underlying
shares of Common Stock in violation of this Section 7.1 shall be voidable by the
Company. The Company shall not register any transfer of the Shares or underlying
shares of Common Stock in violation of this Section 7.1. The Company may, and
may instruct any transfer agent for the Company, to place such stop transfer
orders as may be required on the transfer books of the Company in order to
ensure compliance with the provisions of this Section 7.1.
7.2. Legends. Each certificate representing any of the Shares, and each
certificate representing any shares of Common Stock issuable upon conversion of
the Shares, shall be endorsed with the legends set forth below, and each
Purchaser covenants that, except to the extent such restrictions are waived by
the Company, it shall not transfer the shares represented by any such
certificate without complying with the restrictions on transfer described in
this Agreement and the legends endorsed on such certificate:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SAID ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION
UNDER SAID ACT AND, IF REQUESTED BY THE COMPANY, UPON DELIVERY OF AN OPINION OF
12
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED TRANSFER IS
EXEMPT FROM SAID ACT."
8. Miscellaneous Provisions.
8.1 Public Statements or Releases. None of the Purchasers shall make,
issue, or release any announcement, whether to the public generally, or to any
of its suppliers or customers, with respect to this Agreement or the
transactions provided for herein, or make any statement or acknowledgment of the
existence of, or reveal the status of, this Agreement or the transactions
provided for herein, without the prior consent of the other parties, which shall
not be unreasonably withheld or delayed, provided that nothing in this Section
8.1 shall prevent any of the parties hereto from making such public
announcements as it may consider necessary in order to satisfy its legal
obligations, but to the extent not inconsistent with such obligations, it shall
provide the other parties with an opportunity to review and comment on any
proposed public announcement before it is made.
8.2 Further Assurances. Each party agrees to cooperate fully with the other
party and to execute such further instruments, documents and agreements and to
give such further written assurances, as may be reasonably requested by the
other party to better evidence and reflect the transactions described herein and
contemplated hereby, and to carry into effect the intents and purposes of this
Agreement.
8.3 Rights Cumulative. Each and all of the various rights, powers and
remedies of the parties shall be considered to be cumulative with and in
addition to any other rights, powers and remedies which such parties may have at
law or in equity in the event of the breach of any of the terms of this
Agreement. The exercise or partial exercise of any right, power or remedy shall
neither constitute the exclusive election thereof nor the waiver of any other
right, power or remedy available to such party.
8.4 Pronouns. All pronouns or any variation thereof shall be deemed to
refer to the masculine, feminine or neuter, singular or plural, as the identity
of the person, persons, entity or entities may require.
8.5 Notices.
(a) Any notices, reports or other correspondence (hereinafter collectively
referred to as "correspondence") required or permitted to be given hereunder
shall be sent by postage prepaid first class mail, courier or fax or delivered
by hand to the party to whom such correspondence is required or permitted to be
given hereunder. The date of giving any notice shall be the date of its actual
receipt.
(b) All correspondence to the Company shall be addressed as follows:
Xxxxxx X. Xxxxxxx, Vice President--
Finance and Chief Financial Officer
13
Transkaryotic Therapies, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
With a copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxx and Xxxx, LLP
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
(c) All correspondence to any Purchaser shall be sent to such Purchaser at
the address set forth in EXHIBIT B.
(d) Any entity may change the address to which correspondence to it is to
be addressed by notification as provided for herein.
8.6 Captions. The captions and paragraph headings of this Agreement are
solely for the convenience of reference and shall not affect its interpretation.
8.7 Severability. Should any part or provision of this Agreement be held
unenforceable or in conflict with the applicable laws or regulations of any
jurisdiction, the invalid or unenforceable part or provisions shall be replaced
with a provision which accomplishes, to the extent possible, the original
business purpose of such part or provision in a valid and enforceable manner,
and the remainder of this Agreement shall remain binding upon the parties
hereto.
8.8 Governing Law; Injunctive Relief.
(a) This Agreement shall be governed by and construed in accordance with
the internal and substantive laws of Delaware and without regard to any
conflicts of laws concepts which would apply the substantive law of some other
jurisdiction.
(b) Each of the parties hereto acknowledges and agrees that damages will
not be an adequate remedy for any material breach or violation of this Agreement
if such material breach or violation would cause immediate and irreparable harm
(an "Irreparable Breach"). Accordingly, in the event of a threatened or ongoing
Irreparable Breach, each party hereto shall be entitled to seek, in any state or
federal court in Delaware, equitable relief of a kind appropriate in light of
the nature of the ongoing or threatened Irreparable Breach, which relief may
include, without limitation, specific performance or injunctive relief;
provided, however, that if the party bringing such action is unsuccessful in
obtaining the relief sought, the moving party shall pay the non-moving party's
reasonable costs, including attorney's fees, incurred in connection with
defending such action. Such remedies shall not be the parties' exclusive
remedies, but shall be in addition to all other remedies provided in this
Agreement.
14
8.9 Waiver. No waiver of any term, provision or condition of this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or be construed as, a further or continuing waiver of any such
term, provision or condition or as a waiver of any other term, provision or
condition of this Agreement.
8.10 Expenses. The Company shall pay the reasonable fees and expenses of
Warburg incurred in connection with its due diligence related to its investment
in the Shares and in connection with the negotiation, preparation, execution and
delivery of this Agreement, the Registration Rights Agreement and the other
instruments and agreements entered into pursuant to this Agreement, and any
amendments to the same, up to an aggregate amount of $125,000, said payment to
be made no later than 30 days after a xxxx for such fees and expenses has been
sent by Warburg to the Company.
8.11 Assignment. The rights and obligations of the parties hereto shall
inure to the benefit of and shall be binding upon the authorized successors and
permitted assigns of each party. Neither party may assign its rights or
obligations under this Agreement or designate another person (i) to perform all
or part of its obligations under this Agreement or (ii) to have all or part of
its rights and benefits under this Agreement, in each case without the prior
written consent of the other party. In the event of any assignment in accordance
with the terms of this Agreement, the assignee shall specifically assume and be
bound by the provisions of the Agreement by executing and agreeing to an
assumption agreement reasonably acceptable to the other party.
8.12 Survival. The respective representations and warranties given by the
parties hereto, and the other covenants and agreements contained herein (other
than the covenants and agreements in Sections 5.2 and 5.3 of this Agreement,
which shall survive without limitation), shall survive the Closings and the
consummation of the transactions contemplated herein for a period of two years,
without regard to any investigation made by any party.
8.13 Entire Agreement. This Agreement and the Registration Rights Agreement
together constitute the entire agreement between the parties hereto respecting
the subject matter hereof and supersede all prior agreements, negotiations,
understandings, representations and statements respecting the subject matter
hereof, whether written or oral. No modification, alteration, waiver or change
in any of the terms of this Agreement shall be valid or binding upon the parties
hereto unless made in writing and duly executed by the Company and the
Purchasers beneficially holding in the aggregate at least a majority of the
Common Stock of the Company issued or issuable upon the conversion of the
Shares.
[Remainder of page intentionally left blank.]
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement under
seal as of the day and year first above written.
TRANSKARYOTIC THERAPIES, INC.
By: /s/ XXXXXX X. XXXXXXX
------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: VP, Finance; Chief Financial
Officer
WARBURG, XXXXXX EQUITY PARTNERS, L.P.
By: WARBURG, XXXXXX & CO.,
General Partner
By: /s/ XXXXXXXX XXXX
------------------------------
Name: Xxxxxxxx Xxxx
Title: Partner
WARBURG, XXXXXX NETHERLANDS EQUITY PARTNERS I, C.V.
By: WARBURG, XXXXXX & CO.,
General Partner
By: /s/ XXXXXXXX XXXX
------------------------------
Name: Xxxxxxxx Xxxx
Title: Partner
WARBURG, XXXXXX NETHERLANDS EQUITY PARTNERS II, C.V.
By: WARBURG, XXXXXX & CO.,
General Partner
By: /s/ XXXXXXXX XXXX
------------------------------
Name: Xxxxxxxx Xxxx
Title: Partner
WARBURG, XXXXXX NETHERLANDS EQUITY PARTNERS III, C.V.
By: WARBURG, XXXXXX & CO.,
General Partner
By: /s/ XXXXXXXX XXXX
------------------------------
Name: Xxxxxxxx Xxxx
Title: Partner
16
For purposes of Section 5.3:
WARBURG, XXXXXX & CO.,
General Partner
By: /s/ XXXXXXXX XXXX
------------------------------
Name: Xxxxxxxx Xxxx
Title: Partner
17
Exhibit A
Initial Second
Aggregate Closing No. Initial Closing Closing No. Second Closing
Investor Name and Address Number of Shares of Shares Purchase Price of Shares Purchase Price
------------------------- ---------------- --------- -------------- --------- --------------
Warburg, Xxxxxx Equity Partners, L.P. 9,450 8,505 $85,050,000 945 $9,450,000
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxxx Xxxx
Warburg, Xxxxxx Netherlands Equity 300 270 $2,700,000 30 $300,000
Partners I, C.V.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxxx Xxxx
Warburg, Xxxxxx Netherlands Equity 200 180 $1,800,000 20 $200,000
Partners II, C.V.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxxx Xxxx
Warburg, Xxxxxx Netherlands Equity 50 45 $450,000 5 $50,000
Partners III, C.V.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxxxxx Xxxx
DISCLOSURE SCHEDULE FOR
STOCK PURCHASE AGREEMENT
BY AND AMONG
TRANSKARYOTIC THERAPIES, INC.
AND SEVERAL PURCHASERS COLLECTIVELY
KNOWN AS "WARBURG PINCUS"
DATED: May 18, 2000
3.1 Incorporation
-------------
(a) TKT Securities Corp., organized to do business under the laws of the
Commonwealth of Massachusetts, is a wholly-owned subsidiary of the Company.
(b) TKT Europe - 5S AB, organized to do business under the laws of Sweden, is an
80% owned subsidiary of the Company. This subsidiary was organized to market the
Company's Niche Protein products in Sweden and other European countries. The
Company is obligated to fund this entity's operating losses. The Company is also
obligated under certain put and call arrangements relating to the capital stock
not owned by the Company.
3.2 Capitalization
--------------
The Company's option plans provide that the Company may issue up to 4,250,000
shares of Common Stock. As of March 31, 2000, options to purchase 2,335,381
shares of Common Stock were outstanding. Subsequent to March 31, 2000, the
Company may issue additional options to purchase shares of its Common Stock
under its stock option plans.
3.3 Authorization
-------------
None
3.4 Valid Issuance of the Shares
----------------------------
None
3.5 Financial Statements
--------------------
(a) See Section 3.1(b).
(b) The Company is presently engaged in negotiations with the Massachusetts
Institute of Technology for the long term lease of over 125,000 square feet of
office and laboratory space in Cambridge, Massachusetts. This lease would be a
material liability of the Company.
(c) On May 15, 2000, the trial between the Company and Amgen Inc. opened. The
trial will decide Amgen's allegations that the Company's Gene-Activated
erythopoietin ("GA-EPO") and processes for producing GA-EPO infringe Amgen's
U.S. Patent Nos. 5,547,933, 5,618,698, 5,621,080, 5,756,349 and 5,955,422. If
the outcome of the trial is not favorable to the Company, the Company's
prospects may be materially and adversely affected. In connection with the
trial, on April 26, 2000, the U.S. District Court of
Massachusetts granted Amgen, Inc.'s Motion for Summary Judgment of literal
infringement on Claim 1 of U.S. Patent No. 5,955,422.
(d) On May 2, 2000, Genzyme General announced completion of a preliminary
analysis of the results of a phase 3 trial involving Fabrazyme and its intent to
file a Biologics License Application with the Food and Drug Administration.
3.6 Disclosure Documents
--------------------
None
3.7 Consents
--------
None
3.8 No Conflict
-----------
None
3.9 Brokers or Finders
------------------
None
3.10 Nasdaq National Market
----------------------
None
3.11 Absence of Litigation
---------------------
See Section 3.5(c).
