[logo] ▇▇▇▇ CAPITAL PARTNERS
EXHIBIT 10.6
September 20, 2005
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
Diomed Holdings, Inc.
One Dundee Park
P.O. Box 97 Andover, MA 01810
Dear ▇▇▇▇▇:
▇▇▇▇ Capital Partners, LLC ("we," "us" or "RCP") is pleased to act as
financial advisor and co-placement agent for Diomed Holdings, Inc. ("you" or the
"Company") in connection with your proposed private placement. The terms of our
engagement are set forth below in this letter (this "Agreement"). We look
forward to working with you.
1. The Offering.
(a) We currently anticipate raising approximately $10 million
involving the sale in a private placement financing by the Company of
equity or equity-linked securities (the "Offering") to institutional
investors (the "Investors"). Of the approximately $10 million to be
raised in the Offering, we anticipate that approximately $3 million will
be sold to Investors introduced by RCP and with which RCP has substantial
prior relationships, the names of which are listed on the attached
Schedule A (the "RCP Investors"). The actual terms of the Offering will
depend on market conditions, and will be subject to negotiation between
the Company and prospective Investors.
(b) Although we cannot guarantee you that we will be able to
raise new capital, we will conduct the offering on a "best efforts"
basis.
(c) In turn, during the term of our engagement, you agree not
to engage any other financial advisor, placement agent or finder to raise
capital (including debt) for you except for Musket Research Associates,
Inc. ("MRA").
(d) We will not approach any prospective Investor listed on
Schedule A to the engagement letter between the Company and MRA.
(e) We will provide feedback to the Board of Directors of the
Company with respect to our views as to the terms and conditions of the
financing and how such terms and conditions compare with other
transactions with which we are familiar in the current financing
environment for companies comparable to the Company. The foregoing will
not be a "fairness opinion" but rather will informal advice be provided
to assist the Board of Directors in making its own determination, in the
business judgment of the Board of Directors, of whether consummating the
Offering is, or such Offering terms and conditions are, acceptable to the
Company
Diomed, Inc.
Page 2
2. Fees and Expenses.
(a) Contemporaneously with the consummation of the Offering,
such that all of the funds to be raised in connection therewith have been
paid to the Company (the "Proceeds"), the Company will pay us in cash a
fee equal to five percent (5%) of the amount raised by us from RCP
Investors. Such fee shall constitute the complete and full compensation
payable to us and our agents arising from the Offering and the sale by the
Company of securities thereunder to the Investors (including the RCP
Investors and all other Investors), and neither the Company nor any of its
agents, successors or assigns shall be entitled to any additional payment
whatsoever hereunder, including in the event that the Company enters into
any subsequent financing transaction of any nature with any one or more of
the Investors (including the RCP Investors and all other Investors) in the
Offering.
3. Term of Engagement.
(a) The term of our engagement will be the later of thirty
days commencing on the day this Agreement is signed by Company or upon the
close of the Offering. However, either party may terminate our engagement
at any time upon 5 days written notice to the other party. Upon
termination, we will be entitled to collect all fees earned (if any)
through the date of termination.
4. Representations and Warranties.
(a) We hereby represent and warrant to the Company that RCP
is a duly-licensed broker-dealer and has all requisite approvals, power,
licenses and registrations as are required to provide its services to the
Company as set forth herein.
(b) You agree that, in connection with the Offering, you will
enter into subscription, registration rights and other customary
agreements, and that your counsel will supply an opinion letter on the
transaction, all of which will be in form and substance reasonably
acceptable to, and addressed to, us and the Investors.
(c) You further agree that we may rely upon, and are a third
party beneficiary of, the representations and warranties and applicable
covenants, set forth in any agreements with Investors in the Offering.
5. Diligence; Information. In connection with RCP's activities on your
behalf, you will furnish RCP with all financial and other information
regarding the Company that RCP reasonably believes appropriate to its
assignment (all such information so furnished by the Company, whether
furnished before or after the date of this Agreement, being referred
to herein as the "Information"). The Company will provide RCP with
reasonable access to the officers, directors, employees, independent
accountants, legal counsel and other advisors and consultants of the
Company. You recognize and agree that RCP (i) will use and rely
primarily on the Information and information available from generally
recognized public sources in performing the services contemplated by
this Agreement without independently verifying the Information or such
other information, (ii) does not assume responsibility for the
accuracy of the Information or such other information, and (iii) will
not make an appraisal of any assets or liabilities owned or controlled
by the Company or its market competitors. We will maintain the
confidentiality of the Information and, unless and until such
information shall have been made publicly available by the Company or
by others without breach of a confidentiality agreement, shall
disclose the Information only as authorized by the Company or as
required by law or by order of a governmental authority or court of
competent jurisdiction. If we are legally required to make disclosure
of any of the Information, we will give notice to the Company prior to
such disclosure, to the extent that we can practically do so.
Diomed, Inc.
Page 3
The foregoing paragraph shall not apply to information that:
(i) at the time of disclosure by the Company is, or thereafter becomes,
generally available to the public or within the industries in which
the Company or its affiliates conduct business, other than as a
direct result of a breach by us of our obligations under this
Agreement;
(ii) prior to or at the time of disclosure by the Company, was already in
the possession of, or conceived by, us or any of our affiliates, or
could have been developed by them from information then in their
possession, by the application of other information or techniques in
their possession, generally available to the public, or available to
us or our affiliates other than from the Company (including as
previously provided to us by the Company);
(iii) at the time of disclosure by the Company or thereafter, is obtained
by us or any of our affiliates from a third party who we reasonably
believe to be in possession of the information not in violation of
any contractual, legal or fiduciary obligation to the Company with
respect to that information; or
(iv) is independently developed by us or our affiliates.
Nothing in this Agreement shall be construed to limit the ability of RCP
or its affiliates to pursue, investigate, analyze, invest in, or engage in
investment banking, financial advisory or any other business relationship
with entities other than the Company, notwithstanding that such entities
may be engaged in a business which is similar to or competitive with the
business of the Company, and notwithstanding that such entities may have
actual or potential operations, products, services, plans, ideas,
customers or supplies similar or identical to the Company's, or may have
been identified by the Company as potential merger or acquisition targets
or potential candidates for some other business combination, cooperation
or relationship. The Company expressly acknowledges and agrees that it
does not claim any proprietary interest in the identity of any other
entity in its industry or otherwise, and that the identity of any such
entity is not confidential information.
Diomed, Inc.
Page 4
6. Indemnification and Contribution. The Company agrees to indemnify RCP and
its controlling persons, representatives and agents in accordance with
the indemnification provisions set forth in Appendix I, which is
incorporated herein by this reference. These provisions will apply
regardless of whether the proposed Offering is consummated or this
Agreement is terminated.
7. Other RCP Engagements. Nothing in this Agreement shall be construed to
limit the ability of RCP or its affiliates to pursue, investigate,
analyze, invest in, or engage in investment banking, financial
advisory or any other business relationship with entities other than
the Company, notwithstanding that such entities may be engaged in a
business which is similar to or competitive with the business of the
Company, and notwithstanding that such entities may have actual or
potential operations, products, services, plans, ideas, customers or
supplies similar or identical to the Company's, or may have been
identified by the Company as potential merger or acquisition targets
or potential candidates for some other business combination,
cooperation or relationship. The Company expressly acknowledges and
agrees that it does not claim any proprietary interest in the identity
of any other entity in its industry or otherwise, and that the
identity of any such entity is not confidential information.
8. Other Finders and Placement Agents. You represent and warrant that, with
the exception of MRA, there is no other person or entity that is entitled
to a finder's fee or any type of brokerage commission in connection with
the Offering as a result of any agreement or understanding with the
Company.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to
contracts executed and to be wholly performed therein without giving
effect to its conflicts of laws principles or rules. The Company and
MRA agree that any dispute concerning this Agreement shall be resolved
through binding arbitration conducted by a panel of three arbitrators,
one chosen by the Company, one chosen by MRA and the third chosen by
the two arbitrators selected by the parties, pursuant to the
commercial arbitration rules of the American Arbitration Association.
If the parties are unable to reach agreement on the arbitration panel,
the arbitrators will be appointed pursuant to the applicable
commercial rules of the American Arbitration Association. Arbitration
will be venued in New York County, in the City and State of New York.
10. Announcement of Offering. If the Offering is consummated, RCP may, at its
expense, place an announcement in such newspapers and periodicals as RCP
may desire, provided, that the Company shall have given its prior
approval of each such announcement as to its content and form, such
approval not to be unreasonably withheld.
Diomed, Inc.
Page 5
11. Advice to the Board. The Company acknowledges that any advice given
by us to you (including without limitation such advice as may be given
pursuant to section 1(e) hereof) is solely for benefit and use of the
Board of Directors of the Company and may not be used, reproduced,
disseminated, quoted or referred to, without our prior written
consent. If disclosure of our advice is required by law or in your
view is necessary for the defense of any proceeding, then,
notwithstanding the foregoing, you may disclose such advice so long as
you shall, prior to such disclosure, afford us the opportunity to
review in advance the portion of such disclosure which mentions us or
our advice and to approve the form thereof, such approval not to be
unreasonably withheld by us.
12. Entire Agreement. This Agreement (including any schedules and appendices
hereto) constitutes the entire agreement between the parties and
supersedes and cancels any and all prior or contemporaneous arrangements,
understandings and agreements, written or oral, between them relating to
the subject matter hereof.
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Diomed, Inc.
Page 6
We look forward to working with you toward the successful conclusion of
this engagement, and developing a long-term relationship with the Company.
Very truly yours,
▇▇▇▇ CAPITAL PARTNERS, LLC
By:
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▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Managing Director
Confirmed and accepted as of
this ____ day of September, 2005:
DIOMED, INC.
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
NOTE: SCHEDULES AND APPENDECES OMITTED