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BIOPURE CORPORATION
(a Delaware corporation)
PLACEMENT AGENCY AGREEMENT
Dated: July 17, 2003
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BIOPURE CORPORATION
(a Delaware corporation)
Up to $17,250,000 in Shares of Common Stock
(Par Value $.01 Per Share)
PLACEMENT AGENCY AGREEMENT
July 17, 2003
ThinkEquity Partners, LLC
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Ladies and Gentlemen:
Biopure Corporation, a Delaware corporation (the "Company"), confirms its
agreement with ThinkEquity Partners, LLC ("ThinkEquity" or the "Placement
Agent"), to act as exclusive placement agent for the Company, on a reasonable
best efforts basis, with respect to the issue and sale by the Company of up to
$17,250,000 in shares of Class A common stock, par value $.01 per share, of the
Company (the "Common Stock") in one or more shelf takedowns, as described below,
directly to various investors (collectively, the "Investors"). The shares of
Common Stock sold to Investors pursuant to this Agreement, are hereinafter
referred to as the "Securities."
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-106288) for the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"). Such registration statement has been declared effective by
the Commission and the Company has filed such post-effective amendments thereto
as may be required and each such post-effective amendment has been declared
effective by the Commission. Such registration statement (as so amended, if
applicable), including the information, if any, deemed to be a part thereof
pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement"; and the
final prospectus and the final prospectus supplement, if any, relating to the
offering of the Securities, in the forms first furnished to the Placement Agent
by the Company for use in connection with the offering of the Securities, are
collectively referred to herein as the "Prospectus"; provided, however, that (i)
all references to the "Registration Statement" and the "Prospectus" shall also
be deemed to include all documents incorporated therein by reference pursuant to
the 1933 Act and the Securities Exchange Act of 1934, as amended (the "1934
Act");
(ii) if the Company files a registration statement with the Commission pursuant
to Rule 462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration
Statement"), then all references to "Registration Statement" shall also be
deemed to include the Rule 462 (b) Registration Statement; and (iii) if the
Company elects to rely upon Rule 434 of the 1933 Act Regulations, then (A) all
references to "Prospectus" shall also be deemed to include the final or
preliminary prospectus and the applicable term sheet or abbreviated term sheet
(the "Term Sheet"), as the case may be, in the forms first furnished to the
Placement Agent by the Company in reliance upon Rule 434 of the 1933 Act
Regulations, and (B) all references to the date of the Prospectus shall mean the
date of the Term Sheet. A "preliminary prospectus" shall be deemed to refer to
(i) any prospectus used before the Registration Statement became effective and
(ii) any prospectus that omitted, as applicable, the Rule 430A Information, the
Rule 434 Information or other information to be included upon pricing in a form
of prospectus filed with the Commission pursuant to Rule 424(b) of the 1933 Act
Regulations and was used after such effectiveness and prior to the initial
delivery of the Prospectus to the Placement Agent by the Company. For purposes
of this Agreement, all references to the Registration Statement, Prospectus,
Term Sheet or preliminary prospectus or to any amendment or supplement to any of
the foregoing shall be deemed to include any copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("▇▇▇▇▇").
This Agreement shall not give rise to any commitment by the Placement Agent
to purchase any of the Securities, and the Placement Agent shall have no
authority to bind the Company. In acting as the Placement Agent, ThinkEquity
will seek to place the Securities on a reasonable best efforts basis, acting as
the Company's agent and not as a principal in the sale and placement of the
Securities. The Placement Agent does not guarantee that it will be able to raise
new capital in any prospective offering. ThinkEquity may separately engage, at
its own expense and with the prior approval of the Company, sub-agents as it may
deem necessary or appropriate.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to the Placement Agent as of the date hereof and as of the closing
time of each sale of Securities hereunder (each a "Closing Time"), and agrees
with the Placement Agent, as follows:
(i) Compliance with Registration Requirements. The Company meets the
requirements for use of Form S-3 under the 1933 Act, and has filed with the
Commission the Registration Statement on such Form S-3 (Registration File
No. 333-106288), which became effective on July 3, 2003, for the
registration under the 1933 Act of the Securities. The Registration
Statement and any Rule 462(b) Registration Statement has become effective
under the 1933 Act and no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are
contemplated by the Commission, and any request on the part of the
Commission for additional information has been complied with.
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At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto (including
the filing of the Company's most recent Annual Report on Form 10-K with the
Commission) became effective, at the date of this Agreement and at each
Closing Time the Registration Statement, the Rule 462(b) Registration
Statement and any amendments and supplements thereto complied and will
comply in all material respects with the requirements of the 1933 Act and
the 1933 Act Regulations and did not and will 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 not
misleading. Neither the Prospectus nor any amendments or supplements
thereto at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time, included or will include an untrue
statement of a material fact or omitted or will omit 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. If Rule 434 is
used, the Company will comply with the requirements of Rule 434. The
representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by ThinkEquity expressly for use in the
Registration Statement or Prospectus.
Each preliminary prospectus and Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Placement Agent
for use in connection with this or any offering contemplated hereby (each,
an "Offering") was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
If a Rule 462(b) Registration Statement is required in connection with
the offering and sale of the Securities, the Company has complied or will
comply with the requirements of Rule 111 under the 1933 Act Regulations
relating to the payment of filing fees thereof.
(ii) Incorporated Documents. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), as applicable, and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was
issued and at each Closing Time, did not and will 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.
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(iii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iv) Financial Statements. The financial statements included in the
Registration Statement and the Prospectus, together with the related
schedules and notes, present fairly in all material respects the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the results of operations, changes in stockholders' equity
and cash flows of the Company and its consolidated subsidiaries for the
periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles ("GAAP") applied
on a consistent basis throughout the periods involved. The supporting
schedules, if any, included in the Registration Statement and Prospectus
present fairly in all material respects in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the Registration Statement
and Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement and Prospectus.
(v) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business (a "Material Adverse Effect"), (B) there have
been no transactions entered into by the Company or its subsidiaries, other
than those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries, considered as one enterprise,
(C) there has been no dividend or distribution of any kind declared, paid
or made by the Company on any class of its capital stock, and (D) there has
been no increase in long-term debt or decrease in the capital of the
Company, except for decreases resulting from operating losses in the
ordinary course of business that the Registration Statement and Prospectus
disclose have occurred or may occur.
(vi) Good Standing of the Company. The Company has been duly organized
and is validly existing as a corporation in good standing under the laws of
the State of Delaware and has corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
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(vii) No Significant Subsidiaries. The Company has no "significant
subsidiaries," as such term is defined in Article 1, Rule 1-02(w) of
Regulation S-X, promulgated pursuant to the 1933 Act. Further, the Company
does not derive any material portion of its revenues or expenses or conduct
any material portion of its business from and none of the Company's
material assets are held by any of its subsidiaries considered alone, or
from all of its subsidiaries considered as one enterprise.
(viii) Capitalization. As of July 8, 2003, the authorized, issued and
outstanding capital stock of the Company consists of 38,899,498 shares of
Common Stock and 117.7 shares of Class B Common Stock, par value $.01 per
share. The shares of issued and outstanding capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable. None of the outstanding shares of capital stock of the
Company was issued in violation of (i) the preemptive rights, rights of
first refusal (other than as disclosed with respect to Steelhead
Investments, Ltd.) or other similar rights of any securityholder of the
Company, or (ii) any applicable law (including, without limitation, any
applicable Federal or state securities or blue-sky law).
(ix) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(x) Authorization and Description of Securities. The Securities to be
purchased by Investors in any Offering from the Company have been duly
authorized for issuance and sale to such Investors and, when issued and
delivered by the Company against payment therefor, will be validly issued,
fully paid and non-assessable. The Common Stock conforms to all statements
relating thereto contained in the Prospectus and such description conforms
to the rights set forth in the instruments defining the same; no holder of
the Securities will be subject to personal liability by reason of being
such a holder; and the issuance of the Securities is not subject to any
preemptive rights, rights of first refusal or other similar rights of any
securityholder of the Company.
(xi) Absence of Defaults and Conflicts. Neither the Company nor any of
its subsidiaries is in violation of its charter or by-laws or in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (collectively, "Agreements and Instruments") except
for such defaults that would not result in a Material Adverse Effect; and
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and in the Prospectus
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Prospectus
under the caption "Use of Proceeds") and compliance by the Company with its
obligations hereunder have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving of
notice or passage of time or both, conflict with or constitute a breach of,
or default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance
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upon any property or assets of the Company or any subsidiary pursuant to,
the Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not result in a
Material Adverse Effect), nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any subsidiary
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary or any of
its assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any subsidiary.
(xii) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any subsidiary exists or, to the knowledge of the Company,
is imminent, and the Company is not aware of any existing or imminent labor
disturbance by the employees of any of its or any subsidiary's principal
suppliers, manufacturers, customers or contractors, which, in either case,
may reasonably be expected to result in a Material Adverse Effect.
(xiii) Absence of Proceedings. Except as described in the Registration
Statement, there is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened,
against or affecting the Company or any subsidiary, which is required to be
disclosed in the Registration Statement, or which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations hereunder.
The aggregate of all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of its property or
assets is the subject which are not described in the Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xiv) Accuracy of Exhibits. There are no contracts or documents which
are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits thereto which have not been so
described and filed as required.
(xv) Possession of Intellectual Property. The Company and its
subsidiaries own or possess adequate patents, patent rights, licenses,
inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
systems or procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary to
carry on the business now operated by it or described in the Registration
Statement or Prospectus as being owned or possessed by it as the case may
be, and neither the Company nor any of its subsidiaries has received any
notice or is otherwise aware of any
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infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(xvi) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company of its
obligations hereunder, in connection with the offering, issuance or sale of
the Securities under this Agreement or the consummation of the transactions
contemplated by this Agreement, except such as have already been obtained
or as may be required under the 1933 Act or the 1933 Act Regulations and
foreign or state securities laws.
(xvii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies,
including, without limitation, the U.S. Food and Drug Administration (the
"FDA"), necessary to conduct the business now operated by them, including,
without limitation, all Governmental Licenses described in the Registration
Statement and Prospectus; the Company and its subsidiaries are in
compliance with the terms and conditions of all such Governmental Licenses
and all applicable FDA rules and regulations guidelines and policies,
except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses
have been duly and validly issued and are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would
not have a Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xviii) Regulatory Matters. The products developed, manufactured and
marketed by the Company or any of its subsidiaries, as described in the
Prospectus, including Hemopure and Oxyglobin, are being developed,
manufactured and marketed in accordance with all applicable Governmental
Licenses. Neither the Company nor any of its subsidiaries has received any
notices or correspondence from the FDA or any other governmental agency
regarding any Governmental License which may require the termination,
modification or limitation of such Governmental License, or affect in any
adverse manner, the development, manufacturing or marketing of any of its
products, including Hemopure and Oxyglobin, as described in the Prospectus.
(xix) Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good
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title to all other properties owned by them, in each case, free and clear
of all mortgages, pledges, liens, security interests, claims, restrictions
or encumbrances of any kind except such as (a) are described in the
Prospectus or (b) do not, singly or in the aggregate, materially affect the
value of such property and do not interfere with the use made and proposed
to be made of such property by the Company or any of its subsidiaries; and
all of the leases and subleases material to the business of the Company and
its subsidiaries, considered as one enterprise, and under which the Company
or any of its subsidiaries holds properties described in the Prospectus,
are in full force and effect, and neither the Company nor any subsidiary
has any notice of any material claim of any sort that has been asserted by
anyone adverse to the rights of the Company or any subsidiary under any of
the leases or subleases mentioned above, or affecting or questioning the
rights of the Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or sublease.
(xx) Investment Company Act. The Company is not, and upon the issuance
and sale of the Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an "investment company"
as such terms are defined in the Investment Company Act of 1940, as amended
(the "1940 Act").
(xxi) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (A) neither the Company nor any of its
subsidiaries is in violation of any federal, state, local or foreign
statute, law, rule, regulation, ordinance, code, policy or rule of common
law or any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface
or subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law
against the Company or any of its subsidiaries, and (D) there are no events
or circumstances known to the Company that would reasonably be expected to
form the basis of an order for clean-up or remediation, or an action, suit
or proceeding by any private party or governmental body or agency, against
the Company or any of its subsidiaries relating to Hazardous Materials or
any Environmental Laws.
(xxii) Tax Returns. The Company has filed all federal, state, local
and foreign income tax returns which have been required to be filed (except
in any case in which an extension has been granted or the failure to so
file would not result in a Material Adverse
8
Effect) and has paid all taxes required to be paid and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except, in all cases, for any such tax,
assessment, fine or penalty that is being contested in good faith.
(xxiii) Stock Exchange Listing. The Common Stock of the Company is
registered under the 1934 Act and is listed on The Nasdaq National Market.
The Company has taken no action designed to terminate, or likely to have
the effect of terminating the registration of its Common Stock under the
Exchange Act or delisting or suspending from trading the Common Stock from
Nasdaq, nor has the Company received any information suggesting that the
Commission or the National Association of Securities Dealers, LLC ("NASD")
is contemplating terminating or suspending such registration or listing.
(xxiv) No Price Stabilization or Manipulation. The Company has not
taken and will not take, directly or indirectly, any action designed to or
that could reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of the Securities.
(xxv) Registration Rights. There are no persons with registration
rights or other similar rights to have any securities registered pursuant
to the Registration Statement or otherwise registered by the Company under
the 1933 Act that have not been waived or exercised.
(xxvi) NASD Matters. With respect to the compensation to be paid to
the Placement Agent under this Agreement, such compensation arrangements
are exempt from the filing requirements of NASD Rule 2710 because the
Company has met and continues to meet the pre-1992 eligibility requirements
for the use of the Registration Statement on Form S-3 in connection with
the Offerings contemplated thereby and hereby.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Placement Agent shall be
deemed a representation and warranty by the Company to the Placement Agent as to
the matters covered thereby.
SECTION 2. Placement Agent Fees; Delivery.
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees:
(i) to pay to ThinkEquity a transaction fee equal to five percent (5%)
of the aggregate gross proceeds of each Offering (the "Transaction Fee");
(ii) to pay to ThinkEquity the Transaction Fee for any transaction
completed by the Company during the Engagement Period (as defined below)
involving Securities or other capital stock of the Company and the
principal purpose of which was to secure equity financing; and
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(iii) to pay to ThinkEquity the Transaction Fee for any sale of
securities by the Company to any Prospective Investor (as defined below)
where such transaction is completed during the six-month period following
the Engagement Period.
Notwithstanding the foregoing, no Transaction Fee or reimbursement amount shall
be paid to ThinkEquity in connection with any Securities transactions (i)
relating to the BNY Arrangement and (ii) completed with ▇▇▇▇▇▇▇ Associates, L.P.
or its affiliates. The term "Engagement Period" means the period commencing on
June 19, 2003 and continuing through the earlier of (i) 120 days from such date,
(ii) the date of the last closing of an Offering of Securities, or (iii) the
termination of this Agreement pursuant to Section 9 hereof. The term
"Prospective Investor" shall mean any investor introduced by ThinkEquity that
has not invested in the Company prior to June 19, 2003, which investor is
included in a list of prospective investors provided to the Company by
ThinkEquity within 5 business days following the termination of the Engagement
Period.
(b) The Placement Agent acknowledges having been paid a non-refundable
retainer fee of $25,000 by the Company. Such amount shall be credited by the
Company against any payment to the Placement Agent pursuant subsection 2(a) of
this Agreement.
(c) Any fee payable to the Placement Agent pursuant to Section 2 of this
Agreement shall be paid at the applicable Closing Time (if pursuant to Section
2(a)(i) above) or on the closing date (if pursuant to Sections 2(a)(ii) or
2(a)(iii) above) of such transaction in cash by wire transfer of immediately
available funds to a bank account designated by the Placement Agent.
SECTION 3. Covenants of the Company. The Company covenants with the
Placement Agent as follows:
(a) Compliance with Securities Regulations and Commission Requests. Until
all Offerings hereunder have been completed or terminated, the Company, subject
to Section 3(b), will comply with the requirements of Rule 430A of the 1933 Act
Regulations and/or Rule 434 of the 1933 Act Regulations, if and as applicable,
and will notify the Placement Agent immediately, and confirm the notice in
writing, of (i) the effectiveness of any post-effective amendment to the
Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424 and will
take such steps as it deems necessary to ascertain promptly whether the
Prospectus transmitted for filing under Rule 424 was received for filing by the
Commission and, in the event that it was not, it will promptly file the
Prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
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(b) Filing of Amendments. Until the Offerings are completed or terminated,
the Company will give the Placement Agent notice of its intention to file or
prepare any amendment to the Registration Statement (including any filing under
Rule 462(b)), any Term Sheet or any amendment, supplement or revision to either
the prospectus included in the Registration Statement at the time it became
effective or to the Prospectus, will furnish the Placement Agent with copies of
any such documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to which the
Placement Agent or counsel for the Placement Agent shall object.
(c) Delivery of Registration Statements. The Company has furnished or will
deliver to the Placement Agent and counsel for the Placement Agent, without
charge, signed copies of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein) filed before the Offerings are completed or terminated and
signed copies of all consents and certificates of experts, and will also deliver
to the Placement Agent, without charge, a conformed copy of the Registration
Statement as originally filed and of each amendment thereto (without exhibits).
The copies of the Registration Statement and each amendment thereto furnished to
the Placement Agent will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(d) Delivery of Prospectus. The Company will deliver to the Placement
Agent, without charge, as many copies of each preliminary prospectus as the
Placement Agent reasonably requests, and the Company hereby consents to the use
of such copies for purposes permitted by the 1933 Act. The Company will furnish
to the Placement Agent, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus (as amended or supplemented) as the Placement Agent may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Placement Agent will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with
the 1933 Act and the 1933 Act Regulations so as to permit the completion of the
distribution of the Securities as contemplated in this Agreement and the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Placement Agent or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to an
Investor, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement any
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will
11
furnish to the Placement Agent such number of copies of such amendment or
supplement as the Placement Agent may reasonably request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Placement Agent, if required, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Placement Agent may designate and to
maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earning statement for the purposes of,
and to provide the benefits contemplated by, the last paragraph of Section 11(a)
of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in each Offering in the manner specified in the
Prospectus under "Use of Proceeds."
(i) Listing. The Company will use its best efforts to effect and maintain
the quotation of the Securities on the Nasdaq National Market and will file with
the Nasdaq National Market all documents and notices required by the Nasdaq
National Market of companies that have securities that are traded in the
over-the-counter market and quotations for which are reported by the Nasdaq
National Market.
(j) Reporting Requirements. The Company, during the period when any
Prospectus contemplated hereby is required to be delivered under the 1933 Act or
the 1934 Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and
the rules and regulations of the Commission thereunder.
(k) No Manipulation of Market for Securities. Except for the authorization
of actions permitted to be taken by the Placement Agent as contemplated herein
or in the Prospectus, the Company will not (a) take, directly or indirectly, any
action designed to cause or to result in, or that might reasonably be expected
to constitute, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities, and (b) until
the Closing Time (i) sell, bid for or purchase the Securities or pay any person
any compensation for soliciting purchases of the Securities or (ii) pay or agree
to pay to any person any compensation for soliciting another to purchase any
other securities of the Company.
12
(l) Additional Documents. The Company will enter into any subscription,
purchase or other customary agreements as the Placement Agent, the Investors and
the Company deem necessary or appropriate to consummate each Offering, all of
which will be in form and substance reasonably acceptable to the Placement
Agent, the Investors and the Company. The Company agrees that the Placement
Agent may rely upon, and is a third party beneficiary of, the representations
and warranties, and applicable covenants, set in any such purchase, subscription
or other agreement with Investors in each Offering.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance
of its obligations under this Agreement and in connection with the transactions
contemplated herein, including without limitation (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation (provided there shall be no duplication with expenses paid by the
Company under clause (xii) below), printing and delivery to the Placement Agent
of this Agreement and such other documents as may be required in connection with
the offering, purchase, sale, issuance or delivery of the Securities
contemplated herein, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the investors contemplated herein, including
any stock or other transfer taxes and any stamp or other duties payable upon the
sale, issuance or delivery of the Securities to such investors, (iv) the fees
and disbursements of the Company's counsel, accountants and other advisors, (v)
the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Placement Agent in connection with the
preparation of the Blue Sky survey and any supplement thereto (not to exceed
$2,000), (vi) the printing and delivery to the Placement Agent of copies of each
preliminary prospectus, any Term Sheets, the Prospectus and any amendments or
supplements thereto, (vii) the preparation, printing and delivery to the
Placement Agent of copies of the Blue Sky Survey and any supplement thereto,
(viii) the fees and expenses of any transfer agent or registrar for the
Securities, (ix) the filing fees, incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with the review by
the National Association of Securities Dealers, Inc. (the "NASD"), if any, of
the terms of the sale of the Securities (x) the fees and expenses incurred in
connection with the inclusion of the Securities in the Nasdaq National Market,
(xi) all costs and expenses incident to the travel and accommodation of the
Company's employees on the "roadshow" if any, (xii) all actual and reasonable
out of pocket expenses incurred by the Placement Agent in connection with this
Agreement and the sale of the Securities (including reasonable legal fees and
expenses), not exceeding, in the case of this clause (xii) only, $25,000 in
total, including any reimbursement amount under that certain Engagement Letter,
dated June 19, 2003, between the Company and ThinkEquity, without the Company's
prior written consent; and (xiii) all other fees, costs and expenses referred to
in Part II of the Registration Statement.
(b) Termination of Agreement. In the event this Agreement is terminated by
either party for any reason, the Company shall reimburse the Placement Agent for
all of its out-of-pocket expenses, including but not limited to the reasonable
fees and disbursements of counsel for the Placement Agent.
13
SECTION 5. Conditions of the Placement Agent's Obligations.
The obligations of the Placement Agent hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof as of the
date hereof and as of each Closing Time as though then made, to the performance
by the Company of its covenants and other obligations hereunder on and as of
such dates, and to the following further conditions:
(a) Effectiveness of Registration Statement. A prospectus containing the
Rule 430A Information shall have been filed with the Commission in accordance
with Rule 424(b) (or a post-effective amendment providing such information shall
have been filed and declared effective in accordance with the requirements of
Rule 430A) or, if the Company has elected to rely upon Rule 434, a Term Sheet
shall have been filed with the Commission in accordance with Rule 424(b).
(b) Opinion of Outside Counsel for Company. At each Closing Time, the
Placement Agent shall have received the favorable opinion, dated as of such
Closing Time, of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for the
Company, in form and substance satisfactory to counsel for the Placement Agent,
to the effect set forth in Exhibit A hereto and to such further effect as
counsel to the Placement Agent may reasonably request.
(c) Opinion of General Counsel for Company. At each Closing Time, the
Placement Agent shall have received the favorable opinion, dated as of such
Closing Time, of General Counsel for the Company, in form and substance
satisfactory to counsel for the Placement Agent, to the effect set forth in
Exhibit B hereto and to such further effect as counsel to the Placement Agent
may reasonably request.
(d) Officers' Certificate. At each Closing Time, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, and the Placement Agent shall have
received a certificate of the President or a Vice President of the Company and
of the chief financial or chief accounting officer of the Company, dated as of
such Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1(a) hereof
are true and correct with the same force and effect as though expressly made at
and as of such Closing Time, (iii) the Company has complied with all agreements
and satisfied all conditions on its part to be performed or satisfied at or
prior to such Closing Time, and (iv) no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or are contemplated by the
Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Placement Agent shall have received from Ernst & Young, LLP a
letter dated such date, in form and substance satisfactory to the Placement
Agent, containing statements and information of the
14
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At each Closing Time, the Placement Agent
shall have received from Ernst & Young, LLP a letter, dated as of Closing Time,
to the effect that they reaffirm the statements made in the letter furnished
pursuant to subsection (e) of this Section, except that the specified date
referred to shall be a date not more than three business days prior to such
Closing Time.
(g) Listing. The Securities shall have been approved for listing on the
Nasdaq National Market, subject to official notice of issuance.
(h) Additional Documents. At each Closing Time, counsel for the Placement
Agent shall have been furnished with such documents and opinions as they may
require, including without limitation, a customary Secretary's Certificate, to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be reasonably satisfactory in form and substance to
the Placement Agent and counsel for the Placement Agent.
(i) Termination of Agreement. If any condition specified in this Section 5
shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Placement Agent by notice to the Company at
any time at or prior to such Closing Time and such termination shall be without
liability of any party to any other party except as provided in Section 4 and
except that Sections 1, 2, 4, 6, 7, 10, 11 and 12 shall survive any such
termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Placement Agent. The Company agrees to indemnify and
hold harmless the Placement Agent and each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information deemed to be a part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
15
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that any such settlement is
effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Placement Agent),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Placement Agent expressly for use in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto). The foregoing indemnity with respect to
any untrue statement contained in or omission from a preliminary prospectus
shall not inure to the benefit of the Placement Agent with respect to a claim by
an Investor with respect to an Offering in which such Investor purchased
Securities if the Company shall sustain the burden of proving that such Investor
was not sent or given a copy of the Prospectus (or the Prospectus as amended or
supplemented) at or prior to the written confirmation of the sale of such
Securities to such Investor and the untrue statement contained in or omission
from such preliminary prospectus was corrected in the Prospectus (or the
Prospectus as amended or supplemented).
(b) Indemnification of Company, Directors and Officers. The Placement Agent
agrees to indemnify and hold harmless the Company, its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by the Placement Agent expressly for use in the Registration Statement
(or any amendment thereto) or such preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against
16
it in respect of which indemnity may be sought hereunder, but failure to so
notify an indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability which it may
have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel to the indemnified
parties shall be selected by ThinkEquity and reasonably satisfactory to the
Company, and, in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties shall be selected by the Company and
reasonably satisfactory to ThinkEquity. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying parties be liable for fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
all indemnified parties in connection with any one action or separate but
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 6 or Section 7 hereof (whether
or not the indemnified parties are actual or potential parties thereto), unless
such settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to
or an admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 90 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Placement Agent on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Placement Agent on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
17
The relative benefits received by the Company on the one hand and the
Placement Agent on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (after deducting the Transaction Fee, but
before deducting expenses) received by the Company bear to the Transaction Fee
received by the Placement Agent.
The relative fault of the Company on the one hand and the Placement Agent
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Placement Agent and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Placement Agent agree that it would not be just and
equitable if contribution pursuant to this Section 7 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 in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, the Placement Agent shall
not be required to contribute any amount in excess of the amount by which the
total price of the Securities placed by it exceeds the amount of any damages
which the Placement Agent has otherwise been required to pay by reason of any
such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the
Placement Agent within the meaning of Section 15 of the 1933 Act or Section 20
of the 1934 Act shall have the same rights to contribution as the Placement
Agent, and each director of the Company, each officer of the Company who signed
the Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall have the same rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto, shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the
18
Placement Agent or controlling person, or by or on behalf of the Company, and
shall survive delivery of the Securities to the Investors contemplated herein.
SECTION 9. Termination of Agreement.
(a) Termination; General. This Agreement and all obligations hereunder may
be terminated by the Placement Agent pursuant to Section 5(i) herein or by
either the Placement Agent or the Company for any reason upon giving ten (10)
days prior notice thereof to the other party. Upon termination of this
Agreement, the Company shall pay to the Placement Agent all fees earned and
reimburse the Placement Agent for all reasonable expenses as provided in Section
4(b). Notwithstanding any termination of or under this Agreement as provided
herein, the following Sections of this Agreement will survive any such
termination: Sections 1, 2, 4, 6, 7 and 10 through 12.
(b) Liabilities. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 2,
4, 6, 7 and 10 through 12 shall survive such termination and remain in full
force and effect.
SECTION 10. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Placement
Agent shall be directed to it at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇▇▇, (telecopier number ▇▇▇- ▇▇▇-▇▇▇▇) attention of ▇▇▇▇▇ ▇▇▇▇▇▇; and
notices to the Company shall be directed to it at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, attention of General Counsel, (telecopier number 617-234-6507).
SECTION 11. Parties. This Agreement shall each inure to the benefit of and
be binding upon the Placement Agent and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Placement Agent and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Placement Agent and the Company
and their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from the Placement
Agent shall be deemed to be a successor by reason merely of such purchase.
SECTION 12. Full Service Securities Firm. The Company acknowledges that
ThinkEquity is a full service securities firm and in the ordinary course of its
business, for the accounts of its customers, holds long or short positions in
securities or derivative securities (including options), which may include
securities or derivative securities relating to the Company. Nothing in this
Agreement shall be deemed to prohibit ThinkEquity from providing any services
permitted by applicable law to any third party or from engaging in any lawfully
permitted activity on its own behalf; provided, that, during the applicability
of this Agreement,
19
ThinkEquity may not, for its own account, hold short positions in securities or
derivative securities (including options) relating to the Company.
SECTION 13. Entire Agreement. This Agreement constitutes the entire
agreement and supersede all prior agreements and understandings, both written
and oral, between the parties with respect to the subject matter hereof,
including without limitation, that certain Engagement Letter, dated June 19,
2003, between the Company and ThinkEquity.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE. UNLESS OTHERWISE EXPLICITLY
PROVIDED, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein and
the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
20
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Placement Agent and the Company in accordance with its terms.
Very truly yours,
BIOPURE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
THINKEQUITY PARTNERS, LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------
Authorized Signatory
21
Exhibit A
FORM OF OPINION OF COMPANY'S OUTSIDE COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to the Placement Agency Agreement and the Purchase Agreement
or pursuant to reservations, agreements or employee benefit plans referred
to in the Prospectus or pursuant to the exercise of convertible securities
or options referred to in the Prospectus).
(ii) The Securities to be purchased by the Investors contemplated in
the Placement Agency Agreement from the Company have been duly authorized
for issuance and sale to such Investors pursuant to the Placement Agency
Agreement and the Purchase Agreement, respectively, and, when issued and
delivered by the Company pursuant to the Purchase Agreement, and against
payment of the consideration will be validly issued and fully paid and
non-assessable.
(iii) The issuance of the Securities is not subject to the preemptive
rights, rights of first refusal or other similar rights of any
securityholder of the Company under the Company's charter, bylaws or any
contract filed as an exhibit to the Registration Statement.
(iv) The Placement Agency Agreement has been duly authorized, executed
and delivered by the Company.
(v) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required
filing of the Prospectus pursuant to Rule 424(b) has been made in the
manner and within the time period required by Rule 424(b); and, to our
knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under
the 1933 Act and no proceedings for that purpose have been instituted or
are pending or to our knowledge threatened by the Commission.
(vi) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectus and each amendment or supplement
to the Registration Statement and the Prospectus as of their respective
effective or issue dates (other than the financial statements and
supporting schedules included therein or omitted therefrom, as to which no
opinion is rendered) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(vii) The documents incorporated by reference in the Prospectus (other
than the financial statements, supporting schedules and other financial
data included or
A-1
incorporated by reference therein or omitted therefrom and for statistical
information derived from such financial statements, supporting schedules or
other financial data, as to which no opinion is rendered), when they were
filed with the Commission, complied as to form, in all material respects,
with the requirements of the 1933 Act, the 1933 Regulations, the 1934 Act,
and the 1934 Act Regulations, as applicable.
(viii) The information in (A) the Prospectus (Registration No.
333-106288) under the captions "Description of Common Stock" and
"Description of Warrants", (B) the Registration Statement (Registration No.
333-106288) under the heading "Item 15 - Indemnification of Officers and
Directors", (C) the Company's Quarterly Report on Form 10-Q, for the
quarter ended April 30, 2003, under the heading "Part II - Item 5. Risk
Factors - Provisions of Our Restated Certificate of Incorporation and
By-Laws Could Impair or Delay Shareholders' Ability to Replace or Remove
Our Management and Could Discourage Takeover Transactions that a
Stockholder Might Consider to Be in Its Best Interest" and (D) the
Company's Quarterly Report on Form 10-Q, for the quarter ended January 31,
2003, under the heading "Part I - Item 2. Management's Discussion and
Analysis of Financial Condition and Results of Operations - Risk Factors -
Company Risks - Provisions of Our Restated Certificate of Incorporation and
By-Laws Could Impair or Delay Shareholders' Ability to Replace or Remove
Our Management and Could Discourage Takeover Transactions that a
Stockholder Might Consider to Be in Its Best Interest" to the extent that
it constitutes matters of law or summaries of legal matters, the Company's
charter and bylaws or legal proceedings provides a fair summary of such
matters.
(ix) All descriptions in the Prospectus of contracts and other
documents to which the Company or its subsidiaries are a party are accurate
in all material respects.
(x) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency (other than under the 1933 Act and the 1933 Act
Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need
express no opinion) is necessary or required in connection with the
authorization, execution and delivery of the Placement Agency Agreement for
the offering, issuance, sale or delivery of the Securities.
(xi) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
1940 Act.
A-2
Exhibit B
FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Placement Agency Agreement and the Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(iv) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to the Placement Agency Agreement and the Purchase Agreement
or pursuant to reservations, agreements or employee benefit plans referred
to in the Prospectus or pursuant to the exercise of convertible securities,
warrants or options referred to in the Prospectus or except as otherwise
set forth under the caption "Capitalization"); the shares of issued and
outstanding capital stock have been duly authorized and validly issued and
are fully paid and non-assessable. None of the outstanding shares of
capital stock of the Company was issued in violation of the preemptive
rights, rights of first refusal (except as alleged in the litigation
described in the Prospectus (Registration No. 333-106288) under the heading
"Recent Developments", as to which I make no statement) or other similar
rights of any securityholder of the Company.
(v) The issuance of the Securities is not subject to the preemptive
rights, rights of first refusal or other similar rights of any
securityholder of the Company.
(vi) The statements set forth in (A) the Prospectus (Registration No.
333-106288) under the heading "Risk Factors" and the captions "If We Fail
to Obtain FDA Approval We Cannot Market Hemopure in the United States", "We
Cannot Expand Indications for Our Products Unless We Receive FDA Approval
for Each Proposed Indication", "If We Fail to Comply with Good
Manufacturing Practices, We May Not be Able to Sell Our Products" and
"Stringent, Ongoing Government Regulation and Inspection of Our Products
Could Lead to Delays in the Manufacture, Marketing and Sale of Our
Products", (B) the Company's Quarterly Report on Form 10-Q, for the quarter
ended April 30, 2003, under the heading "Part I - Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Research and Development"
B-1
and under the heading "Part II- Item 5. Risk Factors" under the captions
"We Cannot Expand Indications for Our Products Unless We Receive FDA
Approval for Each Proposed Indication", "If We Fail to Comply with Good
Manufacturing Practices, We May Not be Able to Sell Our Products" and
"Stringent, Ongoing Government Regulation and Inspection of Our Products
Could Lead to Delays in the Manufacture, Marketing and Sale of Our
Products", (C) the Company's Quarterly Report on Form 10-Q, for the quarter
ended January 31, 2003, under the heading "Part I - Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Research and Development" and under the heading "Part I - Item 2.
Management's Discussion and Analysis of Financial Condition and Results of
Operations - Risk Factors - Company Risks" under the captions "We Cannot
Expand Indications for Our Products Unless We Receive FDA Approval for Each
Proposed Indication", "If We Fail to Comply with Good Manufacturing
Practices, We May Not be Able to Sell Our Products" and "Stringent, Ongoing
Government Regulation and Inspection of Our Products Could Lead to Delays
in the Manufacture, Marketing and Sale of Our Products" and (D) the
Company's Annual Report on Form 10-K, for the year ended October 31, 2002,
under the heading "Part I - Item 1. Business - Government Regulation"
insofar as such statements purport to describe or summarize applicable
provisions of the Federal Food, Drug, and Cosmetic Act and the regulations
promulgated thereunder, are accurate and compete in all material respects
and fairly present the information set forth therein.
(vii) the Company and its subsidiaries have obtained such licenses,
permits, approvals, and authorizations required by the U.S. Food and Drug
Administration (the "FDA") that are necessary for the conduct of the
business of the Company and its subsidiaries as currently conducted by them
and described in the Prospectus and to my knowledge such authorizations are
in effect.
(viii) To my knowledge, and except as described or incorporated by
reference in the Prospectus, there is not pending or threatened any lawsuit
or regulatory proceeding brought by or before the FDA, in which the Company
or any of its subsidiaries is or would be the defendant or respondent, nor
am I aware of any adverse judgment, decree, or order currently in effect
that has been issued by the FDA against the Company or any of its
subsidiaries.
(ix) To my knowledge, and except as described or incorporated by
reference in the Prospectus, there is not pending or threatened any action,
suit, proceeding, inquiry or investigation, to which the Company or any
subsidiary is a party, or to which the property of the Company or any
subsidiary is subject, before or brought by any court or governmental
agency or body, domestic or foreign, which might reasonably be expected to
result in a Material Adverse Effect, or which might reasonably be expected
to materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the Placement Agency
Agreement or the performance by the Company of its obligations thereunder.
(x) The information in (A) the Company's Annual Report on Form 10-K,
for the year ended October 31, 2002, under the heading "Part I - Item 3.
Legal Proceedings", and (B) the Company's Current Report on Form 8-K, dated
July 16, 2003, under the heading "Item 5. Other Events and Required FD
Disclosure" to the extent that it
B-2
constitutes matters of law or summaries of legal matters, the Company's
charter and bylaws or legal proceedings, provides a fair summary of such
matters.
(xi) To my knowledge, there are no statutes or regulations that are
required to be described in the Prospectus that are not described as
required.
(xii) All descriptions in the Prospectus of contracts and other
documents to which the Company or its subsidiaries are a party are accurate
in all material respects; to the best of my knowledge, there are no
franchises, contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments required to be described or referred to in the
Registration Statement or to be filed as exhibits thereto other than those
described or referred to therein or filed or incorporated by reference as
exhibits thereto, and the descriptions thereof or references thereto are
correct in all material respects.
(xiii) To my knowledge, neither the Company nor any subsidiary is in
violation of its charter or by-laws and no default by the Company or any
subsidiary exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement
or the Prospectus or filed or incorporated by reference as an exhibit to
the Registration Statement.
(xiv) The execution, delivery and performance of the Placement Agency
Agreement and the consummation of the transactions contemplated in the
Placement Agency Agreement and in the Prospectus (including the issuance
and sale of the Securities, and the use of the proceeds from the sale of
the Securities as described in the Prospectus under the caption "Use Of
Proceeds") and compliance by the Company with its obligations under the
Placement Agency Agreement do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a
breach of, or a default or a Repayment Event (as defined in Section
1(a)(xi) of the Placement Agency Agreement) under or result in the creation
or imposition of any lien, charge or encumbrance upon any property or
assets of the Company or any subsidiary pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or any other agreement or instrument, known to me, to which the Company or
any subsidiary is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any subsidiary is
subject (except for such conflicts, breaches or defaults or liens, charges
or encumbrances that would not have a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or
by-laws of the Company or any subsidiary, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to me, of any
government, government instrumentality or court having jurisdiction over
the Company or any subsidiary or any of their respective properties, assets
or operations.
(xv) To the best of my knowledge, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered
by the Company under the 1933 Act that have not been waived or exercised.
B-3
Nothing has come to my attention that would lead me to believe that
the Registration Statement or any amendment thereto, including the Rule
430A Information and Rule 434 Information (if applicable), (except for
financial statements and schedules and other financial data included
therein or omitted therefrom, as to which I make no statement), at the time
such Registration Statement or any such amendment became effective,
contained an 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 or any amendment
or supplement thereto (except for financial statements and schedules and
other financial data included therein or omitted therefrom, as to which I
make no statement), at the time the Prospectus was issued, at the time any
such amended or supplemented prospectus was issued or at the Closing Time,
included or includes an untrue statement of a material fact or omitted or
omits 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.
B-4
Table of Contents
Page
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SECTION 1. Representations and Warranties...............................2
(a) Representations and Warranties by the Company................2
(i) Compliance with Registration Requirements....................2
(ii) Incorporated Documents.......................................3
(iii) Independent Accountants......................................4
(iv) Financial Statements.........................................4
(v) No Material Adverse Change in Business.......................4
(vi) Good Standing of the Company.................................4
(vii) No Significant Subsidiaries..................................5
(viii) Capitalization...............................................5
(ix) Authorization of Agreement...................................5
(x) Authorization and Description of Securities..................5
(xi) Absence of Defaults and Conflicts............................5
(xii) Absence of Labor Dispute.....................................6
(xiii) Absence of Proceedings.......................................6
(xiv) Accuracy of Exhibits.........................................6
(xv) Possession of Intellectual Property..........................6
(xvi) Absence of Further Requirements..............................7
(xvii) Possession of Licenses and Permits...........................7
(xviii) Regulatory Matters...........................................7
(xix) Title to Property............................................8
(xx) Investment Company Act.......................................8
(xxi) Environmental Laws...........................................8
(xxii) Tax Returns..................................................9
(xxiii) Stock Exchange Listing.......................................9
(xxiv) No Price Stabilization or Manipulation.......................9
(xxv) Registration Rights..........................................9
(xxvi) NASD Matters.................................................9
(b) Officer's Certificates.......................................9
SECTION 2. Placement Agent Fees; Delivery...............................9
SECTION 3. Covenants of the Company....................................10
(a) Compliance with Securities Regulations and Commission
Requests....................................................10
(b) Filing of Amendments........................................11
(c) Delivery of Registration Statements.........................11
(d) Delivery of Prospectus......................................11
(e) Continued Compliance with Securities Laws...................11
(f) Blue Sky Qualifications.....................................12
(g) Rule 158....................................................12
(h) Use of Proceeds.............................................12
(i) Listing.....................................................12
i
Table of Contents
(continued)
Page
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(j) Reporting Requirements......................................12
(k) No Manipulation of Market for Securities....................12
(l) Additional Documents........................................13
SECTION 4. Payment of Expenses.........................................13
(a) Expenses....................................................13
(b) Termination of Agreement....................................14
SECTION 5. Conditions of the Placement Agent's Obligations.............14
(a) Effectiveness of Registration Statement.....................14
(b) Opinion of Outside Counsel for Company......................14
(c) Opinion of General Counsel for Company......................14
(d) Officers' Certificate.......................................14
(e) Accountant's Comfort Letter.................................15
(f) Bring-down Comfort Letter...................................15
(g) Listing.....................................................15
(h) Additional Documents........................................15
(i) Termination of Agreement....................................15
SECTION 6. Indemnification.............................................15
(a) Indemnification of Placement Agent..........................15
(b) Indemnification of Company, Directors and Officers..........16
(c) Actions against Parties; Notification.......................17
(d) Settlement without Consent if Failure to Reimburse..........17
SECTION 7. Contribution................................................17
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery....................................................19
SECTION 9. Termination of Agreement....................................19
(a) Termination; General........................................19
(b) Liabilities.................................................19
ii
Table of Contents
(continued)
Page
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SECTION 10. Notices.....................................................19
SECTION 11. Parties.....................................................19
SECTION 12. Full Service Securities Firm................................20
SECTION 13. Entire Agreement............................................20
SECTION 14. GOVERNING LAW AND TIME......................................20
SECTION 15. Effect of Headings..........................................20
SECTION 16. Counterparts................................................20
EXHIBITS
Exhibit A - Form of Opinion of Company's Outside Counsel...A-1
Exhibit B - Form of Opinion of Company's General Counsel...B-1