EXHIBIT 99.5
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[GRAPHIC OMITTED --
XXXXXX & RENSHAW LETTERHEAD]
May 3, 2007
CONFIDENTIAL
Xxxxx Xxxxxxx
Chief Operating Officer and Chief Financial Officer
Vasogen Inc.
0000 Xxxxxx Xxxxx, Xxxxx 00
Xxxxxxxxxxx, XX X0X 0X0
Xxxxxx
Dear Xx. Xxxxxxx:
This letter (the "AGREEMENT") constitutes the agreement between Xxxxxx &
Xxxxxxx, LLC ("R&R") and JMP Securities LLC ("JMP") and collectively the
"PLACEMENT AGENTS") and Vasogen Inc. (the "COMPANY"), that the Placement Agents
shall serve as the exclusive placement agents for the Company, on a "reasonable
best efforts" basis, in connection with the proposed placement of up to
$20,000,000 (the "PLACEMENT") of registered securities (the "SECURITIES") of
the Company, including shares (the "SHARES") in the capital of the Company's
Shares (the "COMMON SHARES") and warrants to purchase Common Shares, if
required to complete the Placement. The terms of such Placement and the
Securities shall be mutually agreed upon by the Company and the purchasers
(each, a "PURCHASER" and collectively, the "PURCHASERS") and nothing herein
constitutes that the Placement Agents, or either of them, would have the power
or authority to bind the Company or any Purchaser or an obligation for the
Company to issue any Securities or complete the Placement. This Agreement and
the documents executed and delivered by the Company and the Purchasers in
connection with the Placement shall be collectively referred to herein as the
"TRANSACTION DOCUMENTS." The date of the closing of the Placement shall be
referred to herein as the "CLOSING DATE." The Company expressly acknowledges
and agrees that the Placement Agents' obligations hereunder are on a reasonable
best efforts basis only and that the execution of this Agreement does not
constitute a commitment by either Placement Agent to purchase the Securities
and does not ensure the successful placement of the Securities or any portion
thereof or the success of either Placement Agent with respect to securing any
other financing on behalf of the Company.
SECTION 1. COMPENSATION AND OTHER FEES.
As compensation for the services provided by the Placement Agents
hereunder, the Company agrees to pay to the Placement Agents collectively:
The fees set forth below with respect to the Placement:
a) A cash fee payable immediately upon the closing of the Placement equal
to 6.25% of the aggregate gross proceeds raised in the Placement, such
aggregate percent to be allocated 5% to R&R and 1.25% to JMP; and
b) Warrants to purchase Common Shares equal to 6% of the aggregate number
of Shares sold in the Placement plus any Shares underlying any convertible
Securities or units sold in the Placement, but excluding warrants, if any,
issued to Purchasers in connection with the Placement; such aggregate
percent to be allocated 5% to R&R and 1% to
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5/3/2007
Page 2
JMP. Such warrants shall have the same terms as the warrants (if any)
issued to the Purchasers in the Placement except that such warrants shall
have term of 3 years, have an exercise price of 120% of the volume
weighted average price on the Nasdaq Capital Market on the day on which
the Placement is priced and shall not be transferable except as permitted
by NASD Rule 2710(g)(1).
(B) The Company also agrees to reimburse the Placement Agents'
combined expenses (with supporting invoices/receipts), up to a maximum of
$20,000. Such reimbursement shall be payable immediately upon (but only in the
event of) the closing of the Placement.
SECTION 2. REGISTRATION STATEMENT.
The Company represents and warrants to, and agrees with, the Placement Agents
that:
(A) The Company has filed with the US Securities and Exchange Commission
(the "COMMISSION") a registration statement on Form F-10 (Registration File
No.333-130578) under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), which became effective on January 5, 2006, for the registration under
the Securities Act of the Securities. At the time of such filing, the Company
met the requirements of Form F-10 under the Securities Act. Such registration
statement meets the requirements set forth in Form F-10 under the Securities
Act. The Company will file with the Commission pursuant to General Instruction
II.L of Form F-10, and the rules and regulations (the "RULES AND REGULATIONS")
of the Commission promulgated under the Securities Act, a supplement to the
form of prospectus included in such registration statement relating to the
placement of the Shares and the plan of distribution thereof and has advised
the Placement Agent of all further information (financial and other) with
respect to the Company required to be set forth therein. Such registration
statement, including the exhibits thereto, as amended at the date of this
Agreement, is hereinafter called the "REGISTRATION STATEMENT"; such prospectus
in the form in which it appears in the Registration Statement is hereinafter
called the "BASE PROSPECTUS"; and the supplemented form of prospectus, in the
form in which it will be filed with the Commission pursuant to General
Instruction II.L of Form F-10 (including the Base Prospectus as so
supplemented) is hereinafter called the "PROSPECTUS SUPPLEMENT." Any reference
in this Agreement to the Registration Statement, the Base Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the documents
incorporated by reference therein (the "INCORPORATED DOCUMENTS") pursuant to
Item 4 of Form F-10 which were filed under the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT"), on or before the date of this Agreement, or
the issue date of the Base Prospectus or the Prospectus Supplement, as the case
may be; and any reference in this Agreement to the terms "amend," "amendment"
or "supplement" with respect to the Registration Statement, the Base Prospectus
or the Prospectus Supplement shall be deemed to refer to and include the filing
of any document under the Exchange Act after the date of this Agreement, or the
issue date of the Base Prospectus or the Prospectus Supplement, as the case may
be, deemed to be incorporated therein by reference. All references in this
Agreement to financial statements and schedules and other information which is
"contained," "included," "described," "referenced," "set forth" or "stated" in
the Registration Statement, the Base Prospectus or the Prospectus Supplement
(and all other references of like import) shall be deemed to mean and include
all such financial statements and schedules and other information which is or
is deemed to be incorporated by reference in the Registration Statement, the
Base Prospectus or the Prospectus Supplement, as the case may be. No stop order
suspending the effectiveness of the Registration Statement or the use of the
Base Prospectus or the Prospectus Supplement has been issued, and no proceeding
for any such purpose is pending or has been initiated or, to the Company's
knowledge, is threatened by the Commission.
(B) The Registration Statement (and any further documents to be filed
with the Commission) contains all exhibits and schedules as required by the
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5/3/2007
Page 3
Securities Act. Each of the Registration Statement and any post-effective
amendment thereto, at the time it became effective, complied in all material
respects with the Securities Act and the Exchange Act and the applicable Rules
and Regulations and did not and, as amended or supplemented, if applicable,
will not, contain any 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. The Base Prospectus and the Prospectus Supplement, each
as of its respective date, comply or will comply in all material respects with
the Securities Act and the Exchange Act and the applicable Rules and
Regulations. Each of the Base Prospectus and the Prospectus Supplement, as
amended or supplemented, did not and will not contain as of the date thereof
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Incorporated
Documents, when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act and the applicable Canadian
securities laws, rules and regulations, and none of such documents, when they
were filed with the Ontario Securities Commission, contained any untrue
statement of a material fact or omitted to state a material fact necessary to
make the statements therein (with respect to Incorporated Documents
incorporated by reference in the Base Prospectus or Prospectus Supplement), in
light of the circumstances under which they were made not misleading; and any
further documents so filed and incorporated by reference in the Base Prospectus
or Prospectus Supplement, when such documents are filed with the Commission,
will conform in all material respects to the requirements of the Exchange Act
and the applicable Rules and Regulations, as applicable, and will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. No post-effective amendment to the
Registration Statement reflecting any facts or events arising after the date
thereof which represent, individually or in the aggregate, a fundamental change
in the information set forth therein is required to be filed with the
Commission. There are no documents required to be filed with the Commission in
connection with the transaction contemplated hereby that (x) have not been
filed as required pursuant to the Securities Act or (y) will not be filed
within the requisite time period. There are no contracts or other documents
required to be described in the Base Prospectus or Prospectus Supplement, or to
be filed as exhibits or schedules to the Registration Statement, which have not
been or will not be described or filed as required.
(C) The Company will as promptly as practicable deliver, to the
Placement Agents complete conformed copies of the Registration Statement and of
each consent and certificate of experts, as applicable, filed as a part
thereof, and conformed copies of the Registration Statement (without exhibits),
the Base Prospectus and the Prospectus Supplement, as amended or supplemented,
in such quantities and at such places as either Placement Agent reasonably
requests. Neither the Company nor any of its directors and officers has
distributed and none of them will distribute, prior to the Closing Date, any
offering material in connection with the offering and sale of the Common Shares
other than the Base Prospectus, the Prospectus Supplement, the Registration
Statement, copies of the documents incorporated by reference therein and any
other materials permitted by the Securities Act.
SECTION 3. REPRESENTATIONS AND WARRANTIES. Except as set forth under the
corresponding section of the Disclosure Schedules, which Disclosure Schedules
shall be deemed a part hereof, the Company hereby makes the representations and
warranties set forth below to the Placement Agents.
(A) ORGANIZATION AND QUALIFICATION. All of the direct and indirect
subsidiaries (individually, a "SUBSIDIARY") of the Company are set forth on
Schedule 3(A). The Company owns, directly or indirectly, all of the capital
shares or other equity interests of each Subsidiary free and clear of any
"LIENS" (which for purposes of this Agreement shall mean a lien, charge,
security interest, encumbrance, right of first refusal, preemptive right or
other restriction), and all the issued and outstanding shares of capital Shares
of each Subsidiary are validly issued and are fully paid, non-assessable and
free of preemptive and similar rights to subscribe for or purchase securities.
The Company and each of the Subsidiaries is an entity duly incorporated or
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5/3/2007
Page 4
otherwise organized, validly existing and, in the case of the Company, in
compliance with the applicable laws of Canada regarding its incorporation, and
in the case of the Subsidiaries, in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to
carry on its business as currently conducted. Neither the Company nor any
Subsidiary is in violation or default of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and the Subsidiaries
is duly qualified to conduct business and is in compliance or good standing, as
applicable, as a foreign corporation or other entity in each jurisdiction in
which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not have or reasonably be expected to
result in (i) a material adverse effect on the legality, validity or
enforceability of any Transaction Document, (ii) a material adverse effect on
the results of operations, assets, business, prospects or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a
material adverse effect on the Company's ability to perform in any material
respect on a timely basis its obligations under any Transaction Document (any
of (i), (ii) or (iii), a "MATERIAL ADVERSE EFFECT") and no "PROCEEDING" (which
for purposes of this Agreement shall mean any action, claim, suit,
investigation or proceeding (including, without limitation, an investigation or
partial proceeding, such as a deposition), whether commenced or threatened) has
been instituted in any such jurisdiction revoking, limiting or curtailing or
seeking to revoke, limit or curtail such power and authority or qualification.
(B) AUTHORIZATION; ENFORCEMENT. The Company has the requisite
corporate power and authority to enter into and to consummate the transactions
contemplated by each of the Transaction Documents and otherwise to carry out
its obligations hereunder and thereunder. The execution and delivery of each of
the Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary
action on the part of the Company and no further action is required by the
Company, its board of directors or its shareholders in connection therewith
other than in connection with the "REQUIRED APPROVALS" (as defined in
subsection 3(D) below). Each Transaction Document has been (or upon delivery
will have been) duly executed by the Company and, when delivered in accordance
with the terms hereof and thereof, will constitute the valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
(C) NO CONFLICTS. Subject to compliance with the terms of the warrants
(the "2005 WARRANTS") issued in connection with the convertible notes (the
"NOTES") issued on October 7, 2005 by Vasogen Ireland Limited, a wholly owned
subsidiary of the Company, the execution, delivery and performance of the
Transaction Documents by the Company, the issuance and sale of the Securities
and the consummation by the Company of the other transactions contemplated
hereby and thereby do not and will not (i) conflict with or violate any
provision of the Company's or any Subsidiary's certificate or articles of
incorporation, bylaws or other organizational or charter documents, or (ii)
conflict with, or constitute a default (or an event that with notice or lapse
of time or both would become a default) under, result in the creation of any
Lien upon any of the properties or assets of the Company or any Subsidiary, or
give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) subject to the Required Approvals (as
defined below), conflict with or result in a violation of any law, rule,
regulation, order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company or a Subsidiary is subject
(including applicable Canadian and US securities laws and regulations), or by
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5/3/2007
Page 5
which any property or asset of the Company or a Subsidiary is bound or
affected; except in the case of each of clauses (ii) and (iii), such as could
not have or reasonably be expected to result in a Material Adverse Effect.
(D) FILINGS, CONSENTS AND APPROVALS. The Company is not required to
obtain any consent, waiver, authorization or order of, give any notice to, or
make any filing or registration with, any court or other federal, state, local
or other governmental authority or other "PERSON" (defined as an individual or
corporation, partnership, trust, incorporated or unincorporated association,
joint venture, limited liability company, joint stock company, government (or
an agency or subdivision thereof) or other entity of any kind, including,
without limitation, any Trading Market (as defined below)) in connection with
the execution, delivery and performance by the Company of the Transaction
Documents, other than such filings or consents as are required to be made or
obtained under applicable US and Canadian securities laws, including
notification to the Toronto Stock Exchange (collectively, the "REQUIRED
APPROVALS").
(E) ISSUANCE OF THE SECURITIES; REGISTRATION. The Securities will be
duly authorized and, when issued and paid for in accordance with the applicable
Transaction Documents, will be duly and validly issued, fully paid and
nonassessable, free and clear of all Liens imposed by the Company other than
restrictions on transfer provided for in the Transaction Documents. The Company
has reserved or will have reserved prior to Closing, from its duly authorized
capital the maximum number of shares of Common Shares issuable pursuant to the
Transaction Documents. The issuance by the Company of the Securities will have
been registered under the Securities Act and all of the Securities will be
freely tradable by the Purchasers without restriction, subject to compliance
with the "control block distribution" of National Instrument 45-106--Prospectus
and Registration Exemptions and trading by Affiliates (as defined in Paragraph
3(H)) of the Company (other than any restrictions arising solely from an act or
omission of a Purchaser). The Securities are being issued pursuant to the
Registration Statement. The Registration Statement is effective and available
for the issuance of the Securities thereunder and the Company has not received
any notice that the Commission has issued or intends to issue a stop-order with
respect to the Registration Statement or that the Commission otherwise has
suspended or withdrawn the effectiveness of the Registration Statement, either
temporarily or permanently, or intends or has threatened in writing to do so.
The "Plan of Distribution" section under the Registration Statement permits the
issuance and sale of the Securities hereunder. Upon receipt of the Securities,
the Purchasers will have good and marketable title to such Securities and, as
of the Closing Date, the Securities will be freely tradable on the "TRADING
MARKET" (which, for purposes of this Agreement shall mean the following markets
or exchanges on which the Common Shares are listed or quoted for trading on the
date in question: the Nasdaq Capital Market, the Nasdaq Global Market or the
Toronto Stock Exchange).
(F) CAPITALIZATION. The capitalization of the Company is as set forth
on Schedule 3(F). The Company has not issued any Common Shares since its most
recent periodic report filed with the Ontario Securities Commission, other than
pursuant to the exercise of employee stock options under the Company's stock
option plans, the issuance of Common Shares to former directors under the
Company's Directors' Share Unit Plan and pursuant to the conversion or exercise
of securities exercisable, exchangeable or convertible into Common Shares
("COMMON SHARE EQUIVALENTS"). No Person has any right of first refusal,
preemptive right, right of participation, or any similar right to participate
in the transactions contemplated by the Transaction Documents. Except as a
result of the purchase and sale of the Securities, and as described in Schedule
3(F), there are no outstanding options, warrants, script rights to subscribe
to, calls or commitments of any character whatsoever relating to, or
securities, rights or obligations convertible into or exercisable or
exchangeable for, or giving any Person any right to subscribe for or acquire,
any Common Shares, or contracts, commitments, understandings or arrangements by
which the Company or any Subsidiary is or may become bound to issue additional
Common Shares or Common Share Equivalents. Subject to compliance with 2005
Warrants, the issuance and sale of the Securities will not obligate the Company
to issue shares of Common Shares or other securities to any Person (other than
the Purchasers) and will not result in a right of any holder of Company
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5/3/2007
Page 6
securities to adjust the exercise, conversion, exchange or reset price under
such securities. All of the outstanding Common Shares of the Company are
validly issued, fully paid and nonassessable, have been issued in compliance
with all applicable US and Canadian securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. Subject to obtaining Required
Approvals, no further approval or authorization of any Shareholder, the Board
of Directors of the Company or others will be required for the issuance and
sale of the Securities. There are no shareholders agreements, voting agreements
or other similar agreements with respect to the Company's Common Shares to
which the Company is a party or, to the knowledge of the Company, between or
among any of the Company's shareholders.
(G) SEC REPORTS; FINANCIAL STATEMENTS. The Company has complied in all
material respects with requirements to file all reports, schedules, forms,
statements and other documents required to be filed by it under the Securities
Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the
Company was required by law to file such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the "SEC REPORTS") on a timely basis
or has received a valid extension of such time of filing and has filed any such
SEC Reports prior to the expiration of any such extension. As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act and the rules and
regulations of the Commission promulgated thereunder, and none of the SEC
Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with Canadian generally accepted accounting
principles applied on a consistent basis during the periods involved ("GAAP"),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.
(H) MATERIAL CHANGES; UNDISCLOSED EVENTS, LIABILITIES OR DEVELOPMENTS.
Since the date of the latest audited financial statements included within the
SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has
been no event, occurrence or development that has had or that could reasonably
be expected to result in a Material Adverse Effect, (ii) the Company has not
incurred any liabilities (contingent or otherwise) other than (A) trade
payables and accrued expenses incurred in the ordinary course of business
consistent with past practice and (B) liabilities not required to be reflected
in the Company's financial statements pursuant to GAAP or required to be
disclosed in filings made with the Commission, (iii) the Company has not
altered its method of accounting, (iv) the Company has not declared or made any
dividend or distribution of cash or other property to its Shareholders or
purchased, redeemed or made any agreements to purchase or redeem any shares of
its Shares and (v) the Company has not issued any equity securities to any
officer, director or "Affiliate" (defined as any Person that, directly or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with a Person, as such terms are used in and construed
under Rule 144 under the Securities Act), except pursuant to existing Company
Shares option plans and Directors' Share Unit Plan. The Company does not have
pending before the Commission any request for confidential treatment of
information. Except for the issuance of the Securities contemplated by this
Agreement or as set forth on Schedule 3(H), no event, liability or development
has occurred or exists with respect to the Company or its Subsidiaries or their
respective business, properties, operations or financial condition, that would
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Page 7
be required to be disclosed by the Company under applicable securities laws at
the time this representation is made that has not been publicly disclosed 1
Trading Day prior to the date that this representation is made.
(I) LITIGATION. There is no action, suit, inquiry, notice of
violation, Proceeding or investigation pending or, to the knowledge of the
Company, threatened against or affecting the Company, any Subsidiary or any of
their respective properties before or by any court, arbitrator, governmental or
administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an "ACTION") which (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or
the Securities or (ii) could, if there were an unfavorable decision, have or
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, nor any director or officer thereof, is or has been
the subject of any Action involving a claim of violation of or liability under
applicable Canadian and US securities laws or a claim of breach of fiduciary
duty. There has not been, and to the knowledge of the Company, there is not
pending or contemplated, any investigation by the Commission involving the
Company or any current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Securities Act. None of the Company's
or its Subsidiaries' employees is a member of a union that relates to such
employee's relationship with the Company, and neither the Company nor any of
its Subsidiaries is a party to a collective bargaining agreement, and the
Company and its Subsidiaries believe that their relationships with their
employees are good. No executive officer, to the knowledge of the Company, is,
or is now expected to be, in violation of any material term of any employment
contract, confidentiality, disclosure or proprietary information agreement or
non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive
officer does not subject the Company or any of its Subsidiaries to any
liability with respect to any of the foregoing matters. The Company and its
Subsidiaries are in compliance with all U.S. federal, state, local and foreign
laws and regulations relating to employment and employment practices, terms and
conditions of employment and wages and hours, except where the failure to be in
compliance could not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(J) LABOR RELATIONS. No material labor dispute exists or, to the
knowledge of the Company, is imminent with respect to any of the employees of
the Company which could reasonably be expected to result in a Material Adverse
Effect.
(K) COMPLIANCE. Subject to bona fide disputes on contracts entered
into in the ordinary course of business, neither the Company nor any Subsidiary
(i) is in default under or in violation of (and no event has occurred that has
not been waived that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the Company or any
Subsidiary received notice of a claim that it is in default under or that it is
in violation of, any indenture, loan or credit agreement or any other agreement
or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal,
state and local laws applicable to its business and all such laws that affect
the environment, except in each case as could not reasonably be expected to
have a Material Adverse Effect.
(L) REGULATORY PERMITS. The Company and the Subsidiaries possess all
certificates, authorizations and permits issued by the appropriate federal,
state, local or foreign regulatory authorities necessary to conduct their
respective businesses as described in the SEC Reports, except where the failure
to possess such permits could not have or reasonably be expected to result in a
Material Adverse Effect ("MATERIAL PERMITS"), and neither the Company nor any
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Subsidiary has received any notice of proceedings relating to the revocation or
modification of any Material Permit.
(M) TITLE TO ASSETS. The Company and the Subsidiaries do not own any
real property and the Subsidiaries have good and marketable title in all
personal property owned by them that is material to the business of the Company
and the Subsidiaries, in each case free and clear of all Liens, except for
Liens as do not materially affect the value of such property and do not
materially interfere with the use made and proposed to be made of such property
by the Company and the Subsidiaries and Liens for the payment of federal, state
or other taxes, the payment of which is neither delinquent nor subject to
penalties. Any real property and facilities held under lease by the Company and
the Subsidiaries are held by them under valid, subsisting and enforceable
leases of which the Company and the Subsidiaries are in compliance.
(N) PATENTS AND TRADEMARKS. The Company and the Subsidiaries have, or
have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions,
copyrights, licenses and other similar intellectual property rights necessary
or material for use in connection with their respective businesses as described
in the SEC Reports and which the failure to so have could have a Material
Adverse Effect (collectively, the "INTELLECTUAL PROPERTY RIGHTS"). Neither the
Company nor any Subsidiary has received a notice (written or otherwise) that
the Intellectual Property Rights used by the Company or any Subsidiary violates
or infringes upon the rights of any Person. To the knowledge of the Company,
all such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights. The
Company and its Subsidiaries have taken reasonable security measures to protect
the secrecy, confidentiality and value of all of their intellectual properties,
except where failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
(O) INSURANCE. The Company and the Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the
Company and the Subsidiaries are engaged, including, but not limited to,
directors and officers insurance coverage. To the best knowledge of the
Company, such insurance contracts and policies are accurate and complete.
Neither the Company nor any Subsidiary has any reason to believe that it will
not be able to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be necessary
to continue its business without a significant increase in cost.
(P) TRANSACTIONS WITH AFFILIATES AND EMPLOYEES. Except as set forth in
the SEC Reports, none of the officers or directors of the Company and, to the
knowledge of the Company, none of the employees of the Company is presently a
party to any transaction with the Company or any Subsidiary (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any
such employee has a substantial interest or is an officer, director, trustee or
partner, other than (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company and
(iii) for other employee benefits, including Shares option agreements under any
stock option plan of the Company.
(Q) XXXXXXXX-XXXXX. The Company is in material compliance with all
provisions of the Xxxxxxxx-Xxxxx Act of 2002 which are applicable to it as of
the date hereof and will be as of the closing date of the Placement.
Vasogen, Inc.
5/3/2007
Page 9
(R) CERTAIN FEES. Except as otherwise provided in this Agreement, no
brokerage or finder's fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by the Transaction Documents. The Purchasers shall have no
obligation with respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this Section that
may be due in connection with the transactions contemplated by the Transaction
Documents.
(S) TRADING MARKET RULES. Subject to acceptance of notice of the
Placement by the Toronto Stock Exchange, the issuance and sale of the
Securities hereunder does not contravene the rules and regulations of the
Trading Market.
(T) INVESTMENT COMPANY. The Company is not, and is not an Affiliate
of, and immediately after receipt of payment for the Securities, will not be or
be an Affiliate of, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. The Company shall conduct its
business in a manner so that it will not become subject to the Investment
Company Act.
(U) REGISTRATION RIGHTS. Except as provided under the Registration
Rights Agreement dated October 7, 2005 as regards the 2005 Warrants, no Person
has any right to cause the Company to effect the registration under the
Securities Act of any securities of the Company.
(V) LISTING AND MAINTENANCE REQUIREMENTS. The Company's Common Shares
are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to
have the effect of, terminating the registration of the Common Shares under the
Exchange Act nor has the Company received any notification that the Commission
is contemplating terminating such registration. Except as publicly disclosed,
the Company has not, in the 12 months preceding the date hereof, received
notice from any Trading Market on which the Common Shares are or have been
listed or quoted to the effect that the Company is not in compliance with the
listing or maintenance requirements of such Trading Market. Except as publicly
disclosed, the Company is, and has no reason to believe that it will not in the
foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.
(W) APPLICATION OF TAKEOVER PROTECTIONS. As of the Closing Date, the
Company and its Board of Directors will have taken all necessary action, if
any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company's Certificate of
Incorporation (or similar charter documents) or the laws of its jurisdiction of
incorporation that is or could become applicable to the Purchasers as a result
of the Purchasers and the Company fulfilling their obligations or exercising
their rights under the Transaction Documents, including without limitation as a
result of the Company's issuance of the Securities and the Purchasers'
ownership of the Securities.
(X) SOLVENCY. Based on the financial condition of the Company as of
the Closing Date after giving effect to the receipt by the Company of the
proceeds from the sale of the Securities hereunder, (i) the Company's fair
saleable value of its assets exceeds the amount that will be required to be
paid on or in respect of the Company's existing debts and other liabilities
(including known contingent liabilities) as they mature; (ii) the Company's
assets do not constitute unreasonably small capital to carry on its business
for the current fiscal year as now conducted and as proposed to be conducted
including its capital needs taking into account the particular capital
requirements of the business conducted by the Company, and projected capital
requirements and capital availability thereof; and (iii) the current cash flow
of the Company, together with the proceeds the Company would receive, were it
to liquidate all of its assets, after taking into account all anticipated uses
of the cash, would be sufficient to pay all amounts on or in respect of its
Vasogen, Inc.
5/3/2007
Page 10
debt when such amounts are required to be paid. The Company does not intend to
incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be payable on or in respect of its
debt). Subject to the risks disclosed in the SEC reports, the Company has no
knowledge of any facts or circumstances which lead it to believe that it will
file for reorganization or liquidation under the bankruptcy or reorganization
laws of any jurisdiction within one year from the Closing Date. The SEC Reports
set forth as of the dates thereof all outstanding secured and unsecured
Indebtedness of the Company or any Subsidiary, or for which the Company or any
Subsidiary has commitments. For the purposes of this Agreement, "INDEBTEDNESS"
shall mean (a) any liabilities for borrowed money or amounts owed in excess of
$50,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in
respect of Indebtedness of others, whether or not the same are or should be
reflected in the Company's balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection
or similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $50,000 due under leases required to
be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary
is in default with respect to any Indebtedness.
(Y) TAX STATUS. Except for matters that would not, individually or in
the aggregate, have or reasonably be expected to result in a Material Adverse
Effect, the Company and each Subsidiary has filed all necessary federal, local
and foreign tax returns and has paid or accrued all taxes shown as due thereon,
and the Company has no knowledge of a tax deficiency which has been asserted or
threatened against the Company or any Subsidiary.
(Z) FOREIGN CORRUPT PRACTICES. Neither the Company, nor to the
knowledge of the Company, any agent or other person acting on behalf of the
Company, has (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to
foreign political activity, (ii) made any unlawful payment to foreign
government officials or employees or to any foreign political parties or
campaigns from corporate funds, (iii) failed to disclose fully any contribution
made by the Company (or made by any person acting on its behalf of which the
Company is aware) which is in violation of law, or (iv) violated in any
material respect any provision of the United States Foreign Corrupt Practices
Act of 1977, as amended.
(AA) ACCOUNTANTS. The Company's accountants are set forth on Schedule
3(AA) of the Disclosure Schedule. To the knowledge of the Company, such
accountants, who the Company expects will express their opinion with respect to
the financial statements to be included in the Company's next Annual Report on
Form 20F or 40F, are a registered public accounting firm as required by the
Securities Act.
(BB) REGULATION M COMPLIANCE. The Company has not, and to its knowledge
no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of any of
the Securities, (ii) sold, bid for, purchased, or, paid any compensation for
soliciting purchases of, any of the Securities (other than for the placement
agent's placement of the Securities), or (iii) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company.
(CC) APPROVALS. Subject to compliance with the requirements of the
Toronto Stock Exchange, the issuance and listing on the Nasdaq of the Shares
issuable pursuant to the Placement requires no further approvals, including but
not limited to, the approval of shareholders.
(DD) NASD AFFILIATIONS. There are no affiliations with any NASD member
firm among the Company's officers, directors or, to the knowledge of the
Company, any five percent (5%) or greater shareholder of the Company, except as
set forth in the Base Prospectus.
Vasogen, Inc.
5/3/2007
Page 11
(EE) ADDITIONAL SALES OF SECURITIES. The Company will not, for a period
of six (6) months following the final closing of the Placement, offer for sale
or sell any Securities unless, in the opinion of the Company's counsel, such
offer or sale does not jeopardize the availability of the exemption from the
registration requirements of the Securities Act or the registration or
qualification requirements of any state or foreign securities or blue sky laws
and regulations with respect to the Placement, to the extent any such exemption
has been relied upon.
SECTION 4. INDEMNIFICATION. The Company and the Placement Agents agree to the
indemnification and other agreements set forth in the Indemnification
Provisions (the "INDEMNIFICATION") attached hereto as Addendum A, the
provisions of which are incorporated herein by reference and shall survive the
termination or expiration of this Agreement.
SECTION 5. ENGAGEMENT TERM. The Placement Agents' engagement hereunder will
be for the period of 60 days. The engagement may be terminated by either the
Company or the Placement Agents at any time upon 10 days' written notice.
Notwithstanding anything to the contrary contained herein, the provisions
concerning confidentiality, indemnification, the Company's obligations to pay
fees and reimburse expenses and the Company's representations and warranties
contained herein as of the date made, where the Placement has been concluded,
and the Company's obligations contained in the Indemnification Provisions will
survive any expiration or termination of this Agreement..
SECTION 6. CONFIDENTIALITY. Each Placement Agent agrees not to use any
confidential information concerning the Company provided to it by the Company
for any purposes other than those contemplated under this Agreement, provided,
however, such confidential information shall not include any information (i)
already in our possession on a non-confidential basis prior to the date of its
disclosure to us by you, (ii) generally available to the public, or (iii) which
becomes available to us on a non-confidential basis from a third party who is
not bound by a confidentiality obligation with respect to such information; and
provided further that that such confidential information may be disclosed (a)
to the Placement Agents' officers, members, employees, agents, advisors and
representatives in connection with this Agreement who shall be informed of the
confidential nature of the information, (b) to any person with the Company's
written consent including to any prospective purchasers in an Placement, or (c)
if, upon the advice of counsel, the Placement Agents are compelled to disclose
such information. The Company agrees that any information or advice rendered by
either Placement Agent in connection with this engagement is for the
confidential use of the Company only in their evaluation of the Placement and,
except as otherwise required by law, the Company will not disclose or otherwise
refer to the advice or information in any manner without the applicable
Placement Agent's prior written consent.
SECTION 7. NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and
shall not be construed as creating rights enforceable by any person or entity
not a party hereto, except those entitled hereto by virtue of the
Indemnification Provisions hereof. The Company acknowledges and agrees that
each Placement Agent is not and shall not be construed as a fiduciary of the
Company and shall have no duties or liabilities to the equity holders or the
creditors of the Company or any other person by virtue of this Agreement or the
retention of either Placement Agent hereunder, all of which are hereby
expressly waived, except for a duty to act in good faith.
SECTION 8. AUTHORITY OF THE REPRESENTATIVE. JMP consents and agrees that R&R
will act as Representative of the Placement Agents under this Agreement and
with respect to the sale of the Securities. Accordingly, JMP authorizes R&R to
manage the Placement and the sale of the Securities and to take such action in
connection therewith as R&R in its sole discretion deems appropriate or
desirable, taking into account that the offering of the Securities will be in
the form of a best efforts placement and not a firm commitment underwriting.
Vasogen, Inc.
5/3/2007
Page 12
JMP agrees that any action taken under this Agreement by the Representative
shall be binding upon all of the Placement Agents.
SECTION 9. OTHER ACTIVITIES. The Company understands and acknowledges that
the Placement Agents are full service securities firms and may from time to
time provide financial advice to other entities in the same or other industries
as the Company or to potential investors in the Placement. The Company hereby
acknowledges and agrees to waive the potential conflicts of interest that may
be deemed to arise from such relationships, provided that the Placement Agents
shall continue to have a duty to act in good faith in respect of the Company.
SECTION 10. PUBLICITY. The Company agrees that the Placement Agents have the
right to publicize the involvement in a transaction and place "tombstones" at
such Placement Agents' expense describing the services hereunder. If one or
both of the Placement Agents request, the Company will include a mutually
acceptable reference to the Placement Agents in the press release or other
public announcement by the Company regarding the transaction.
SECTION 11. CLOSING. The obligations of the Placement Agents and the
Purchasers, and the closing of the sale of the Securities hereunder are subject
to the accuracy, when made and on the Closing Date, of the representations and
warranties on the part of the Company contained herein, to the accuracy of the
statements of the Company made in any certificates pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder, and to
each of the following additional terms and conditions:
(A) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been initiated or threatened by the Commission, and any request for additional
information on the part of the Commission (to be included in the Registration
Statement, the Base Prospectus or the Prospectus Supplement or otherwise) shall
have been complied with to the reasonable satisfaction of the Placement Agents.
Any filings required to be made by the Company in connection with the
Registration Statement, the Base Prospectus or the Prospectus Supplement shall
have been timely filed with the Commission.
(B) The Placement Agents shall not have discovered and disclosed to
the Company on or prior to the Closing Date that the Registration Statement,
the Base Prospectus or the Prospectus Supplement or any amendment or supplement
thereto contains an untrue statement of a fact which, in the opinion of counsel
for the Placement Agents, is material or omits to state any fact which, in the
opinion of such counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(C) All corporate proceedings and other legal matters incident to the
authorization, form, execution, delivery and validity of each of this
Agreement, the Securities, the Registration Statement, the Base Prospectus and
the Prospectus Supplement and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be reasonably
satisfactory in all material respects to counsel for the Placement Agents, and
the Company shall have furnished to such counsel all documents and information
that they may reasonably request to enable them to pass upon such matters.
(D) The Placement Agents shall have received from outside counsel to
the Company such counsel's written opinion, addressed to the Placement Agents
and the Purchasers dated as of the Closing Date, in form and substance
reasonably satisfactory to the Placement Agent, which opinion shall include a
"10b-5" representation from such counsel in the form attached as Addendum B.
Vasogen, Inc.
5/3/2007
Page 13
(E) (i) Neither the Company nor any of its Subsidiaries shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Base Prospectus, any loss or interference with
its business from fire, explosion, flood, terrorist act or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth in or
contemplated by the Base Prospectus and (ii) except for repayment of debt under
the Notes and related Common Share issuances, the appointment of a new CEO, the
share consolidation effective April 17, 2007 and the completion of a license
and distribution agreement with Grupo Xxxxxx International, S.A., since the
date of the latest audited financial statements included or incorporated by
reference in the Base Prospectus there shall not have been any change in the
share capital or long-term debt of the Company or any of its Subsidiaries or
any change, or any development involving a prospective change, in or affecting
the business, general affairs, management, financial position, shareholders'
equity, results of operations or prospects of the Company and its Subsidiaries,
otherwise than as set forth in or contemplated by the Base Prospectus, the
effect of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Placement Agents, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of the
Securities on the terms and in the manner contemplated by the Base Prospectus
and the Prospectus Supplement.
(F) The Common Shares are registered under the Exchange Act and, as of
the Closing Date, the Shares issuable pursuant to the Placement shall be listed
and admitted and authorized for trading on Nasdaq, and satisfactory evidence of
such actions shall have been provided to the Placement Agents. Except as
publicly disclosed, the Company shall have taken no action designed to, or
likely to have the effect of terminating the registration of the Common Shares
under the Exchange Act or delisting or suspending from trading the Common
Shares from the NASDAQ Capital Market or the Toronto Stock Exchange nor has the
Company received any information suggesting that the Commission or Nasdaq is
contemplating terminating such registration or listing.
(G) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the Nasdaq Global Market, the NASDAQ
Capital Market or the American Stock Exchange or in the over-the-counter
market, or trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum or maximum prices
or maximum ranges for prices shall have been established on any such exchange
or such market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by federal or state authorities or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States, (iii) the United States shall have
become engaged in hostilities in which it is not currently engaged, the subject
of an act of terrorism, there shall have been an escalation in hostilities
involving the United States, or there shall have been a declaration of a
national emergency or war by the United States, or (iv) there shall have
occurred any other calamity or crisis or any change in general economic,
political or financial conditions in the United States or elsewhere, if the
effect of any such event in clause (iii) or (iv) makes it, in the sole judgment
of the Placement Agents, impracticable or inadvisable to proceed with the sale
or delivery of the Securities on the terms and in the manner contemplated by
the Base Prospectus and the Prospectus Supplement.
(H) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental agency
or body which would, as of the Closing Date, prevent the issuance or sale of
the Securities or materially and adversely affect or potentially and adversely
affect the business or operations of the Company; and no injunction,
restraining order or order of any other nature by any federal or state court of
competent jurisdiction shall have been issued as of the Closing Date which
would prevent the issuance or sale of the Securities or materially and
adversely affect or potentially and adversely affect the business or operations
of the Company.
Vasogen, Inc.
5/3/2007
Page 14
(I) The Company shall have prepared and filed with the Commission a
Current Report on Form 6-K with respect to the Placement, including as an
exhibit thereto this Agreement.
(J) The Company shall have entered into subscription agreements with
each of the Purchasers and such agreements shall be in full force and effect
and shall contain representations and warranties of the Company as agreed
between the Company and the Purchasers.
(K) The NASD shall have raised no objection to the fairness and
reasonableness of the terms and arrangements of this Agreement. In addition,
the Company shall, if requested by the Placement Agents, make or authorize
Placement Agent's counsel to make on the Company's behalf, an Issuer Filing
with the NASDR, Inc. Corporate Financing Department pursuant to NASD Rule 2710
with respect to the Registration Statement and pay all filing fees required in
connection therewith.
(L) Prior to the Closing Date, the Company shall have furnished to the
Placement Agents such further information, certificates and documents as the
Placement Agents may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably
satisfactory to counsel for the Placement Agent.
SECTION 12. GOVERNING LAW. This Agreement will be governed by, and construed
in accordance with, the laws of the State of New York applicable to agreements
made and to be performed entirely in such State. This Agreement may not be
assigned by either party without the prior written consent of the other party.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto, and their respective successors and permitted assigns. Any right to
trial by jury with respect to any dispute arising under this Agreement or any
transaction or conduct in connection herewith is waived. Any dispute arising
under this Agreement may be brought into the courts of the State of New York or
into the Federal Court located in New York, New York and, by execution and
delivery of this Agreement, the Company hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of
aforesaid courts. Each party hereto hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or
proceeding by delivering a copy thereof via overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to it under
this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. If either party shall commence an action or proceeding to
enforce any provisions of a Transaction Document, then the prevailing party in
such action or proceeding shall be reimbursed by the other party for its
attorneys fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
SECTION 13. ENTIRE AGREEMENT/MISC. This Agreement (including the attached
Indemnification Provisions) embodies the entire agreement and understanding
between the parties hereto and supersedes all prior agreements and
understandings relating to the subject matter hereof. If any provision of this
Agreement is determined to be invalid or unenforceable in any respect, such
determination will not affect such provision in any other respect or any other
provision of this Agreement, which will remain in full force and effect. This
Agreement may not be assigned, amended or otherwise modified or waived except
by an instrument in writing signed by both Placement Agents and the Company.
The representations, warranties, agreements and covenants contained herein
shall survive the closing of the Placement and delivery and/or exercise of the
Securities, as applicable. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
Vasogen, Inc.
5/3/2007
Page 15
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or a .pdf format file, such signature shall
create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile signature page were an original thereof.
SECTION 14. NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
specified on the signature pages attached hereto prior to 6:30 p.m. (New York
City time) on a business day, (b) the next business day after the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile number on the signature pages attached hereto on a day that is not a
business day or later than 6:30 p.m. (New York City time) on any business day,
(c) the business day following the date of mailing, if sent by U.S. nationally
recognized overnight courier service, or (d) upon actual receipt by the party
to whom such notice is required to be given. The address for such notices and
communications shall be as set forth on the signature pages hereto.
Vasogen, Inc.
5/3/2007
Page 16
Please confirm that the foregoing correctly sets forth our agreement by signing
and returning to R&R the enclosed copy of this Agreement.
Very truly yours,
XXXXXX & XXXXXXX, LLC JMP SECURITIES LLC.
By: /s/ Xxxxxx X. Xxxxx By:/s/ Xxxxxx Xxxx
------------------------ ---------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxx Xxxx
Title: Chief Financial Officer Title: Co-President & Director
of Investment Banking
ADDRESS FOR NOTICE: ADDRESS FOR NOTICE:
------------------- ------------------
1270 Avenue of the Americas, 16th Floor 000 Xxxxxxxxxx Xxxxxx
Xxx Xxxx, XX, 00000 Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Accepted and Agreed to as of
the date first written above:
VASOGEN INC.
By: /s/ Xxxxxxxxxx Xx Xxxx
----------------------------
Name: Xxxxxxxxxx Xx Xxxx
Title: V.P., Corporate and
Legal Affairs
ADDRESS FOR NOTICE:
[GRAPHIC OMITTED --
XXXXXX & RENSHAW LETTERHEAD]
ADDENDUM A
INDEMNIFICATION PROVISIONS
In connection with the engagement of Xxxxxx & Xxxxxxx, LLC ("R&R") and
JMP Securities LLC ("JMP") by Vasogen Inc. (the "COMPANY") pursuant to a letter
agreement dated May 2, 2007, between the Company, R&R and JMP, as it may be
amended from time to time in writing (the "AGREEMENT"), the Company, R & R and
JMP (collectively the "Placement Agents"), hereby agree as follows:
1. To the extent permitted by law, the Company will indemnify each Placement
Agent and their respective affiliates, shareholders, directors, officers,
employees and controlling persons (within the meaning of Section 15 of the
Securities Act of 1933, as amended, or Section 20 of the Securities
Exchange Act of 1934) against all losses, claims, damages, expenses and
liabilities, as the same are incurred (including the reasonable fees and
expenses of counsel), relating to or arising out of its activities
hereunder or pursuant to the Agreement, except to the extent that any
losses, claims, damages, expenses or liabilities (or actions in respect
thereof) are found in a final judgment (not subject to appeal) by a court
of law to have resulted primarily and directly from such Placement Agent's
willful misconduct or gross negligence in performing the services
described in the Agreement. In no event will any Placement Agent be liable
or obligated in any manner for any consequential, exemplary or punitive
damages or lost profits arising out of the Agreement or any services
provided thereunder and the Company agrees not to seek or claim any such
damages or lost profits in any circumstances.
2. Promptly after receipt by a Placement Agent of notice of any claim or the
commencement of any action or proceeding with respect to which such
Placement Agent is entitled to indemnity hereunder, such Placement Agent
will notify the Company in writing of such claim or of the commencement of
such action or proceeding, and the Company will assume the defense of such
action or proceeding and will employ counsel reasonably satisfactory to
such Placement Agent or Placement Agents and will pay the reasonable fees
and expenses of such counsel provided, however, that any Placement Agent
may at its own expense retain separate counsel to participate in such
defense. The failure to notify the Company shall not relieve the Company
from any obligation hereunder unless, and only to the extent that, such
omission results in the forfeiture of substantive rights or defenses.
Notwithstanding the preceding sentence, the Placement Agents will be
entitled to employ one counsel separate from counsel for the Company and
from any other party in such action if (i) counsel for the Placement
Agent(s) reasonably determines that it would be inappropriate under the
applicable rules of professional responsibility for the same counsel to
represent both the Company and the Placement Agent(s), (ii) there are or
may be legal defenses available to such Placement Agent(s) or to other
Placement Agent(s) that are different from or additional to those
available to us, or (iii) a conflict may arise between the positions of
the Placement Agent(s) and the Company in conducting the defense of any
such action that would make such separate representation advisable. In
such event, the reasonable fees and disbursements of no more than one such
separate counsel will be paid by the Company. The Company will have the
exclusive right to settle the claim or proceeding provided that the
Company will not settle any such claim, action or proceeding without the
prior written consent of any affected Placement Agent, which will not be
unreasonably withheld.
3. The Company agrees to notify the Placement Agents promptly of the
assertion against it or any other person of any claim or the commencement
of any action or proceeding relating to a transaction contemplated by the
Agreement.
4. If for any reason the foregoing indemnity is unavailable to the affected
Placement Agent(s) or insufficient to hold the affected Placement Agent(s)
harmless, then the Company shall contribute to the amount paid or payable
by the Placement Agents as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect not only the
relative benefits received by the Company on the one hand and the
respective Placement Agent(s) on the other, but also the relative fault of
the Company on the one hand and the Placement Agents on the other that
resulted in such losses, claims, damages or liabilities, as well as any
relevant equitable considerations. The amounts paid or payable by a party
in respect of losses, claims, damages and liabilities referred to above
shall be deemed to include any reasonable legal or other fees and expenses
incurred in defending any litigation, proceeding or other action or claim.
Notwithstanding the provisions hereof, each Placement Agent's share of the
liability hereunder shall not be in excess of the amount of fees actually
received, or to be received, by such Placement Agent under the Agreement
(excluding any amounts received as reimbursement of expenses incurred by
such Placement Agent).
5. The rights accorded to the Placement Agent(s) hereunder shall be in
addition to any rights that any Placement Agent(s) may have at common law,
by separate agreement or otherwise. If any provision hereof shall be
determined to be invalid or unenforceable in any respect, such
determination shall not affect such provision in any other respect or any
other provision of this agreement, which shall remain in full force and
effect. Each Placement Agent is an intended beneficiary hereunder. The
foregoing Indemnification Agreement shall remain in effect indefinitely
notwithstanding any expiration or termination of the Agreement.
6. These Indemnification Provisions shall remain in full force and effect
whether or not the transaction contemplated by the Agreement is completed
and shall survive the termination of the Agreement, and shall be in
addition to any liability that the Company might otherwise have to any
indemnified party under the Agreement or otherwise.
JMP SECURITIES LLC XXXXXX & XXXXXXX, LLC
By: /s/ Xxxxxx Xxxx By: /s/ Xxxxxx X. Xxxxx
---------------------------- --------------------------
Name: Xxxxxx Xxxx Name: Xxxxxx X. Xxxxx
Title: Co-President and Director Title: Chief Financial
of Investment Banking Officer
Accepted and Agreed to as of
the date first written above:
VASOGEN, INC.
By: /s/ Xxxxxxxxxx Xx Xxxx
----------------------------
Name: Xxxxxxxxxx Xx Xxxx
Title: V.P., Corporate and
Legal Affairs
ADDENDUM B
000-000-0000
000-000-0000
May __, 2007
Xxxxxx & Xxxxxxx, LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
JMP Securities Inc.
Ladies and Gentlemen:
We have acted as special United States counsel to Vasogen Inc., a corporation
incorporated under the CANADA BUSINESS CORPORATIONS ACT (the "Company"), in
connection with the Securities Purchase Agreement, dated May __, 2007, among
the purchasers identified on the signature pages thereto (each a "Purchaser,"
and collectively, the "Purchasers"), for whom you are acting as representative,
and the Company, relating to the issuance and sale to the Purchasers by the
Company of the Company's common shares, no par value (the "Common Shares"), and
warrants which are exercisable to purchase Common Shares (the "Warrants," and
together with the Common Shares, the "Securities"). This letter is being
furnished at the request of the Company in connection with Section 8(D) of the
Engagement Letter, dated May __, 2007 (the "Engagement Letter"), between you
and the Company. Capitalized terms used and not otherwise defined in this
letter have the respective meanings given those terms in the Engagement Letter.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form F-10 (File No. 333-130578) under
the Securities Act of 1933, as amended (the "Act"). The Registration Statement
was filed on December 21, 2005, and was amended on January 5, 2006. The
Registration Statement was declared effective by the Commission on January 5,
2006 (the "Effective Date"). The Base Prospectus, dated January 5, 2006, as
supplemented by the Prospectus Supplement dated [May __, 2007,] together with
the documents incorporated by reference therein, are referred to, collectively,
as the "U.S. Final Prospectus." The U.S. Final Prospectus has been filed
pursuant to General Instruction II.L of Form F-10 and has been made in the
manner and within the time period required by said General Instruction II.L.
We have been advised orally by the staff of the Commission that no stop order
suspending the effectiveness of the Registration Statement has been issued, and
to our knowledge no proceedings for that purpose have been initiated or are
pending or are threatened by the Commission.
The primary purpose of our professional engagement was not to establish factual
matters or financial, accounting or statistical information. In addition, many
determinations involved in the preparation of the Registration Statement, the
U.S. Final Prospectus and the documents incorporated by reference therein are
of a wholly or partially non-legal character or relate to legal matters outside
the scope of this letter. Furthermore, the limitations inherent in the
independent verification of factual matters and in the role of outside counsel
are such that we have not undertaken to independently verify, and cannot and do
not assume responsibility for the accuracy, completeness or fairness of, the
statements contained in the Registration Statement, the U.S. Final Prospectus
or the documents incorporated by reference therein.
In the course of acting as special United States counsel to the Company in
connection with the offering of the Securities, we have participated in the
preparation of the Registration Statement and the U.S. Final Prospectus and in
conferences and telephone conversations with officers and other representatives
of the Company and the independent registered public accountants for the
Company during which conferences and conversations the contents of the
Registration Statement, the U.S. Final Prospectus and related matters were
discussed. Based upon such participation (and relying as to materiality with
respect to factual matters to the extent we deemed reasonable on officers,
employees and other representatives of the Company and its subsidiaries), we
hereby advise you that our work in connection with this matter did not disclose
any information that gave us reason to believe that (A) at its Effective Date,
the Registration Statement (other than the financial statements, financial
statement schedules and other financial data included or incorporated by
reference therein or omitted therefrom or from those documents incorporated by
reference, as to which we express no such belief) contained an untrue statement
of a material fact or omitted to state a material fact necessary to make the
statements therein not misleading, or (B) at the time the U.S. Final Prospectus
was issued or at the Closing Date, the U.S. Final Prospectus (other than the
financial statements, financial statement schedules and other financial data
included or incorporated by reference therein or omitted therefrom or from
those documents incorporated by reference, as to which we express no such
belief) contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. We do not know of any
contract or other document which is required to be filed as an exhibit to the
Registration Statement.
This letter is furnished by us solely for your benefit in connection with the
transactions referred to in the Engagement Letter and may not be used,
circulated to, or relied upon by any other person without our prior written
consent.
Very truly yours,
XXXX, XXXXX, RIFKIND, XXXXXXX & XXXXXXXX LLP
