PLACEMENT AGENCY AGREEMENT
January __, 2002
[__________]
[__________]
[__________]
Ladies and Gentlemen:
INTRODUCTORY. EPIX Medical, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions herein, to issue and
sell an aggregate of [__________] (the "Shares") of its common stock, par value
$[_____] per share (the "Common Stock") to certain investors (collectively, the
"Investors"). The Company hereby confirms its agreement with the Placement Agent
as follows:
SECTION 1. AGREEMENT TO ACT AS PLACEMENT AGENT.
On the basis of the representations, warranties and
agreements of the Company herein contained, and subject to all the terms and
conditions of this Agreement between the Company and [__________]
("[__________]") and the engagement letter dated [__________], a copy of
which is attached hereto as EXHIBIT A (other than the indemnification letter
attached thereto, which is superseded in its entirety by this Agreement (the
"Engagement Letter"), [__________]shall be the Company's exclusive placement
agent (in such capacity, the "Placement Agent"), on a reasonable efforts
basis, in connection with the issuance and sale by the Company of the Shares
to the Investors (the "Offering"). As compensation for services rendered, and
provided that any of the Shares are sold to Investors pursuant to the
purchase agreements in the form included as EXHIBIT B hereto (the "Purchase
Agreements") on the Closing Date (as defined below), the Company shall pay to
the Placement Agent as fees in connection with the Offering as set forth in
the Engagement Letter by wire transfer of immediately available funds to an
account or accounts designated by the Placement Agent, an amount equal to 6%
of the gross proceeds received by the Company from the sale of the Shares at
a price of $____ per share.
This Agreement shall not give rise to any commitment by the
Placement Agent to purchase any of the Shares, and the Placement Agent shall
have no authority to bind the Company. The Placement Agent may retain other
brokers or dealers to act as sub-agents on their behalf in connection with the
Offering.
SECTION 2. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE COMPANY.
The Company hereby represents, warrants and covenants to each
Placement Agent as follows:
(a) SECURITIES LAW FILINGS. The Company meets the requirements for use
of Form S-3 under the Securities Act of 1933, as amended (the "Act") and has
filed with the Securities and Exchange Commission (the "Commission") a
registration statement on such Form (Registration File No. 333-
41782), which has become effective, for the registration under the Act of the
Shares. Such registration statement meets the requirements set forth in Rule
415(a)(1)(x) under the Act and complies in all other material respects with said
Rule. The Company will file with the Commission pursuant to Rule 424(b) under
the Act a supplement to the form of prospectus included in such registration
statement relating to a 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 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 "Basic Prospectus"; and the supplemented form of
prospectus related to the Offering, in the form in which it will be filed with
the Commission pursuant to Rule 424(b) (including the Basic Prospectus as so
supplemented) is hereinafter called the "Prospectus Supplement". Any reference
herein to the Registration Statement, the Basic 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 12 of Form S-3
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 Basic Prospectus or Prospectus Supplement, as the case may be; and any
reference herein to the terms "Amend", "Amendment" or "Supplement" with respect
to the Registration Statement, the Basic 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 Basic
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"
or "stated" in the Registration Statement 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 or the Prospectus
Supplement, as the case may be.
(b) NO STOP ORDER. No stop order suspending the effectiveness of the
Registration Statement or the use of the Basic Prospectus or the Prospectus
Supplement has been issued and no proceeding for that purpose has been initiated
or, to the Company's knowledge, threatened by the Commission.
(c) PROSPECTUS SUPPLEMENT. (i) From the time of its filing until the
closing of the Offering, no order preventing or suspending the use of the
Prospectus Supplement will have been issued by the Commission, and (ii) the
Prospectus Supplement, at the time of filing thereof, will conform in all
material respects to the requirements of the Act and the rules and regulations
of the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(d) COMPLIANCE WITH APPLICABLE REGULATIONS. The Registration Statement
(and any further documents to be filed with the Commission related to or in
connection with the Offering) contain all exhibits as required by the Act. Each
of the Registration Statement and any post-effective amendment thereto relating
to the Offering, at the time it became effective complied in all material
respects with the Act and the Exchange Act and did not and 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.
Each of the Basic Prospectus and the Prospectus Supplement, as of its date,
complied in all material respects with the Act and the Exchange Act. Each of the
Basic Prospectus and the Prospectus Supplement, as amended or supplemented, ,
did not and will not contain as of the effective 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 none of such documents, when they were filed with the
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Commission, contained any untrue statement of a material fact or omitted to
state a material fact necessary to make the statements therein not misleading;
and any further documents so filed and incorporated by reference in the Basic
Prospectus or Prospectus Supplement related to or in connection with the
Offering, when such documents are filed with the Commission will conform in all
material respects to the requirements of the Exchange Act, 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 not misleading.
Notwithstanding the foregoing, the Company makes no representations or
warranties as to the information contained in or omitted from the Registration
Statement, the Basic Prospectus, the Prospectus Supplement or the Incorporated
Documents or any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or on behalf
of the Placement Agent specifically for use in the Registration Statement or the
Prospectus Supplement. No post-effective amendment to the Registration Statement
reflects any facts or events arising after the effective date thereof which
represent, individually or in the aggregate, a fundamental change in the
information set forth therein.
(e) REPORTS AND DOCUMENTS, ETC. There are no documents required to be
filed with the Commission in connection with the Prospectus Supplement that have
not been filed as required pursuant to the Act. There are no contracts or other
documents required to be described in the Prospectus Supplement, or to be filed
as exhibits to the Registration Statement, which have not been described or
filed as required.
(f) OFFERING MATERIALS FURNISHED TO THE PLACEMENT AGENT. The Company
has delivered, or will as promptly as practicable deliver, to the Placement
Agent complete conformed copies of the Registration Statement and of each
consent and certificate of experts filed as a part thereof, and conformed copies
of the Registration Statement (without exhibits) and the Basic Prospectuses and
the Prospectus Supplement, as amended or supplemented, in such quantities and at
such places as the Placement Agent reasonably requests.
(g) DISTRIBUTION OF OFFERING MATERIAL BY THE COMPANY. The Company has
not distributed and will not distribute, prior to the completion of the
distribution of the Shares, any offering material in connection with the
offering and sale of the Shares other than Basic Prospectus and the Prospectus
Supplement or the Registration Statement. For the avoidance of doubt, any other
material prepared and distributed solely by the Placement Agent is not deemed to
be distributed by the Company for purposes of this paragraph (g).
(h) THE PLACEMENT AGENCY AGREEMENT. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding agreement of,
the Company, enforceable against the Company in accordance with its terms,
except as rights to indemnification and contribution hereunder may be limited by
applicable law and except as the enforcement hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles.
(i) AUTHORIZATION OF THE SHARES. The Shares have been duly authorized
for issuance by the Company and sale and, when issued and delivered by the
Company against payment therefor pursuant to this Agreement, will be validly
issued, fully paid and nonassessable.
(j) NO APPLICABLE REGISTRATION OR OTHER SIMILAR RIGHTS. There are no
persons with registration or other similar rights to have any equity or debt
securities registered or qualified for sale under the Registration Statement or
the Prospectus Supplement or included in the offering contemplated by this
Agreement, except for such rights as have been duly waived.
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(k) NO MATERIAL ADVERSE CHANGE. Subsequent to the respective dates as
of which information is given in the Prospectus Supplement: (i) there has been
no material adverse change, or any development that could reasonably be expected
to result in a material adverse change or effect, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects, whether or not
arising from transactions in the ordinary course of business, of the Company and
its subsidiaries, considered as one entity (any such change or effect, where the
context so requires, is called a "Material Adverse Change" or a "Material
Adverse Effect"); (ii) the Company and its subsidiaries, considered as one
entity, have not incurred any material liability or obligation, indirect, direct
or contingent, not in the ordinary course of business nor entered into any
material transaction or agreement not in the ordinary course of business; and
(iii) there has been no dividend or distribution of any kind declared, paid or
made by the Company or, except for dividends paid to the Company or other
subsidiaries, any of its subsidiaries on any class of capital stock or
repurchase or redemption by the Company or any of its subsidiaries of any class
of capital stock.
(l) INDEPENDENT ACCOUNTANTS. Ernst & Young, LLP, who have expressed
their opinion with respect to the financial statements (which term as used in
this Agreement includes the related notes thereto) and supporting schedules
filed with the Commission as a part of the Registration Statement and
incorporated by reference in the Prospectus Supplement, are independent public
or certified public accountants as required by the Act and the Exchange Act.
(m) PREPARATION OF THE FINANCIAL STATEMENTS. The financial statements
filed with the Commission as a part of the Registration Statement or included or
incorporated by reference in the Prospectus Supplement present fairly in all
material respects the consolidated financial position of the Company as of and
at the dates indicated and the results of their operations and cash flows for
the periods specified subject to, in the case of the unaudited interim financial
statements, the normal year-end adjustments which are not expected to be
material in amount. Such financial statements and supporting schedules have been
prepared in conformity with generally accepted accounting principles as applied
in the United States, as applicable, applied on a consistent basis throughout
the periods involved, except as may be expressly stated in the related notes
thereto. No other financial statements or supporting schedules are required by
the Act or the rules and regulations of the Commission thereunder to be included
in the Registration Statement or the Prospectus Supplement. The financial data
set forth in the Prospectus Supplement under the caption "Selected Financial
Data" fairly present the information set forth therein on a basis consistent
with that of the audited financial statements contained in the Registration
Statement and the Prospectus Supplement.
(n) COMPANY'S ACCOUNTING SYSTEM. The Company maintains a system of
accounting controls sufficient to provide reasonable assurances that: (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles as applied in the United States and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
(o) NO SUBSIDIARIES OF THE COMPANY. The Company does not own or
control, directly or indirectly, any corporation, association or other entity .
(p) INCORPORATION AND 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 jurisdiction in which it is organized with full corporate
power and authority to own its properties and conduct its business as described
in the Prospectus Supplement, and is duly qualified to do business as a foreign
4
corporation and is in good standing under the laws of each jurisdiction which
requires such qualification except where the failure to be so qualified or in
good standing would not have a Material Adverse Effect on the Company and its
subsidiaries taken as a whole.
(q) CAPITALIZATION AND OTHER CAPITAL STOCK MATTERS. The authorized,
issued and outstanding capital stock of the Company is as set forth in the
Prospectus Supplement under the caption "The Offering" (other than for issuances
after the dates thereof, if any, pursuant to employee benefit plans or upon
exercise of outstanding options or warrants). The Common Stock (including the
Shares) conform in all material respects to the description thereof contained in
the Company's Registration Statement on Form S-1 (Registration No. 33[3]-17581.
All the issued and outstanding shares of Common Stock have been duly authorized
and validly issued, are fully paid and nonassessable and have been issued in
compliance with federal and state securities laws, as applicable. None of the
outstanding shares of Common Stock were issued in violation of any preemptive
rights, rights of first refusal or other similar rights to subscribe for or
purchase securities of the Company. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other rights to
purchase, or equity or debt securities convertible into or exchangeable or
exercisable for, any capital stock of the Company or any of its subsidiaries
other than those described in the Basic Prospectus and the Prospectus
Supplement. The description of the Company's stock option, stock bonus and other
stock plans or arrangements, and the options, warrants or other rights granted
thereunder, set forth in the Basic Prospectus and the Prospectus Supplement
accurately and fairly present the information required by the Act to be shown
with respect to such plans, arrangements, options and rights.
(r) STOCK EXCHANGE LISTING. The Shares are registered under the
Exchange Act and are listed on the Nasdaq National Market, and the Company has
taken no action designed to, or likely to have the effect of terminating the
registration of the Shares under the Exchange Act or delisting the Shares from
Nasdaq, nor has the Company received any information that the Commission or the
National Association of Securities Dealers, LLC ("NASD") is contemplating
terminating such registration or listing.
(s) NO CONSENTS, APPROVALS OR AUTHORIZATIONS REQUIRED. No consent,
approval, authorization, filing with or order of any court or governmental
agency or regulatory body is required in connection with the performance by the
Company of its obligations under this Agreement, except such as have been
obtained or made or are contemplated by Section 2(a) to be obtained or made.
(t) NON-CONTRAVENTION OF EXISTING INSTRUMENTS AND AGREEMENTS. Neither
the issue and sale of the Shares nor the performance by the Company of its
obligations under this Agreement nor the fulfillment of the terms hereof will
conflict with, result in a breach or violation of, or the loss of any benefit
under, or give rise to a right of acceleration or any other right, or the
imposition of any lien, charge or encumbrance upon any property or assets of the
Company, pursuant to: (i) the charter or by-laws of the Company; (ii) the terms
of any indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which the Company is a party or bound or to which any of its property is subject
and which conflict, breach or violation is reasonably likely to have a Material
Adverse Effect on the Company; or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company of any court, regulatory
body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company or any of its properties and which
conflict, breach or violation is reasonably likely to have a Material Adverse
Effect on the Company.
(u) NO DEFAULTS OR VIOLATIONS. The Company is not in violation or
default of: (i) any provision of its charter or by-laws; (ii) the terms of any
indenture, contract, lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement, obligation, condition, covenant or instrument to
which it is a party or bound or to which its property is subject; or (iii) any
statute, law or rule applicable to
5
the Company or any regulation, judgment, order or decree of any court,
governmental body, or agency having jurisdiction over the Company or such
subsidiary or any of its properties, as applicable, except any such violation or
default (described in clauses (i), (ii) or (iii) above) which would not, singly
or in the aggregate, reasonably be expected to result in a Material Adverse
Change not specifically disclosed in the Prospectus Supplement.
(v) NO ACTIONS, SUITS OR PROCEEDINGS. No action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or its or their property is pending or, to the best
knowledge of the Company, threatened that if adversely determined: (i) could
reasonably be expected to have a Material Adverse Effect on the performance of
this Agreement or the consummation of any of the transactions contemplated
hereby; or (ii) could reasonably be expected to result in a Material Adverse
Change.
(w) ALL NECESSARY PERMITS, ETC. The Company possess such valid and
current certificates, authorizations or permits issued by the appropriate
federal, state or foreign regulatory agencies or bodies necessary to conduct its
business as currently conducted or as proposed in the Prospectus Supplement to
be conducted, and the Company has not received any notice of proceedings
relating to the revocation or modification of, or non-compliance with, any such
certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, could reasonably be
expected to result in a Material Adverse Change.
(x) TITLE TO PROPERTIES. The Company has good and marketable title to
all the properties and assets reflected as owned in the financial statements
referred to in Section 2(m) above (or elsewhere in the Prospectus Supplement),
in each case free and clear of any security interests, mortgages, liens,
encumbrances, claims and other defects, except such as do not materially and
adversely affect the value of such property and do not materially interfere with
the use made or proposed to be made of such property by the Company. The real
property, improvements, equipment and personal property held under lease by the
Company are held under valid and enforceable leases, with such exceptions as are
not material, and do not materially interfere with the use made or proposed to
be made of such real property, improvements, equipment or personal property by
the Company.
(y) TAX LAW COMPLIANCE. The Company has filed all necessary federal,
state and foreign income and franchise tax returns and has paid all taxes
required to be paid by it and, if due and payable, any related or similar
assessment, fine or penalty levied against any of them. The Company has made
adequate charges, accruals and reserves in the applicable financial statements
referred to in Section 2(m) above in respect of all federal, state and foreign
income and franchise taxes for all periods as to which the tax liability of the
Company has not been finally determined. The Company is not aware of any tax
deficiency that has been or is reasonably likely to be asserted or threatened
against the Company that could reasonably be expected to result in a Material
Adverse Change.
(z) INTELLECTUAL PROPERTY RIGHTS. Except as described in the Prospectus
Supplement, the Company owns or possess all patents, patent rights or licenses,
inventions, collaborative research agreements, trade secrets, know-how,
trademarks, service marks, trade names and copyrights which are necessary to
conduct its businesses as described in the Prospectus Supplement; the expiration
of any patents, patent rights, trade secrets, trademarks, service marks, trade
names or copyrights would not result in a Material Adverse Change that is not
otherwise specifically disclosed in the Prospectus Supplement; the Company has
not received any notice of, and has no knowledge of, any infringement of or
conflict with asserted rights of the Company by others with respect to any
patent, patent rights, inventions, trade secrets, know-how, trademarks, service
6
marks, trade names or copyrights; and the Company has not received any notice
of, and has no knowledge of, any infringement of or conflict with asserted
rights of others with respect to any patent, patent rights, inventions, trade
secrets, know-how, trademarks, service marks, trade names or copyrights of the
Company which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, might have a Material Adverse Change. There is no
claim being made against the Company regarding patents, patent rights or
licenses, inventions, collaborative research, trade secrets, know-how,
trademarks, service marks, trade names or copyrights. The Company does not in
the conduct of its business as now or proposed to be conducted as described in
the Prospectus Supplement infringe or conflict with any right or patent of any
third party, or any discovery, invention, product or process which is the
subject of a patent application filed by any third party, known to the Company,
which such infringement or conflict could reasonably be expected to result in a
Material Adverse Change.
(aa) NO TRANSFER TAXES OR OTHER FEES. There are no transfer taxes or
other similar fees or charges under United States law or the laws of any state
or any political subdivision thereof, required to be paid in connection with the
execution and delivery of this Agreement or the issuance and sale by the Company
of the Shares.
(bb) COMPANY NOT AN "INVESTMENT COMPANY". The Company has been advised
by its counsel of the rules and requirements under the U.S. Investment Company
Act of 1940, as amended (the "Investment Company Act"). The Company is not, and
after receipt of payment for the Shares will not be, an "investment company" or
an entity "controlled" by an "investment company" within the meaning of the
Investment Company Act and will conduct its business in a manner so that it will
not become subject to the Investment Company Act.
(cc) INSURANCE. The Company is insured by recognized, financially sound
and reputable institutions with policies in such amounts and with such
deductibles and covering such risks as are generally deemed adequate and
customary for its business including, but not limited to, policies covering real
and personal property owned or leased by the against theft, damage, destruction,
acts of vandalism and earthquakes, general liability and directors and officers
liability. The Company has no reason to believe that it or any such subsidiary
will not be able: (i) to renew its existing insurance coverage as and when such
policies expire; or (ii) to obtain comparable coverage from similar institutions
as may be necessary or appropriate to conduct its business as now conducted and
at a cost that would not reasonably be expected to result in a Material Adverse
Change. The Company has not been denied any insurance coverage which it has
sought or for which it has applied.
(dd) LABOR MATTERS. To the best of the Company's knowledge, no labor
disturbance by the employees of the Company exists or is imminent, and the
Company is not aware of any existing or imminent labor disturbance by the
employees of any of its principal suppliers or customers that could reasonably
be expected to result in a Material Adverse Change.
(ee) 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 Shares.
(ff) LOCK-UP Agreements. Each executive officer and director of the
Company and Bessemer Ventures have signed an agreement substantially in the form
attached hereto as EXHIBIT C (the "Lock-up Agreements"). The Company has
provided to counsel for the Placement Agent true, accurate and complete copies
of all the Lock-up Agreements currently in effect or effected hereby.
(gg) RELATED PARTY TRANSACTIONS. There are no business relationships or
related-party transactions involving the Company or any other person required by
the Act to be described in the Prospectus Supplement, which have not been
described therein as required.
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(hh) NO UNLAWFUL CONTRIBUTIONS OR OTHER PAYMENTS. Neither the Company
nor any of its subsidiaries nor, to the best of the Company's knowledge, any
employee or agent of the Company or any subsidiary, has made any contribution or
other payment to any official of, or candidate for, any federal, state or
foreign office in violation of any law or of the character required by the Act
to be disclosed in the Prospectus Supplement.
(ii) ENVIRONMENTAL LAWS. (i) The Company is in compliance with all
rules, laws and regulations relating to the use, treatment, storage and disposal
of toxic substances and protection of health or the environment which are
applicable to its business ("Environmental Laws"), except where the failure to
comply would not reasonably be expected to result in a Material Adverse Change;
(ii) the Company has received no notice from any governmental authority or third
party of an asserted claim under Environmental Laws, which claim is required by
the Act to be disclosed in the Registration Statement or the Prospectus
Supplement; (iii) the Company is not currently aware that it will be required to
make future material capital expenditures to comply with Environmental Laws; and
(iv) no property which is owned, leased or occupied by the Company has been
designated as a Superfund site pursuant to the U.S. Comprehensive Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section 9601, ET
SEQ.), or otherwise designated as a contaminated site under applicable federal,
state or local law.
(jj) ERISA COMPLIANCE. The Company and its subsidiaries and any
"employee benefit plan" (as defined under the Employee Retirement Income
Security Act of 1974, as amended, and the regulations and published
interpretations thereunder (collectively, "ERISA")) established or maintained by
the Company, its subsidiaries or their "ERISA Affiliates" (as defined below) are
in compliance in all material respects with ERISA. "ERISA Affiliate" means, with
respect to the Company or a subsidiary, any member of any group of organizations
described in Sections 414(b),(c),(m) or (o) of the Internal Revenue Code of
1986, as amended, and the regulations and published interpretations thereunder
(the "Code") of which the Company or such subsidiary is a member. No material
"reportable event" (as defined under ERISA) has occurred or is reasonably
expected to occur with respect to any "employee benefit plan" established or
maintained by the Company or any of their ERISA Affiliates. No "employee benefit
plan" established or maintained by the Company, its subsidiaries or any of their
ERISA Affiliates, if such "employee benefit plan" were terminated, would have
any "amount of unfunded benefit liabilities" (as defined under ERISA). Neither
the Company nor any of its ERISA Affiliates has incurred or reasonably expects
to incur any material liability under: (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "employee benefit plan"; or (ii)
Sections 412, 4971, 4975 or 4980B of the Code. Each "employee benefit plan"
established or maintained by the Company or any of its ERISA Affiliates that is
intended to be qualified under Section 401(a) of the Code is so qualified and
nothing has occurred, whether by action or failure to act, which would cause the
loss of such qualification.
(kk) EXCHANGE ACT REPORTS FILED. The Company has filed all reports
required to be filed pursuant to the Securities Act and the Exchange Act.
Any certificate signed by an officer of the Company and
delivered to the Placement Agent or to counsel for the Placement Agent in
connection with this Agreement shall be deemed to be a representation and
warranty by the Company to the Placement Agent as to the matters set forth
therein.
SECTION 3. DELIVERY AND PAYMENT.
On [pricing date], the Company shall cause its transfer agent,
through The Depository Trust Corporation ("DTC"), to credit "free of payment"
the total number of Shares to be purchased by Investors pursuant to the Purchase
Agreements (the "Purchased Shares") to an account established by the Placement
Agent on behalf of the Company, to be held in the name and for the benefit of
the Company (the "DTC Account"). A nominee for the Placement Agent (the
"Nominee") will, in turn, cause DTC to
8
credit the account of each Investor through DTC with the number of Purchased
Shares set forth on Investor's Purchase Agreement against receipt of the
full purchase price for such Purchased Shares in the DTC Account. On [T + 3]
(the "Closing Date"), the Nominee shall cause to be paid to the Company, by wire
transfer of immediately available funds to a bank account or accounts designated
by the Company, the gross proceeds from the sale of the Purchased Shares in the
offering which have been credited to the DTC Account. With respect to any
Purchased Shares for which an Investor or Investors has not credited payment in
full to the DTC Account by the Closing Date (or such later date as the Company
and the Placement Agent may agree), the Nominee shall, through DTC, cause such
Shares to be returned to the Company's transfer agent. The Placement Agent shall
have no liability to the Company for any Purchased Shares credited to the DTC
Account for which payment of the purchase price for such Shares is not, in turn,
credited to the DTC Account as long as such Shares are returned to the Company's
transfer agent through DTC. The Company's obligations to issue and sell the
Shares to the Investors, and the Investors' obligations to purchase the Shares,
shall be subject to the satisfaction or waiver of the respective conditions
thereto set forth in the Purchase Agreements, and in the case of the Investors,
to the satisfaction or waiver by the Placement Agent of all the conditions set
forth in Section 5 of this Agreement. No Investor's obligations are conditioned
on the purchase by any or all of the other Investors of the Shares that they
have agreed to purchase from the Company.
SECTION 4. COVENANTS OF THE COMPANY.
The Company further covenants and agrees with each Placement
Agent as follows:
(a) REGISTRATION STATEMENT MATTERS. The Company agrees to make no
further amendment or supplement prior to the Closing Date to the Registration
Statement or any amendment or supplement to the Prospectus Supplement, which
shall be reasonably disapproved by you in good faith promptly after reasonable
notice thereof. The Company agrees to advise you promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement
related to or in connection with the Offering has been filed or becomes
effective or any supplement to the Prospectus Supplement or any amended
Prospectus Supplement has been filed and to furnish you with copies thereof; to
file promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to Section
13(a), 15 or 15(d) of the Exchange Act subsequent to the date of the Prospectus
Supplement and for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Shares; to advise you, promptly
after it receives notices thereof, (i) of any request by the Commission to amend
the Registration Statement or to amend or supplement the Prospectus Supplement
or for additional information and (ii) of the issuance by the Commission, of any
stop order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or any order directed at any Incorporated
Document or any amendment or supplement thereto or any order preventing or
suspending the use of the Basic Prospectus or the Prospectus Supplement or any
amendment or supplement thereto or any post-effective amendment to the
Registration Statement, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the institution or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus Supplement
or for additional information; and, in the event of the issuance of any stop
order or of any order preventing or suspending the use of the Basic Prospectus
or Prospectus Supplement or suspending any such qualification, promptly to use
its reasonable best efforts to obtain the withdrawal of such order, except for
any such instances after the closing of the Offering that do not relate to the
Offering.
(b) BLUE SKY COMPLIANCE. The Company will cooperate with the Placement
Agent and the Investors in endeavoring to qualify the Shares for sale under the
securities laws of such jurisdictions
9
(United States and foreign) as the Placement Agent may reasonably request and
will make such applications, file such documents, and furnish such information
as may be reasonably required for that purpose, provided the Company shall not
be required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction where it is not now so qualified or
required to file such a consent, and provided further that the Company shall not
be required to produce any new disclosure document other than the Prospectus
Supplement. The Company will, from time to time, prepare and file such
statements, reports and other documents as are or may be required to continue
such qualifications in effect for so long a period as the Placement Agent may
reasonably request for distribution of the Shares.
(c) AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS SUPPLEMENT AND OTHER
SECURITIES ACT MATTERS. The Company will comply with the Act and the Exchange
Act, and the rules and regulations of the Commission thereunder, so as to permit
the completion of the distribution of the Shares as contemplated in this
Agreement and the Prospectus Supplement. If during the period in which a
prospectus is required by law to be delivered by a Placement Agent or a dealer
in connection with the distribution of Shares contemplated by the Prospectus
Supplement, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of the Placement Agent or counsel for the
Placement Agent, it becomes necessary to amend or supplement the Prospectus
Supplement in order to make the statements therein, in the light of the
circumstances existing at the time the Prospectus Supplement is delivered to a
purchaser, not misleading, or, if it is necessary at any time to amend or
supplement the Prospectus Supplement to comply with any law, the Company
promptly will prepare and file with the Commission, and furnish at its own
expense to the Placement Agent and to dealers, an appropriate amendment to the
Registration Statement or supplement to the Prospectus Supplement so that the
Prospectus Supplement as so amended or supplemented will not, in the light of
the circumstances when it is so delivered, be misleading, or so that the
Prospectus Supplement will comply with such law.
(d) COPIES OF ANY AMENDMENTS AND SUPPLEMENTS TO THE PROSPECTUS
SUPPLEMENT. The Company agrees to furnish the Placement Agent, without charge,
during the period beginning on the date hereof and ending on the later of the
Closing Date or such date, as in the opinion of counsel for the Placement Agent,
the Prospectus Supplement are no longer required by law to be delivered in
connection with sales by a Placement Agent or dealer (the "Prospectus Delivery
Period"), as many copies of the Prospectus Supplement and any amendments and
supplements thereto (including any Incorporated Documents) as the Placement
Agent may reasonably request.
(e) NOTICE OF SUBSEQUENT EVENTS. If at any time prior to the 90th
day after the date of the Prospectus Supplement, any rumor, publication or
event relating to or affecting the Company shall occur as a result of which,
in your opinion, the market price of the Common Stock has been or is likely
to be materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus
Supplement), the Company will, after written notice from you advising the
Company to the effect set forth above and setting forth in reasonable detail
the basis for your opinion in respect thereof, forthwith prepare, consult
with you concerning the substance of and disseminate a press release or other
public statement, reasonably satisfactory to you, responding to or commenting
on such rumor, publication or event.
10
(f) USE OF PROCEEDS. The Company shall apply the net proceeds from the
sale of the Shares sold by it in the manner described under the caption "Use of
Proceeds" in the Prospectus Supplement.
(g) TRANSFER AGENT. The Company shall engage and maintain, at its
expense, a registrar and transfer agent for the Shares.
(h) EARNINGS STATEMENT. As soon as practicable and in accordance with
applicable requirements under the Act, but in any event not later than 18 months
after the Effective Date, the Company will make generally available to its
security holders and to the Placement Agent an earnings statement, covering a
period of at least twelve consecutive months beginning after the Effective Date,
that satisfies the provisions of Section 11(a) and Rule 158 under the Act.
(i) PERIODIC REPORTING OBLIGATIONS. During the Prospectus Delivery
Period, the Company shall duly file, on a timely basis, with the Commission and
the Nasdaq National Market all reports and documents required to be filed under
the Exchange Act within the time periods required by the Exchange Act.
(j) AGREEMENT NOT TO OFFER OR SELL ADDITIONAL SECURITIES. The Company
will not without the consent of [____________________] offer, sell or contract
to sell, or otherwise dispose of or enter into any transaction which is designed
to, or could reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise by the Company directly or indirectly, or announce the offering of,
any other shares of Common Stock or any securities convertible into, or
exchangeable or exercisable for, Common Stock; provided, however, that the
Company may: (i) issue and sell the Shares pursuant hereto; (ii) issue and sell
shares of Common Stock pursuant to any director or employee stock option plan,
stock ownership plan or dividend reinvestment plan of the Company in effect at
the date of the Prospectus Supplement and described in the Prospectus
Supplement; (iii) the Company may issue shares of Common Stock issuable upon
the conversion of securities or the exercise of warrants or options outstanding
at the date of the Prospectus Supplement and described in the Prospectus
Supplement and described in the Prospectus Supplement; (iv) the Company may
issue shares of Common Stock for acquisitions, strategic alliances,
collaborations, licenses, marketing agreements and similar arrangements to
persons who agree not to sell, contract or otherwise dispose of or hedge such
Common Stock during the remainder of the Lock-up Period (as defined below); and
(v) the Company may securities pursuant to equipment or lease financing
activities entered into in the ordinary course of business to persons who agree
not to sell, contract or otherwise dispose or hedge such Common Stock during the
remainder of the Lock-up Period; and (vi) the Company may issue and sell the
securities described in the Basic Prospectus pursuant to another supplement to
the Basic Prospectus. These restrictions terminate after the close of trading of
the Shares on the 60th day after the Closing Date.
(k) FUTURE REPORTS TO THE PLACEMENT AGENT. During the period of five
years hereafter the Company will furnish to the Placement Agent: (i) as soon as
practicable after the end of each fiscal year, copies of the Annual Report of
the Company containing the balance sheet of the Company as of the close of such
fiscal year and statements of income, stockholders' equity and cash flows for
the year then ended and the opinion thereon of the Company's independent public
certified public accountants or chartered accountants; (ii) as soon as
practicable after the filing thereof, copies, with all exhibits, if any, of each
proxy statement, Annual Report on Form 10-K, Quarterly Report on Form 10-Q,
Current Report on Form 8-K or other report filed by the Company with the
Commission, the NASD, or any other securities exchange; and (iii) as soon as
available, copies of any report or communication of the Company mailed generally
to holders of its capital stock.
SECTION 5. CONDITIONS OF THE OBLIGATIONS OF THE PLACEMENT AGENT. The
obligations of the several Placement Agent hereunder shall be subject to the
accuracy of the representations and warranties
11
on the part of the Company set forth in Section 2 as of the date hereof and as
of the Closing Date as though then made, to the timely performance by the
Company of its covenants and other obligations hereunder, and to each of the
following additional conditions:
(a) COMPLIANCE WITH REGISTRATION REQUIREMENTS; NO STOP ORDER. The
Prospectus Supplement shall have been filed with the Commission in accordance
with Rule 424(b) substantially concurrent with the execution hereof; no stop
order suspending the effectiveness of the Registration Statement or any part
thereof shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; no order preventing or
suspending the use of the Prospectus Supplement shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; no order having the effect of ceasing or suspending the distribution
of the Shares or any other securities of the Company shall have been issued by
any securities commission, securities regulatory authority or stock exchange and
no proceedings for that purpose shall have been instituted or shall be pending
or, to the knowledge of the Company, shall be contemplated by any securities
commission, securities regulatory authority or stock exchange; and all requests
for additional information on the part of the Commission shall have been
complied with.
(b) CORPORATE PROCEEDINGS. All corporate proceedings and other legal
matters in connection with this Agreement, the Registration Statement and the
Prospectus Supplement, and the registration, authorization, issue, sale and
delivery of the Shares, shall have been reasonably satisfactory to the Placement
Agent's counsel, and such counsel shall have been furnished with such papers and
information as they may reasonably have requested to enable them to pass upon
the matters referred to in this Section.
(c) NO MATERIAL ADVERSE CHANGE. Subsequent to the execution and
delivery of this Agreement and prior to the Closing Date, there shall not have
occurred any Material Adverse Change or Material Adverse Effect, which, in your
sole reasonable judgment, makes it impracticable or inadvisable to proceed with
the public offering of the Shares as contemplated by the Prospectus Supplement.
(d) OPINION OF COUNSEL FOR THE COMPANY. You shall have received on the
Closing Date an opinion substantially in the form of EXHIBIT D attached hereto,
of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., dated the Closing Date,
addressed to the Placement Agent.
(e) OPINION OF INTELLECTUAL PROPERTY COUNSEL FOR THE COMPANY. You shall
have received on the Closing Date an opinion of Fish & Neave, intellectual
property counsel for the Company substantially in the form of EXHIBIT E attached
hereto.
(f) OPINION OF COUNSEL FOR THE PLACEMENT AGENT. You shall have received
on the Closing Date an opinion of Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP, counsel for
the Placement Agent reasonably satisfactory to you. The Company shall have
furnished to such counsel such documents as they may have reasonably requested
for the purpose of enabling them to pass upon such matters.
(g) ACCOUNTANTS' COMFORT LETTER. You shall have received on the Closing
Date a letter from Ernst & Young, LLP addressed to the Placement Agent, dated
the Closing Date, in the form set forth on EXHIBIT F hereto. The letter shall
not disclose any change in the condition (financial or otherwise), earnings,
operations, business or business prospects of the Company from that set forth in
the Registration Statement or Prospectus Supplement, which, in your sole
judgment, is material and adverse and that makes it, in your sole judgment,
impracticable or inadvisable to proceed with the public offering of the Shares
as contemplated by the Prospectus Supplement.
12
(h) OFFICERS' CERTIFICATE. You shall have received on the Closing Date
a certificate of the Company, dated the Closing Date signed by the Chief
Executive Officer and Chief Financial Officer of the Company, to the effect
that, and you shall be reasonably satisfied that:
(i) The representations and warranties of the Company in this Agreement
are true and correct, as if made on and as of the Closing Date, and the
Company has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) No stop order suspending the effectiveness of the Registration
Statement or the use of the Basic Prospectus or the Prospectus
Supplement has been issued and no proceedings for that purpose have
been instituted or are pending or, to the Company's knowledge,
threatened under the Act; no order having the effect of ceasing or
suspending the distribution of the Shares or any other securities of
the Company has been issued by any securities commission, securities
regulatory authority or stock exchange in the United States and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, contemplated by any securities
commission, securities regulatory authority or stock exchange in the
United States;
(iii) When the Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate, the
Registration Statement, the Prospectus Supplement and any amendments or
supplements thereto, and Incorporated Documents, when such documents
became effective or were filed with the Commission, contained all
material information required to be included therein by the Act and the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, as the case may be, and in all material respects conformed
to the requirements of the Act and the Exchange Act and the applicable
rules and regulations of the Commission thereunder, as the case may be,
the Registration Statement and the Prospectus Supplement, and any
amendments or supplements thereto, did not and do not include 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, in the light of the circumstances under which they were made,
not misleading (provided, however, that the preceding representations
and warranties contained in this paragraph (iii) shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Placement Agent
expressly for use therein) and, since the effective date of the
Registration Statement, there has occurred no event required by the Act
and the rules and regulations of the Commission thereunder to be set
forth in an amended or supplemented Prospectus Supplement which has not
been so set forth;
(iv) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus Supplement,
there has not been: (a) any Material Adverse Change; (b) any
transaction that is material to the Company, except transactions
entered into in the ordinary course of business; (c) any obligation,
direct or contingent, that is material to the Company, incurred by the
Company or its subsidiaries, except obligations incurred in the
ordinary course of business; (d) any change in the capital stock
(except changes thereto resulting from the exercise of outstanding
stock options) or outstanding indebtedness of the Company or any of its
subsidiaries that is material to the Company; (e) any dividend or
distribution of any kind declared, paid or made on the capital stock of
the Company; or (f) any loss or damage (whether or not insured) to the
property of the Company which has been sustained or will have been
sustained which has a Material Adverse Effect; and
(v) The Company has been subject to continuous disclosure requirements
of the Exchange Act for a period of at least 12 calendar months
immediately preceding the filing of the
13
Registration Statement and is currently in compliance with such
obligations; and the Company has an aggregate market value of the
public float of its outstanding Common Stock of U.S. $75 million or
more.
(i) LOCK-UP AGREEMENT FROM CERTAIN STOCKHOLDERS OF THE COMPANY. The
Company shall have obtained and delivered to you an agreement substantially in
the form of EXHIBIT C attached hereto from each officer and director of the
Company and Bessemer Ventures and such agreements shall be in full force and
effect.
(j) STOCK EXCHANGE LISTING. The Shares are registered under the
Exchange Act and are listed on the Nasdaq National Market, and the Company has
taken no action designed to, or likely to have the effect of terminating the
registration of the Shares under the Exchange Act or delisting the Shares from
Nasdaq, nor has the Company received any information that the Commission or the
NASD is contemplated terminating such registration or listing.
(k) COMPLIANCE WITH PROSPECTUS DELIVERY REQUIREMENTS. The Company shall
have complied with the provisions of Sections 3 and 4(c) and (d) with respect to
the furnishing of Prospectus Supplements.
(l) ADDITIONAL DOCUMENTS. On or before each of the Closing Date, the
Placement Agent and counsel for the Placement Agent shall have received such
information, documents and opinions as they may reasonably require for the
purposes of enabling them to pass upon the issuance and sale of the Shares as
contemplated herein, or in order to evidence the accuracy of any of the
representations and warranties, or the satisfaction of any of the conditions or
agreements, herein contained.
If any condition specified in this Section 5 is not satisfied
when and as required to be satisfied, this Agreement may be terminated by the
Placement Agent by notice to the Company at any time on or prior to the Closing
Date, which termination shall be without liability on the part of any party to
any other party, except that Section 6 (Payment of Expenses), Section 7
(Reimbursement of Placement Agent's Expenses), Section 8 (Indemnification and
Contribution) and Section 10 (Representations and Indemnities to Survive
Delivery) shall at all times be effective and shall survive such termination.
SECTION 6. PAYMENT OF EXPENSES. The Company agrees to pay all costs,
fees and expenses incurred in connection with the performance of its obligations
hereunder and in connection with the transactions contemplated hereby, including
without limitation: (i) all expenses incident to the issuance, delivery and
qualification of the Shares (including all printing and engraving costs); (ii)
all fees and expenses of the registrar and transfer agent of the Common Stock;
(iii) all necessary issue, transfer and other stamp taxes in connection with the
issuance and sale of the Shares to the Investors; (iv) all fees and expenses of
the Company's counsel, independent public or certified public accountants and
other advisors; (v) all costs and expenses incurred in connection with the
preparation, printing, filing, shipping and distribution of the Registration
Statement (including financial statements, exhibits, schedules, consents and
certificates of experts), the Basic Prospectus and the Prospectus Supplement,
and all amendments and supplements thereto, and this Agreement; (vi) all filing
fees, reasonable attorneys' fees and expenses incurred by the Company or the
Placement Agent in connection with qualifying or registering (or obtaining
exemptions from the qualification or registration of) all or any part of the
Shares for offer and sale under the state securities or blue sky laws or the
securities laws of any other country, and, if reasonably requested by the
Placement Agent, preparing and printing a "Blue Sky Survey", an "International
Blue Sky Survey" or other memorandum, and any supplements thereto, advising the
Placement Agent of such qualifications, registrations and exemptions; (vii) the
filing fees incident to, and the reasonable fees and expenses of counsel for the
Placement Agent in connection with, the review and approval by the NASD of the
Placement Agent's participation in the offering and distribution of the
14
Shares; (viii) the fees and expenses associated with including the Common Stock
on the Nasdaq National Market; (ix) all costs and expenses incident to the
travel and accommodation of the Company's employees on the "roadshow", if any;
and (x) all other fees, costs and expenses referred to in Part II of the
Registration Statement. Except as provided in this Section 6, Section 7, and
Section 8, the Company shall pay the Placement Agent's expenses, including the
fees and disbursements of its counsel, in accordance with the Engagement Letter.
SECTION 7. REIMBURSEMENT OF PLACEMENT AGENT'S EXPENSES. If this
Agreement is terminated by the Placement Agent pursuant to Section 5 or Section
9, or if the sale to the Investors of the Shares on the Closing Date is not
consummated because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or to comply with any provision hereof,
the Company agrees to reimburse the Placement Agent, upon demand, for all
out-of-pocket expenses that shall have been reasonably incurred by the Placement
Agent in connection with the proposed purchase and the offering and sale of the
Shares, including but not limited to reasonable fees and disbursements of
counsel, printing expenses, travel and accommodation expenses, postage,
facsimile and telephone charges.
SECTION 8. INDEMNIFICATION AND CONTRIBUTION.
(a) INDEMNIFICATION OF THE PLACEMENT AGENT. The Company agrees to
indemnify and hold harmless the Placement Agent, its officers and employees,
and each person, if any, who controls the Placement Agent within the meaning
of the Act and the Exchange Act against any loss, claim, damage, liability or
expense, as incurred, to which the Placement Agent or such controlling person
may become subject, under the Act, the Exchange Act, or other federal or
state statutory law or regulation, or at common law or otherwise (including
in settlement of any litigation, if such settlement is effected with the
written consent of the Company, which consent shall not be unreasonably
withheld), insofar as such loss, claim, damage, liability or expense (or
actions in respect thereof as contemplated below) arises out of or is based:
(i) upon any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, or any amendment thereto, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; or (ii) upon
any untrue statement or alleged untrue statement of a material fact contained
in the Basic Prospectus or the Prospectus Supplement (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; or (iii) in
whole or in part upon any inaccuracy in the representations and warranties of
the Company contained herein; or (iv) in whole or in part upon any failure of
the Company to perform its obligations hereunder or under law; or (v) any act
or failure to act or any alleged act or failure to act by any Placement Agent
in connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, damage, liability or action arising out of or based upon any
matter covered by clause (i), (ii), (iii) or (iv) above, provided that the
Company shall not be liable under this clause (v) to the extent that a court
of competent jurisdiction shall have determined by a final judgment that such
loss, claim, damage, liability or action resulted directly from any such acts
or failures to act undertaken or omitted to be taken by the Placement Agent
through its gross negligence, bad faith or willful misconduct; and to
reimburse the Placement Agent and each such controlling person for any and
all expenses (including the fees and disbursements of counsel chosen by the
Placement Agent) as such expenses are reasonably incurred by such Placement
Agent or such controlling person in connection with investigating, defending,
settling, compromising or paying any such loss, claim, damage, liability,
expense or action; provided, however, that the foregoing indemnity agreement
shall not apply to any loss, claim, damage, liability or expense to the
extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged 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, the Basic Prospectus or
15
the Prospectus Supplement (or any amendment or supplement thereto); and
provided, further, that with respect to any preliminary prospectus, the
foregoing indemnity agreement shall not inure to the benefit of any Placement
Agent from whom the person asserting any loss, claim, damage, liability or
expense purchased Shares, or any person controlling such Placement Agent, if
copies of the Prospectus Supplement were timely delivered to such Placement
Agent pursuant to Section 3 and a copy of the Prospectus Supplement (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Placement
Agent to such person, if required by law so to have been delivered, and if the
Prospectus Supplement (as so amended or supplemented) would have cured the
defect giving rise to such loss, claim, damage, liability or expense. The
indemnity agreement set forth in this Section 8(a) shall be in addition to any
liabilities that the Company may otherwise have.
(b) INDEMNIFICATION OF THE COMPANY, ITS DIRECTORS AND OFFICERS. The
Placement Agent agrees, severally and not jointly, to indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Act or the Exchange Act, against any loss, claim, damage,
liability or expense, as incurred, to which the Company, or any such director,
officer or controlling person may become subject, under the Act, the Exchange
Act, or other federal, state statutory law or regulation, or at common law or
otherwise (including in settlement of any litigation, if such settlement is
effected with the written consent of such Placement Agent), insofar as such
loss, claim, damage, liability or expense (or actions in respect thereof as
contemplated below) arises out of or is based upon any untrue or alleged untrue
statement of a material fact contained in the Registration Statement, the Basic
Prospectus or the Prospectus Supplement (or any amendment or supplement
thereto), or arises out of or is based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in the Registration Statement, the Basic Prospectus
or the Prospectus Supplement (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 therein and to reimburse the
Company, or any such director, officer or controlling person for any legal and
other expense reasonably incurred by the Company, or any such director, officer
or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action. The indemnity agreement set forth in this Section 8(b) shall be in
addition to any liabilities that the Placement Agent may otherwise have.
(c) INFORMATION PROVIDED BY THE PLACEMENT AGENT. The Company and each
person, if any, who controls the Company within the meaning of the Act or the
Exchange Act, hereby acknowledges that the only information that each Placement
Agent has furnished to the Company expressly for use in the Registration
Statement, the Basic Prospectus or the Prospectus Supplement (or any amendment
or supplement thereto) are the statements set forth in the first sentence of the
third paragraph and the third paragraph following the table, in each case under
the caption "Plan of Distribution" in the Prospectus Supplement, and the
Placement Agent confirm that such statements are correct.
(d) NOTIFICATIONS AND OTHER INDEMNIFICATION PROCEDURES. Promptly after
receipt by an indemnified party under this Section 8 of notice of the
commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against an indemnifying party under this Section 8, notify
the indemnifying party in writing of the commencement thereof, but the omission
so to notify the indemnifying party will not relieve it from any liability,
which it may have to any indemnified party for contribution to the extent it is
not prejudiced as a proximate result of such failure. In case any such action is
brought against any indemnified party and such indemnified party seeks or
intends to seek indemnity from an indemnifying party, the indemnifying party
will be entitled to participate in, and, to the extent
16
that it shall elect, jointly with all other indemnifying parties similarly
notified, by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of any
such action or that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnified party or parties shall have the right to
select separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified
party of such indemnifying party's election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by such indemnified party in connection
with the defense thereof unless: (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
(it being understood, however, that the indemnifying party shall not be liable
for the expenses of more than one separate counsel (together with local
counsel), approved by the indemnifying party), representing the indemnified
parties who are parties to such action); (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of the action; or (iii) the indemnifying party has authorized the
employment of counsel for the indemnified party at the expense of the
indemnifying party, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party.
(e) SETTLEMENTS. The indemnifying party under this Section 8 shall not
be liable for any settlement of any proceeding effected without its written
consent, which consent shall not be unreasonably withheld, but if settled with
such consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party against any loss, claim, damage,
liability or expense by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by Section 8(d), the indemnifying party agrees that
it shall be liable for any settlement of any proceeding effected without its
written consent if: (i) such settlement is entered into more than 60 days after
receipt by such indemnifying party of the aforesaid request; and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise or
consent includes: (i) an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such action, suit or
proceeding; 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.
(f) CONTRIBUTION. If the indemnification provided for in this Section 8
is unavailable to or insufficient to hold harmless an indemnified party under
Section 8(a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) then each
indemnifying party shall contribute to the aggregate amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect the
relative benefits received by such party on the one hand and the Placement Agent
on the other from the offering of the Shares. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law then each indemnifying party shall contribute to such amount paid or payable
by such indemnified party in such proportion as is appropriate to reflect not
only such relative benefits but also the relative fault of such indemnifying
party on the one
17
hand and the Placement Agent on the other in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof), as well as any other relevant
equitable considerations. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the "control" stockholders on
the one hand or the Placement Agent on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and Placement Agent agree that it would not be
just and equitable if contributions pursuant to this Section 8(f) 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 8(f). The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) referred to above in this Section 8(f) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (f): (i) the Placement Agent
shall not be required to contribute any amount in excess of the amount of the
placement agent fees actually received by such Placement Agent pursuant to this
Agreement; and (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The Placement
Agent's obligations under this Section 8(f) to contribute are several in
proportion to their respective placement obligations and not joint.
(g) TIMING OF ANY PAYMENTS OF INDEMNIFICATION. Any losses, claims,
damages, liabilities or expenses for which an indemnified party is entitled to
indemnification or contribution under this Section 8 shall be paid by the
indemnifying party to the indemnified party as such losses, claims, damages,
liabilities or expenses are incurred, but in all cases, no later than forty-five
(45) days of invoice to the indemnifying party.
(h) SURVIVAL. The indemnity and contribution agreements contained in
this Section 8 and the representations and warranties set forth in this
Agreement shall remain operative and in full force and effect, regardless of:
(i) any investigation made by or on behalf of any Placement Agent or any person
controlling the Placement Agent, the Company, its directors or officers or any
persons controlling the Company; (ii) acceptance of any Shares and payment
therefor hereunder; and (iii) any termination of this Agreement. A successor to
any Placement Agent, or to the Company, its directors or officers or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section 8.
(i) ACKNOWLEDGEMENTS OF PARTIES. The parties to this Agreement hereby
acknowledge that they are sophisticated business persons who were represented by
counsel during the negotiations regarding the provisions hereof including,
without limitation, the provisions of this Section 8, and are fully informed
regarding said provisions. They further acknowledge that the provisions of this
Section 8 fairly allocate the risks in light of the ability of the parties to
investigate the Company and its business in order to assure that adequate
disclosure is made in the Registration Statement and the Prospectus Supplement
as required by the Act and the Exchange Act.
SECTION 9. TERMINATION OF THIS AGREEMENT. This Agreement may be
terminated by the Placement Agent by notice given to the Company if: (a) at any
time after the execution and delivery of this Agreement and prior to the Closing
Date: (i) trading or quotation in any of the Company's securities shall have
been suspended or limited by the Commission or by the NASD, or trading in
securities generally on the Nasdaq Stock Market and the New York Stock Exchange
shall have been suspended or limited, or minimum or maximum prices shall have
been generally established on any of such stock
18
exchanges by the Commission or the NASD; (ii) a general banking moratorium shall
have been declared by any United States federal, New York, Delaware or
California authorities; (iii) there should develop, occur or come into effect or
existence any event, action, state, condition or major financial occurrence of
national or international consequence, or any outbreak or escalation of national
or international hostilities or any crisis or calamity, or any change in the
United States or international financial markets, or any substantial change or
development involving a prospective change in the United States' or
international political, financial or economic conditions, or any law or
regulation, as in the reasonable judgment of the Placement Agent (x) seriously
adversely affects, or involves, or will seriously and adversely affect, or
involve, the financial markets or the business, operations or affairs of the
Company, or (y) is material and adverse and makes it impracticable or
inadvisable to market the Shares in the manner and on the terms contemplated in
the Prospectus Supplement or to enforce contracts for the sale of securities;
(iv) in the reasonable judgment of the Placement Agent there shall have occurred
any Material Adverse Change or Effect; or (v) the Company shall have sustained a
loss by strike, fire, flood, earthquake, accident or other calamity of such
character as in the reasonable judgment of the Placement Agent may interfere
materially with the conduct of the business and operations of the Company
regardless of whether or not such loss shall have been insured; or (b) in the
case of any of the events specified Section 9(a)(i)-(v), such event singly or
together with any other event, makes it, in your reasonable judgment,
impracticable or inadvisable to market the Shares in the manner and on the terms
contemplated in the Prospectus Supplement. Any termination pursuant to this
Section 9 shall be without liability on the part of any party hereto to any
other party except that the provisions of Sections 6, 7 and 8 shall at all times
be effective and shall survive such termination.
SECTION 10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE DELIVERY. The
respective indemnities, agreements, representations, warranties and other
statements of the Company or any person controlling the company, of its
officers, and of the several Placement Agent set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Placement Agent or the Company or any
of its or their partners, officers or directors or any controlling person, as
the case may be, and will survive delivery of and payment for the Shares sold
hereunder and any termination of this Agreement.
SECTION 11. NOTICES. All communications hereunder shall be in writing
and shall be mailed, hand delivered or telecopied and confirmed to the parties
hereto as follows:
If to the Placement Agent:
[__________]
[__________]
[__________]
Facsimile: [__________]
Attention: [__________]
If to the Company:
EPIX Medical, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Chief Executive Officer
Any party hereto may change the address for receipt of communications by giving
written notice to the others.
19
SECTION 12. SUCCESSORS. This Agreement will inure to the benefit of and
be binding upon the parties hereto, and to the benefit of the employees,
officers and directors and controlling persons referred to in Section 8, and to
their respective successors, and personal representatives, and no other person
will have any right or obligation hereunder.
SECTION 13. PARTIAL UNENFORCEABILITY. The invalidity or
unenforceability of any Section, paragraph or provision of this Agreement shall
not affect the validity or enforceability of any other Section, paragraph or
provision hereof. If any Section, paragraph or provision of this Agreement is
for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to
make it valid and enforceable.
SECTION 14. GOVERNING LAW PROVISIONS.
(a) GOVERNING LAW. This agreement shall be governed by and construed in
accordance with the internal laws of the state of New York applicable to
agreements made and to be performed in such state.
(b) CONSENT TO JURISDICTION. Any legal suit, action or proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby ("Related Proceedings") may be instituted in the federal courts of the
United States of America located in the City and County of San Francisco or the
courts of the State of California in each case located in the City and County of
San Francisco (collectively, the "Specified Courts"), and each party irrevocably
submits to the exclusive jurisdiction (except for proceedings instituted in
regard to the enforcement of a judgment of any such court (a "Related
Judgment"), as to which such jurisdiction is non-exclusive) of such courts in
any such suit, action or proceeding. Service of any process, summons, notice or
document by mail to such party's address set forth above shall be effective
service of process for any suit, action or other proceeding brought in any such
court. The parties irrevocably and unconditionally waive any objection to the
laying of venue of any suit, action or other proceeding in the Specified Courts
and irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such suit, action or other proceeding brought in any such
court has been brought in an inconvenient forum. Each party not located in the
United States irrevocably appoints CT Corporation System, which currently
maintains a San Francisco office at 00 Xxxxxxxxx Xxxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Xxxxxx Xxxxxx of America, as its agent to receive service of
process or other legal summons for purposes of any such suit, action or
proceeding that may be instituted in any state or federal court in the City and
County of San Francisco.
SECTION 15. GENERAL PROVISIONS. This Agreement constitutes the entire
agreement of the parties to this Agreement and supersedes all prior written or
oral and all contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement may not be amended or modified unless in writing by all of the
parties hereto, and no condition herein (express or implied) may be waived
unless waived in writing by each party whom the condition is meant to benefit.
Section headings herein are for the convenience of the parties only and shall
not affect the construction or interpretation of this Agreement.
[The remainder of this page has been intentionally left blank.]
20
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company the enclosed copies hereof,
whereupon this instrument, along with all counterparts hereof, shall become a
binding agreement in accordance with its terms.
Very truly yours,
EPIX MEDICAL, INC.
a Delaware corporation
By:
-------------------------------------
Name:
Title:
The foregoing Placement Agency Agreement is hereby confirmed
and accepted by the Placement Agent as of the date first above written.
[__________]
By:
--------------------------------------------------
Name:
Title:
21
EXHIBIT A
ENGAGEMENT LETTER
A-1
EXHIBIT B
SHARE PURCHASE AGREEMENT
EPIX Medical, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
The undersigned, ______________________ (the "Investor"), hereby
confirms its agreement with you as follows:
1. This Share Purchase Agreement (the "Agreement") is made as of
January __, 2002 between Epix Medical, Inc., a Delaware corporation (the
"Company"), and the Investor.
2. The Company has authorized the sale and issuance of up to _________
common shares (the "Shares") of the Company, subject to adjustment by the
Company's Board of Directors, to certain investors (the "Offering"). The
Offering has been registered under the Securities Act of 1933, as amended,
pursuant to the Company's Registration Statement on Form S-3 (No. 333-41782), as
amended (the "Registration Statement").
3. The Company and the Investor agree that the Investor will purchase from
the Company and the Company will issue and sell to the Investor ________ Shares,
for a purchase price of $_____ per share, or an aggregate purchase price of
$________, pursuant to the Terms and Conditions for Purchase of Shares attached
hereto as Annex I and incorporated herein by reference as if fully set forth
herein. Certificates representing the Shares purchased by the Investor will not
be issued to the Investor; instead, such Shares will be credited to the Investor
using customary book-entry procedures.
4. The Investor represents that, except as set forth below, (a) it has had
no position, office or other material relationship within the past three years
with the Company or persons known to it to be affiliates of the Company, (b)
neither it, nor any group of which it is a member or to which it is related,
beneficially owns (including the right to acquire or vote) any securities of the
Company and (c) it has no direct or indirect affiliation or association with any
NASD member as of the date hereof.
Exceptions:
________________________________________________________________________________
________________________________________________________________________________
(If no exceptions, write "none." If left blank, response will be
deemed to be "none.")
B-1
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.
AGREED AND ACCEPTED: Name of Investor:
--------------------------
EPIX MEDICAL, INC.
a Delaware corporation
By: By:
------------------------------- ----------------------------------------
Name: Print Name:
Title: --------------------------------
Title:
-------------------------------------
Address:
-----------------------------------
-------------------------------------------
Tax ID No.:
--------------------------------
Contact Name:
------------------------------
Telephone:
---------------------------------
Name in which book-entry should be made (if
different):
-------------------------------------------
B-2
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SHARES
1. AUTHORIZATION AND SALE OF SHARES. The Company has authorized the sale of up
to __________ Shares. The Company reserves the right to increase or decrease
this number.
2. AGREEMENT TO SELL AND PURCHASE THE SHARES; SUBSCRIPTION DATE.
2.1. Upon the terms and subject to the conditions hereinafter set forth, at
the Closing (as defined in Section 3), the Company will sell to the
Investor, and the Investor will purchase from the Company, the number
of Shares set forth on the signature page hereto at the purchase price
set forth on such signature page.
2.2. The Company may enter into agreements similar to this Agreement with
certain other investors (the "Other Investors") and expects to
complete sales of Shares to them. (The Investor and the Other
Investors are hereinafter sometimes collectively referred to as the
"Investors", and this Agreement and the stock purchase agreements
executed by the Other Investors are hereinafter sometimes collectively
referred to as the "Agreements".)
3. DELIVERY OF THE SHARES AT CLOSING. The completion of the purchase and sale of
the Shares (the "Closing") shall occur on January __, 2002 (the "Closing Date"),
at the offices of the Company's counsel. At the Closing, the Company shall
deliver to the Investor, using customary book-entry procedures, the number of
Shares set forth on the signature page hereto, and the Investor shall deliver to
the Placement Agent (as defined in the Registration Statement or any supplement
thereto) a certified or official bank check or wire transfer of funds in the
full amount of the purchase price for the Shares being purchased hereunder as
set forth on the signature page hereto.
The Company's obligation to issue and sell the Shares to the Investor shall be
subject to the following conditions, any one or more of which may be waived by
the Company: (a) completion of the purchases and sales of all the Shares under
the Agreements with the Other Investors; and (b) the accuracy of the
representations and warranties made by the Investors and the fulfillment of
those undertakings of the Investors to be fulfilled prior to the Closing.
The Investor's obligation to purchase the Shares shall be subject to
the condition that the Placement Agent shall not have terminated the Placement
Agency Agreement dated January 11, 2002, between the Company and the several
Placement Agent pursuant to the terms thereof.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY. The Company hereby
represents and warrants to, and covenants with, the Investor, as follows:
4.1. The Company has full right, power, authority and capacity to enter
into this Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement.
4.2. This Agreement constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general
B-3
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
5. REPRESENTATIONS, WARRANTIES AND COVENANTS TO THE INVESTOR.
5.1. The Investor represents and warrants that it has received the
Company's prospectus supplement dated January __, 2002 relating to the
Offering (the "Prospectus").
5.2. The Investor, if outside the United States, will comply with all
applicable laws and regulations in each foreign jurisdiction in which
it purchases, offers, sells or delivers Shares or has in its
possession or distributes any offering material, in all cases at its
own expense.
5.3. The Investor further represents and warrants to, and covenants with,
the Company that (i) the Investor has full right, power, authority and
capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement,
and (ii) this Agreement constitutes a valid and binding obligation of
the Investor enforceable against the Investor in accordance with its
terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5.4. The Investor understands that nothing in the Prospectus, this
Agreement or any other materials presented to the Investor in
connection with the purchase and sale of the Shares constitutes legal,
tax or investment advise. The Investor has consulted such legal, tax
and investment advisors as it, in its sole discretion, has deemed
necessary or appropriate in connection with its purchase of Shares.
6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. Notwithstanding any
investigation made by any party to this Agreement, all covenants, agreements,
representations and warranties made by the Company and the Investor herein shall
survive the execution of this Agreement, the delivery to the Investor of the
Shares being purchased and the payment therefor.
7. NOTICES. All notices, requests, consents and other communications hereunder
shall be in writing, shall be mailed (A) if within domestic United States by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, or by facsimile, or (B) if delivered from
outside the United States, by International Federal Express or facsimile, and
shall be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by a
nationally recognized overnight carrier, one business day after so mailed, (iii)
if delivered by International Federal Express, two business days after so
mailed, (iv) if delivered by facsimile, upon electronic confirmation of receipt
and shall be delivered as addressed as follows:
(a) if to the Company, to:
EPIX Medical, Inc.
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 02142-1118Attention: Chief Executive Officer
Telecopy No.: (000) 000-0000
(b) if to the Investor, at its address on the signature page
hereto, or at such other address or addresses as may have been
furnished to the Company in writing.
B-4
8. CHANGES. This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investor.
9. HEADINGS. The headings of the various sections of this Agreement have been
inserted for convenience or reference only and shall not be deemed to be part of
this Agreement.
10. SEVERABILITY. In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
11. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law.
12. COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument, and shall become effective when
one or more counterparts have been signed by each party hereto and delivered to
the other parties.
B-5
INSTRUCTION SHEET FOR INVESTOR
(to be read in conjunction with the entire Share Purchase Agreement)
A. Complete the following items in the Share Purchase Agreement:
1. Provide the information regarding the Investor requested on
the signature page (page 1). The Agreement must be executed by an individual
authorized to bind the Investor.
2. Return the signed Share Purchase Agreement to:
[__________]
[__________]
[__________]
Attn: [__________]
Phone: [__________]
Telecopy: [__________]
An executed original Share Purchase Agreement or a telecopy thereof
must be received by 9:00 a.m. California time on a date to be determined and
distributed to the Investor at a later date.
B. Instructions regarding the transfer of funds for the purchase of Shares
will be telecopied to the Investor by the Company at a later date.
B-6
EXHIBIT C
LOCK-UP AGREEMENT FOR CERTAIN SHAREHOLDERS
[__________]
[__________]
[__________]
RE: EPIX Medical, Inc. (the "Company")
Ladies & Gentlemen:
The undersigned is an owner of record or beneficially of
certain shares of Common Stock of the Company ("Common Stock") or securities
convertible into or exchangeable or exercisable for Common Stock. The Company
proposes to carry out a public offering of Common Stock (the "Offering") for
which you will act as the placement agent. The undersigned recognizes that the
Offering will be of benefit to the undersigned and will benefit the Company by,
among other things, raising additional capital for its operations. The
undersigned acknowledges that you are relying on the representations and
agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into placement agent arrangements with the Company with
respect to the Offering.
In consideration of the foregoing, the undersigned hereby
agrees that the undersigned will not offer to sell, contract to sell, or
otherwise sell, dispose of, loan, pledge or grant any rights with respect to
(collectively, a "Disposition") any shares of Common Stock, any options or
warrants to purchase any shares of Common Stock or any securities convertible
into or exchangeable or exercisable for shares of Common Stock (collectively,
"Securities") now owned or hereafter acquired by such person or with respect to
which such person has or hereafter acquires the power of disposition, otherwise
than: (i) as a bona fide gift or gifts, provided the donee or donees thereof
agree in writing to be bound by this restriction; (ii) as a distribution to
partners or shareholders of such person, provided that the distributees thereof
agree in writing to be bound by the terms of this restriction; or (iii) with the
prior written consent of [________________________]. The foregoing restrictions
will terminate after the close of trading of the Common Stock on the 60th day of
(and including) the Closing Date (the "Lock-Up Period"). The foregoing
restriction has been expressly agreed to preclude the holder of the Securities
from engaging in any hedging or other transaction which is designed to or
reasonably expected to lead to or result in a Disposition of Securities during
the Lock-up Period, even if such Securities would be disposed of by someone
other than such holder. Such prohibited hedging or other transactions would
include, without limitation, any short sale (whether or not against the box) or
any purchase, sale or grant of any right (including, without limitation, any put
or call option) with respect to any Securities or with respect to any security
(other than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from, Securities. The undersigned also
agrees and consents to the entry of stop transfer instructions with the
Company's transfer agent and registrar against the transfer of shares of Common
Stock or other Securities held by the undersigned except in compliance with the
foregoing restrictions.
This agreement is irrevocable and will be binding on the
undersigned and the respective successors, heirs, personal representatives, and
assigns of the undersigned. In the event the Offering has not occurred on or
before [__________] this Lock-Up Agreement shall be of no further force or
effect.
Dated
----------------------------------
C-1
-----------------------------------------
Printed Name of Holder
By:
----------------------------------
Signature
-----------------------------------------
Printed Name of Person Signing
(and indicate capacity of person signing
if signing as custodian, trustee, or on
behalf of an entity)
C-2
EXHIBIT D
MATTERS TO BE COVERED IN THE OPINION OF COMPANY'S COUNSEL
(i) The Company is a corporation duly incorporated, validly existing and in good
standing under the laws of Delaware and has the corporate power and authority to
own and lease its property and assets and to carry on its business, as described
in the Prospectus Supplement;
(ii) The Company is duly qualified to do business as a foreign corporation and
is in good standing in the Commonwealth of Massachusetts. To such counsel's
knowledge, the Company does not own or control, directly or indirectly, any
corporation, association or other entity;
(iii) The authorized capital stock of the Company is as set forth in the
Prospectus Supplement under the caption "The Offering" as of the dates stated
therein;
(iv) All issued and outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable and, to
such counsel's knowledge, have not been issued in violation of or subject to any
preemptive right arising under the certificate of incorporation;
(v) The Shares to be issued by the Company pursuant to the terms of this
Agreement have been duly authorized and, upon issuance and delivery against
payment therefor in accordance with the terms hereof, will be duly and
validly issued and fully paid and nonassessable, and will not have been
issued in violation of or subject to any, to such counsel's knowledge,
contractual preemptive right, co-sale right, right of first refusal or other
similar right, other than any registration rights described in Opinion (xx)
hereof;
(vi) The holders of outstanding securities of the Company are not entitled to
preemptive or other rights to acquire the Shares pursuant to the Company's
certificate of incorporation or by-laws or under applicable laws; there are no
restrictions on subsequent transfers of the Shares pursuant to the Company's
certificate of incorporation or by-laws or under applicable laws (other than
restrictions related to the relationship of a holder of the Shares with the
Company).
(vii) The Company has the corporate power and authority to enter into this
Agreement and to issue, sell and deliver to the Investors, the Shares to be
issued and sold by it hereunder;
(viii) This Agreement has been duly authorized by all necessary corporate action
on the part of the Company and has been duly executed and delivered by the
Company;
(ix) The Registration Statement and the filing thereof with the Commission have
been duly authorized by and on behalf of the Company and the Registration
Statement has been duly executed pursuant to such authorization by and on behalf
of the Company;
(x) The performance of this Agreement and the consummation of the
transactions herein contemplated will not: (a) result in any violation of the
Company's certificate of incorporation or bylaws; or (b) to such counsel's
knowledge, result in a material breach or material violation of any of the
terms and provisions of, or constitute a default under, any bond, debenture,
note or other evidence of indebtedness, or any lease, contract, indenture,
mortgage, deed of trust, loan agreement, joint venture or other agreement or
instrument known to such counsel to which the Company is a party or by which
its properties are bound and which are filed as exhibits to the Registration
Statement, or to any document incorporated by reference therein, or any
applicable statute, rule or regulation known to such counsel or, to such
counsel's knowledge, any order, writ or decree of any court, government or
governmental agency or body having jurisdiction over the Company, or over any
of its properties or operations;
D-1
(xi) The Registration Statement has become effective under the Act and, to such
counsel's knowledge, no stop order suspending the effectiveness of the
Registration Statement or the use of the Basic Prospectus or the Prospectus
Supplement has been issued and, to such counsel's knowledge, no proceedings for
that purpose have been instituted or are pending or threatened under the Act and
any required filing of the Prospectus Supplement has been made in accordance
with Rule 424(b);
(xii) The Registration Statement and the Basic Prospectus as of the effective
date of the Registration Statement, and each amendment or supplement thereto,
including the prospectus Supplement, when filed, complied as to form in all
material respects with the requirements of the Act and the applicable rules and
regulations thereunder (except that such counsel need express no opinion as to
the financial statements, including supporting schedules, and financial data
derived therefrom contained in such documents or incorporated by reference
therein);
(xiii) Each document incorporated or deemed to be incorporated by reference in
the Registration Statement or Prospectus Supplement (other than the financial
statements and supporting schedules included therein, as to which no opinion
need be rendered) complied when so filed as to form in all material respects
with the Exchange Act;
(xiv) No consent, approval, authorization or order of or qualification with
any United States court, government or governmental agency or body having
jurisdiction over the Company, or over any of their properties or operations
is necessary in connection with the consummation by the Company of the
transactions herein contemplated, except such as have been obtained under the
Act;
(xv) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against the Company of a character which
would reasonably be expected individually or in the aggregate to have a
material adverse effect on the Company, other than those described in the
Registration Statement or the Prospectus Supplement;
(xvi) To such counsel's knowledge, neither the Company nor any of its
subsidiaries is presently in material violation of its respective charter or
bylaws, and neither the Company nor any of its subsidiaries is presently in
material breach of any applicable statute, rule or regulation of the United
States or the State of Delaware known to such counsel or, to such counsel's
knowledge, any order, writ or decree of any United States court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries, or over any of their properties or operations;
(xvii) To such counsel's knowledge, except as set forth in the Registration
Statement and Prospectus Supplement, no holders of Common Stock or other
securities of the Company have registration rights under the Act with respect
to securities of the Company and the offering contemplated by the Prospectus
Supplement and, except as set forth in the Registration Statement and
Prospectus Supplement, all holders of securities of the Company having rights
known to such counsel to registration of such Common Stock or other
securities, because of the filing of the Registration Statement by the
Company have, with respect to the offering contemplated by the Prospectus
Supplement, waived such rights or such rights have expired by reason of lapse
of time following notification of the Company's intent to file the
Registration
D-2
Statement or have included securities in the Registration Statement pursuant to
the exercise of and in full satisfaction of such rights; and
(xviii) The Company is not and, after receipt of payment for the Shares will not
be, an "investment company" or an entity "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Placement Agent, Placement Agent's Counsel and the independent
certified public accountants of the Company, at which such conferences the
contents of the Registration Statement and the Prospectus Supplement and related
matters were discussed, and although they have not verified the accuracy or
completeness of the statements contained in the Registration Statement or the
Prospectus Supplement, nothing has come to the attention of such counsel which
gives them reason to believe that, at the time the Registration Statement became
effective and at all times subsequent thereto up to and on the Closing Date, the
Registration Statement and the Prospectus Supplement and any amendment or
supplement thereto (except that such counsel need not comment with respect to
the financial statements including supporting schedules and other financial
information derived therefrom contained in such documents or incorporated
therein by reference) contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Such counsel need not take
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus Supplement (except as
set forth in paragraph (___)) or in any amendment or supplement thereto or in
any document incorporated by reference into the Prospectus Supplement. Such
counsel shall also state that the conditions for use of Form S-3 set forth in
the General Instructions thereto have been satisfied.
D-3
EXHIBIT E
MATTERS TO BE COVERED IN THE OPINION OF
INTELLECTUAL PROPERTY COUNSEL FOR THE COMPANY
Such counsel is familiar with the technology used by the
Company in its business and the manner of its use thereof and has read the
Registration Statement and the Prospectus Supplement, including particularly the
portions of the Registration Statement and the Prospectus Supplement referring
to patents, trade secrets, trademarks, service marks or other proprietary
information or materials and:
(i) As to the statements under the captions "Risk Factors - [If we are
unable to protect our proprietary methods and technologies, we may not
be able to commercialize our products and services]," "-[The scope of
our issued patents may not provide us with adequate protection of our
intellectual property, which would harm our competitive position],"
"-[Our success will depend partly on our ability to operate without
misappropriating the intellectual property rights of others]," "-[We
may need to initiate lawsuits to protect our patents and other
intellectual property rights, which could result in the forfeiture of
these rights]," and "-[Other rights and measures that we rely upon to
protect our intellectual property may not be adequate to protect our
products and services and could reduce our ability to compete in the
market]," nothing has come to the attention of such counsel which
caused them to believe that the above-mentioned sections of the
Registration Statement and any amendment or supplement thereto made
available and reviewed by such counsel, at the time the Registration
Statement became effective and at all times subsequent thereto up to
and on the Closing Date, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(ii) Such counsel knows of no material action, suit, claim or
proceeding relating to patents, patent rights or licenses, trademarks
or trademark rights, copyrights, collaborative research, licenses or
royalty arrangements or agreements or trade secrets, know-how or
proprietary techniques, including processes and substances, owned by or
affecting the business or operations of the Company which are pending
or threatened against the Company or any of its officers or directors.
(iii) The Company is listed in the records of the United States Patent
and Trademark Office as the holder of record of each of the granted
U.S. patents listed on a schedule to such opinion and each of the
applications listed on a schedule to such opinion and identified as
Company U.S. Patents. To the knowledge of such counsel, there are no
claims of third parties to any ownership interest or lien with respect
to any of the patents or applications listed as Company U.S. Patents.
Such counsel is not aware of any material defect in form in the
preparation or filing of the Company U.S. Patents on behalf of the
Company. To the knowledge of such counsel, the applications are being
pursued by the Company. To the knowledge of such counsel, the Company
owns as its sole property the patents and applications identified as
Company U.S. Patents.
(iv) The Company is listed in the records of the appropriate foreign
offices as the sole holder of record of the foreign patents and
applications listed on a schedule to such opinion and identified as the
Company Foreign Patents. Such counsel knows of no claims of third
parties to any ownership interest or lien with respect to the Company
Foreign Patents. Such counsel is not aware of any material defect of
form in the preparation or filing of the Company Foreign Patents on
behalf of the Company. To the knowledge of such counsel, the
applications listed in the
E-1
Company Foreign Patents are being pursued by the Company. To the
knowledge of such counsel, the Company owns as its sole property the
Company Foreign Patents. Company is also the owner of rights under the
patents and applications, both U.S. and foreign listed as jointly owned
or licensed (the "Joint Patents") in accordance with the respective
agreements covering those rights.
(v) Such counsel knows of no reason why any granted patent of the
Company U.S. Patents, Company Foreign Patents or Joint Patents are not
valid as issued. Such counsel has no knowledge of any reason why any
patent to be issued as a result of any application of the Company U.S.
Patents, Company Foreign Patents or Joint Patents would not be valid or
would not afford the Company enforceable patent protection with respect
thereto.
E-2
EXHIBIT F
FORM OF COMFORT LETTER
Pursuant to Subsection (g) of Section 5 of the Placement
Agency Agreement, the accountants shall furnish letters to the several Placement
Agent to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules examined by them and included or
incorporated by reference in the Registration Statement or the
Prospectus Supplement comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act,
as applicable, and the related published rules and regulations
thereunder; and, if applicable, they have made a review in accordance
with U.S. generally accepted accounting principles of the consolidated
interim financial statements, selected financial data and/or condensed
financial statements derived from audited financial statements of the
Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been furnished to the
representatives of the Placement Agent and are attached hereto;
(iii) They have made a review in accordance with U.S. generally
accepted accounting principles of the unaudited consolidated statements
of income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus Supplement as indicated in their
reports thereon copies of which are attached hereto; and on the basis
of specified procedures including inquiries of officials of the Company
who have responsibility for financial and accounting matters regarding
whether the unaudited consolidated financial statements referred to in
paragraph (v)(A)(i) below comply as to form in all material respects
with the applicable accounting requirements of the Act and the Exchange
Act and the related published rules and regulations, nothing came to
their attention that caused them to believe that the unaudited
consolidated financial statements do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the
Company for the three most recent fiscal years included in the
Prospectus Supplement agrees with the corresponding amounts (after
restatement where applicable) in the audited consolidated financial
statements for such three fiscal years which were included or
incorporated by reference in the Company's Annual Information Forms for
such fiscal years;
(v) On the basis of procedures in accordance with U.S. generally
accepted auditing standards, consisting of a reading of the unaudited
financial statements and other information referred to below, a reading
of the latest available interim financial statements of the Company and
its subsidiaries, inspection of the minute books of the Company and its
subsidiaries since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus Supplement,
inquiries of officials of the Company and its subsidiaries responsible
for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
F-1
(A) (i) the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included or incorporated by reference
in the Prospectus Supplement do not comply as to form in all
material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published
rules and regulations, or (ii) any material modifications
should be made to the unaudited consolidated statements of
income, consolidated balance sheets and consolidated
statements of cash flows included or incorporated by reference
in the Prospectus Supplement for them to be in conformity with
U.S. generally accepted accounting principles;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus Supplement do
not agree with the corresponding items in the unaudited
consolidated financial statements from which such data and
items were derived, and any such unaudited data and items were
not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited
consolidated financial statements included therein;
(C) the unaudited financial statements which were not
included in the Prospectus Supplement but from which were
derived the unaudited financial statements referred to in
Clause (A) and any unaudited income statement data and balance
sheet items included in the Prospectus Supplement and referred
to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements
included therein;
(D) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated capital stock or any increase in the
consolidated bank indebtedness or long-term debt (including
current portion of long-term debt) of the Company and its
subsidiaries, or any decreases in consolidated net current
assets, net assets or stockholders' equity, in each case as
compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus
Supplement, except in each case for changes, increases or
decreases which the Prospectus Supplement disclose have
occurred or may occur or which are described in such letter;
and
(E) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus Supplement to the specified date referred to in
Clause (D) there were any decreases in consolidated sales or
in the total or per share amounts of consolidated net income,
in each case as compared with the comparable period of the
preceding year, except in each case for increases or decreases
which the Prospectus Supplement disclose have occurred or may
occur or which are described in such letter.
(vi) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus Supplement and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures in accordance with U.S.
generally accepted accounting principles, with respect to certain
amounts, percentages and financial information specified by the
Placement Agent which are derived from the general accounting records
of the Company and its subsidiaries, which appear in the Prospectus
Supplement (excluding documents incorporated by reference) or in
documents incorporated by reference in the Prospectus Supplement
specified by the Placement Agent, and have compared certain of such
amounts, percentages and financial
F-2
information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
F-3
