EXHIBIT 1.1
4,110,000 UNITS
BIOPURE CORPORATION
UNDERWRITING AGREEMENT
January 12, 2006
Xxxxxx Xxxxx Securities, Inc., and
Noble International Investments, Inc.
As Representatives of the several
Underwriters named in Schedule I hereto
c/o Xxxxxx Xxxxx Securities, Inc.
000 Xxxxx Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xxxx Xxxxx, XX 00000
Dear Sirs:
Biopure Corporation, a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions contained herein, to sell to you and the
other underwriters named on Schedule I to this Agreement (the "Underwriters")
for whom you are acting as Representatives (the "Representatives"), the number
of securities of the Company identified on Schedule I to this Agreement of the
Company.
The Underwriters, severally and not jointly, agree to purchase from the
Company the number of Firm Units set forth opposite their respective names on
Schedule I attached hereto and made a part hereof at a purchase price (net of
discounts and commissions) of $0.7708 per Firm Unit. The Firm Units are to be
offered to the public (the "Offering") at the offering price of $0.82 per Firm
Unit. Each Firm Unit consists of one share of the Company's Class A common
stock, par value $0.01 per share (the "Common Stock"), and one warrant (the
"Warrant"). Each Warrant entitles its holder to exercise it to purchase one
share of Common Stock for $1.025 and shall be exercisable immediately for a
period of five (5) years commencing on the Effective Date (as defined
hereinbelow). The shares of Common Stock and warrants are separate securities
and are referred to collectively as Units for convenience only.
The Company has prepared and filed in conformity with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "SEC") Registration Statement (as hereinafter defined)
on Form S-3 (Nos. 333-114559). The Registration Statement and any post-effective
amendments have become effective; and no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceeding for that purpose
has been initiated or, to the Company's knowledge after reasonable
investigation, threatened by the SEC (the various parts of the Registration
Statement on Form S-3 including all exhibits thereto and including the documents
incorporated by reference in the prospectus contained in such Registration
Statement at the time such part of each Registration Statement became effective,
as amended at the time such part of such Registration Statement became effective
are hereinafter collectively called the "Registration Statement"; and the
prospectus, as supplemented by the prospectus supplement filed with the SEC on
January 10, 2006 included in the Registration Statement, and including the
documents incorporated by reference therein as of the date of such prospectus
supplement, is hereinafter called the "Prospectus"); any reference to any
amendment or supplement to the Prospectus shall be deemed to refer to and
include any documents filed after the date of such Prospectus under the
Securities Exchange of 1934, as amended (the "Exchange Act"), and incorporated
by reference in such Prospectus; and any reference to any amendment to the
Registration Statement shall be deemed to
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refer to and include any annual report of the Company filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement.
Copies of such Registration Statement and of the related Prospectus have
heretofore been delivered by the Company to you.
The Company understands that the Underwriters propose to make a public
offering of the shares and warrants, as set forth in and pursuant to the
Prospectus, as soon after the Effective Date and the date of this Agreement as
the Representatives deem advisable. The Company hereby confirms that the
Underwriters and dealers have been authorized to distribute or cause to be
distributed the Prospectus (as from time to time amended or supplemented if the
Company furnishes amendments or supplements thereto to the Underwriters).
1. Sale, Purchase, Delivery and Payment for the Shares. On the basis of the
representations, warranties and agreements contained in, and subject to the
terms and conditions of, this Agreement:
(a) The Company agrees to issue and sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from the
Company, at a purchase price of $0.7708 per Unit (net of discounts and
commissions) (the "Initial Price"), the number of Firm Units set forth opposite
the name of such Underwriter under the column "Number of Firm Units to be
Purchased" on Schedule I to this Agreement, subject to adjustment in accordance
with Section 6 hereof. The Firm Units are hereinafter collectively referred to
as the "Units," and the Units, the shares of Common Stock and the Warrants
included in the Units and the shares of Common Stock issuable upon exercise of
the Warrants are hereinafter referred to collectively as the "Public
Securities."
(b) Payment of the purchase price for, and delivery of the certificates
for, the Firm Units shall be made at 10:00 A.M., New York time, on January 17,
2006, or such other date, not later than the fifth (5th) business day
thereafter, or at such earlier time as shall be agreed upon by the
Representatives and the Company at the offices of the Representatives or at such
other place as shall be agreed upon by the Representatives and the Company. The
hour and date of delivery and payment for the Firm Units are called "Closing
Date." Payment for the Firm Units shall be made on the Closing Date by wire
transfer in Federal (same day) funds to the Company upon delivery to you of
certificates (in form and substance satisfactory to the Underwriters)
representing components of the Firm Units (or through the facilities of the
Depository Trust Company ("DTC")) for the account of the Underwriters. The Firm
Units shall be registered in such name or names and in such authorized
denominations as the Representatives may request in writing at least two (2)
full business days prior to the Closing Date. The Company will permit the
Representatives to examine and package the Firm Units for delivery, at least one
(1) full business day prior to the Closing Date. The Company shall not be
obligated to sell or deliver the Firm Units except upon tender of payment by the
Representatives for all the Firm Units.
(c) The Company hereby agrees to issue to the Representatives (and/or their
designees) on the Effective Date two warrants (the "Representatives' Warrants"),
each for the purchase of an aggregate of 246,600 shares of Common Stock
("Representatives' Shares"). The Representatives' Warrants shall be exercisable,
in whole or in part, for the period of four (4) years commencing on the first
anniversary of the Effective Date, one at an initial exercise price per
Representatives' Share of $0.984, which is equal to one hundred twenty percent
(120%) of the Initial Price, and the other an initial exercise price per
Representatives' Share of $1.025, which is equal to one hundred twenty-five
percent (125%) of the Initial Price. The Representatives' Warrants and the
shares of Common Stock issuable upon exercise of the Representatives' Warrants
are hereinafter referred to collectively as the "Representatives' Securities."
The Public Securities and the Representatives' Securities are hereinafter
referred to collectively as the "Securities." The Representatives understand and
agree that there are significant restrictions against
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transferring the Representatives' Warrants during the first one hundred eighty
(180) days after the Effective Date, as set forth in Section 3 of the
Representatives' Warrants.
Payment of the purchase price of, and delivery of the certificates for, the
Representatives' Warrants shall be made on the Closing Date. The Company shall
deliver to the Representatives, upon payment therefor, certificates for the
Representatives' Warrants in the name or names and in such authorized
denominations as the Representatives may request.
2. Representations and Warranties of the Company. For your own independent
business reasons, you have required the Company to make the following
representations and warranties as a condition to agreeing to execute this
Agreement. You understand, and anyone reviewing this Agreement should
understand, that disclosure regarding the Company and its business is contained
in the Prospectus or Registration Statement, and that no representation,
warranty, covenant or agreement contained in this Agreement is intended, or
should be construed, to modify the disclosure about the Company and its business
contained in the Prospectus or Registration Statement. The Company represents
and warrants to each Underwriter, as of the date hereof, as of the Closing Date
as follows:
(a) The Registration Statement in respect of the Securities has been filed
with the SEC; the Registration Statement and any post-effective amendment has
become effective; and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been initiated or, to the Company's knowledge after reasonable investigation,
threatened by the SEC. Any required filing of the Prospectus and any supplement
thereto pursuant to Rule 424(b) of the Rules has been or will be made in the
manner and within the time period required by such Rule 424(b).
(b)(i) The documents incorporated by reference in the Prospectus, when they
were filed with the SEC, conformed in and complied in all material respects with
the requirements of the Exchange Act, as applicable, and the Rules thereunder,
and none of such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed with the
SEC, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and the
Rules thereunder and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading. Notwithstanding the foregoing, none of
the representations and warranties in this paragraph shall apply to statements
in, or omissions from, the Prospectus made in reliance upon, and in conformity
with, information herein or otherwise furnished in writing by the
Representatives on behalf of the several Underwriters for use in the Prospectus.
With respect to the preceding sentence, the Company acknowledges that the only
information furnished in writing by the Representatives on behalf of the several
Underwriters for use in the Prospectus is the statements contained under the
caption "Underwriting" in the Prospectus.
(c) The agreements and documents described in the Registration Statement
and the Prospectus conform to the descriptions thereof contained therein and
there are no agreements or other documents required to be described in the
Registration Statement or the Prospectus or to be filed with the SEC as exhibits
to the Registration Statement that have not been so described or filed. Each
agreement or other instrument (however characterized or described) to which the
Company is a party or by which its property or business is or may be bound or
affected and (i) that is referred to in the Prospectus, or (ii) is material to
the Company's business, has been duly and validly executed by the Company, is in
full force and effect and is enforceable against the Company and, to the
Company's knowledge, the other parties thereto, in accordance with its terms,
except (x) as such enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors' rights generally, (y) as
enforceability of any
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indemnification or contribution provision may be limited under the federal and
state securities laws, and (z) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought, and none of such agreements or instruments has been assigned by
the Company, and neither the Company nor, to the Company's knowledge, any other
party is in breach or default thereunder and no event has occurred that, with
the lapse of time or the giving of notice, or both, would constitute a breach or
default thereunder. Performance by the Company of the material provisions of
such agreements or instruments will not result in a violation of any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company or
any of its assets or businesses, including, without limitation, those relating
to environmental laws and regulations.
(d) INTENTIONALLY DELETED.
(e) The disclosures in the Registration Statement summarizing the effects
of Federal, State and local regulation on the Company's business as currently
contemplated are correct summaries in all material respects and do not omit to
state a material fact.
(f) The statistical and related data included in the Registration Statement
are based on or derived from sources that the Company believes to be reliable
and accurate.
(g) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise specifically
stated therein, (i) the Company has not incurred any liabilities or obligations,
direct or contingent, which are material, individually or in the aggregate, to
the Company, taken as a whole, nor entered into any material transaction not in
the ordinary course of business (other than additional draws made under existing
credit facilities), (ii) except as contemplated by the Prospectus, there has not
been any change in the Company's capital stock or increase in long-term debt
(other than additional draws made under existing credit facilities) or any
payment of or declaration to pay any dividends or other distribution with
respect to the capital stock (or other) of the Company, (iii) the Company has
not sustained since the date of the latest audited financial statements included
in the Prospectus any material loss or interference with its business, whether
or not covered by insurance, otherwise than as contemplated by the Prospectus,
(iv) since the date of the latest audited financial statements included in the
Prospectus and except as contemplated by the Prospectus, there has not been any
material adverse change, or any development that could reasonably be expected to
result in a material adverse change, in or affecting the general affairs,
management, business, properties, prospects or condition (financial or
otherwise), stockholders' equity, or results of operations of the Company, taken
as a whole, nor have any events occurred which, singly or in the aggregate, have
a material adverse effect on the sale of the Securities or the consummation of
the transactions contemplated hereby (any change or event described in (iv) of
this clause (g), a "Material Adverse Effect"); and (v) the Company have good and
marketable title in fee simple to all material real property and good and
marketable title to all material personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as do not materially affect the value of
such property and do not materially interfere with the use made and proposed to
be made of such property by the Company; and any real property and buildings
held under lease by the Company are held by it under valid, subsisting and
enforceable leases with such exceptions as are described in the Prospectus or
are not material and do not interfere materially with the use made and proposed
to be made of such property and buildings by the Company.
(h) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with power and
authority (corporate and other) to own its properties and conduct its business
as described in the Prospectus and has been duly qualified to do business as a
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foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases properties
or conducts any business so as to require such qualification, except where the
failure to be so qualified or in good standing would not have a Material Adverse
Effect; and to the Company's knowledge, no proceeding has been instituted in any
such jurisdiction revoking, limiting or curtailing, or seeking to revoke, limit
or curtail, such power and authority or qualification.
(i) Ernst & Young LLP ("E&Y"), whose report is filed with the SEC as part
of the Registration Statement, are independent accountants as required by the
Act and the Rules. E&Y has not, during the periods covered by the financial
statements included in the Prospectus, provided to the Company any non-audit
services as prohibited in Section 10A(g) of the Exchange Act. There are no
material off-balance sheet transactions, arrangements, obligations (including
contingent obligations) or any other relationships with unconsolidated entities
or other persons, that may have a material current or a material future effect
on the Company's financial condition, changes in financial condition, results of
operations, liquidity, capital expenditures, capital resources, or significant
components of revenues or expenses.
(j) The financial statements, including the notes thereto and supporting
schedules included in the Registration Statement and Prospectus fairly present
in all material respects the financial position, the results of operations and
the cash flows of the Company at the dates and for the periods to which they
apply; and such financial statements have been prepared in conformity with
generally accepted accounting principles, consistently applied throughout the
periods involved; and the supporting schedules included in the Registration
Statement present fairly in all material respects the information required to be
stated therein.
(k) The Company had at the date or dates indicated in the Prospectus duly
authorized, issued and outstanding capitalization as set forth in the
Registration Statement and the Prospectus. Based on the assumptions stated in
the Registration Statement and the Prospectus, the Company will have on the
Closing Date the adjusted stock capitalization set forth therein. Except as
described in the Prospectus or in the documents incorporated by reference into
the Prospectus, the Company has not sold or issued any shares of Common Stock
during the six-month period preceding the date of the Prospectus, including any
sales pursuant to Rule 144A under, or Regulations D or S of, the Securities Act,
other than shares issued pursuant to employee benefit plans, qualified stock
options plans or other employee compensation plans or pursuant to outstanding
options, rights or warrants.
(l) All issued and outstanding securities of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; except as
described in or expressly contemplated by the Registration Statement, there are
no outstanding rights (including, without limitation, pre-emptive rights),
warrants or options to acquire, or instruments convertible into or exchangeable
for, any shares of capital stock or other equity interest in the Company, or,
other than agreements with a Representative, any contract, commitment,
agreement, understanding or arrangement of any kind relating to the issuance of
any capital stock of the Company, any such convertible or exchangeable
securities or any such rights, warrants or options. The authorized Common Stock
conforms in all material respects to all statements relating thereto contained
in the Registration Statement and the Prospectus. The offers and sales of the
outstanding Common Stock were at all relevant times either registered under the
Act and the applicable state securities or Blue Sky laws or, based in part on
the representations and warranties of the purchasers of such shares of Common
Stock, exempt from such registration requirements. The certificates evidencing
the Securities are in due and proper legal form and have been duly authorized
for issuance by the Company.
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(m) The Securities have been duly authorized and, when issued and paid for,
will be validly issued, fully paid and non-assessable; the holders thereof are
not and will not be subject to personal liability by reason of being such
holders; the Securities are not and will not be subject to the preemptive rights
of any holders of any security of the Company or similar contractual rights
granted by the Company; and all corporate action required to be taken for the
authorization, issuance and sale of the Securities has been duly and validly
taken. The Securities conform in all material respects to all statements with
respect thereto contained in the Registration Statement. When issued, the
Representatives' Warrants and the Warrants will constitute valid and binding
obligations of the Company to issue and sell, upon exercise thereof and payment
of the respective exercise prices therefor, the number and type of securities of
the Company called for thereby in accordance with the terms thereof and the
Representatives' Warrants and the Warrants are enforceable against the Company
in accordance with their respective terms, except (i) as such enforceability may
be limited by bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, (ii) as enforceability of any indemnification or
contribution provision may be limited under the federal and state securities
laws, and (iii) that the remedy of specific performance and injunctive and other
forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
(n) Except as disclosed in the Prospectus and shares of Common Stock
underlying warrants previously issued to placement agents and entitling such
placement agents to purchase an aggregate of less than 20,000 shares of Common
Stock at exercise prices in excess of $15.00 per share, no holders of any
securities of the Company or any rights exercisable for or convertible or
exchangeable into securities of the Company have the right to require the
Company to register any such securities of the Company under the Securities Act
or to include any such securities in a registration statement to be filed by the
Company.
(o) This Agreement and the Warrant Agreement (as hereinafter defined)
(collectively, the "Operative Agreements") have been duly and validly authorized
by the Company and, when executed and delivered, will constitute, the valid and
binding agreements of the Company, enforceable against the Company in accordance
with their respective terms, except (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (ii) as enforceability of any indemnification or contribution
provision may be limited under the federal and state securities laws, and (iii)
that the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought.
(p) The execution, delivery, and performance by the Company of the
Operative Agreements, the consummation by the Company of the transactions herein
and therein contemplated and the compliance by the Company with the terms hereof
and thereof do not and will not, with or without the giving of notice or the
lapse of time or both (i) result in a breach of, or conflict with any of the
terms and provisions of, or constitute a default under, or result in the
creation, modification, termination or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to the terms of
any agreement or instrument to which the Company is a party, (ii) result in any
violation of the provisions of the certificate of incorporation or the by-laws
of the Company; or (iii) violate any existing applicable law, rule, regulation,
judgment, order or decree of any governmental agency or court, domestic or
foreign, having jurisdiction over the Company or any of its properties or
business.
(q) No material default exists in the due performance and observance of any
term, covenant or condition of any material license, contract, indenture,
mortgage, deed of trust, note, loan or credit agreement, or any other agreement
or instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which the Company is a party or by which the Company
may
6
be bound or to which any of the properties or assets of the Company is subject.
The Company is not in violation of any term or provision of its certificate of
incorporation or by-laws or in violation of any material franchise, license,
permit, applicable law, rule, regulation, judgment or decree of any governmental
agency or court, domestic or foreign, having jurisdiction over the Company or
any of its properties or businesses.
(r) Except as disclosed in the Prospectus, the Company has all requisite
corporate power and authority, and has all necessary authorizations, approvals,
orders, licenses, certificates and permits of and from all governmental
regulatory officials and bodies that it needs as of the date hereof to conduct
its business as described in the Prospectus. The disclosures in the Registration
Statement concerning the effects of federal, state and local regulation on this
offering and the Company's business purpose as currently contemplated are
correct in all material respects and do not omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The Company has fulfilled and performed in all material respects all
of its material obligations with respect to such permits and no event has
occurred that allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the rights
of the Company thereunder. Except as may be required under the Securities Act
and state and foreign Blue Sky laws, no other permits are required to enter
into, deliver and perform this Agreement and to issue and sell the Securities.
(s) The Company has all corporate power and authority to enter into this
Agreement and to carry out the provisions and conditions hereof, and all
consents, authorizations, approvals and orders required in connection therewith
have been obtained. No consent, authorization or order of, and no filing with,
any court, government agency or other body is required for the valid issuance,
sale and delivery, of the Securities and the consummation of the transactions
and agreements contemplated by the Operative Agreements and as contemplated by
the Prospectus, except with respect to applicable federal and state securities
laws.
(t) To the Company's knowledge, all information contained in the
questionnaires ("Questionnaires") completed by each of the Company's officers,
directors, and stockholders and provided to the Underwriters is true and correct
in all material respects and the Company has not become aware of any information
which would cause the information disclosed in such Questionnaires to become
inaccurate and incorrect in all material respects.
(u) There is no action, suit, proceeding, inquiry, arbitration,
investigation, litigation or governmental proceeding pending or, to the
Company's knowledge, threatened against, or involving the Company or any
officer, director and stockholder which has not been disclosed in the
Registration Statement, the Prospectus or the Questionnaires or any part
thereof.
(v) The Company has not taken, nor will it take, directly or indirectly,
any action designed to or which might reasonably be expected to cause or result
in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the Common Stock
or any security of the Company to facilitate the sale or resale of any of the
Securities.
(w) The Company has not issued any order preventing or suspending the use
of any Preliminary Prospectus, Prospectus, Registration Statement or any part
thereof.
(x) Except as described in the Prospectus or agreements with a
Representatives, there are no claims, payments, arrangements, agreements or
understandings relating to the payment of a finder's, consulting or origination
fee by the Company with respect to the sale of the Securities hereunder or any
7
other arrangements, agreements or understandings of the Company that may affect
the Underwriters' compensation, as determined by the National Association of
Securities Dealers, Inc. ("NASD").
(y) The Company has not made any direct or indirect payments (in cash,
securities or otherwise) (i) to any person, as a finder's fee, consulting fee or
otherwise, in consideration of such person raising capital for the Company or
introducing to the Company persons who raised or provided capital to the
Company, (ii) to any NASD member or (iii) to any person or entity that has any
direct or indirect affiliation or association with any NASD member, within the
twelve (12) months prior to the date of the Prospectus Supplement, other than
payments to the Representatives or as disclosed in the filings with the SEC.
(z) INTENTIONALLY OMITTED.
(aa) Based on the Questionnaires, except as set forth on Schedule 2(aa), no
officer, director or any beneficial owner of the Company's unregistered
securities has any direct or indirect affiliation or association with any NASD
member. The Company will advise the Representatives and their counsel, if it
learns that any officer, director or owner of at least 5% of the Company's
outstanding Common Stock is or becomes an affiliate or associated person of an
NASD member participating in the Offering.
(bb) Neither the Company nor any other person acting on behalf of the
Company has, directly or indirectly, given or agreed to give any money, gift or
similar benefit (other than legal price concessions to customers in the ordinary
course of business) to any customer, supplier, employee or agent of a customer
or supplier, or official or employee of any governmental agency or
instrumentality of any government (domestic or foreign) or any political party
or candidate for office (domestic or foreign) or any political party or
candidate for office (domestic or foreign) or other person who was, is, or may
be in a position to help or hinder the business of the Company (or assist it in
connection with any actual or proposed transaction) that (i) might subject the
Company to any damage or penalty in any civil, criminal or governmental
litigation or proceeding, (ii) if not given in the past, might have had a
material adverse effect on the assets, business or operations of the Company as
reflected in any of the financial statements contained in the Prospectus or
(iii) if not continued in the future, might adversely affect the assets,
business, operations or prospects of the Company. The Company's internal
accounting controls and procedures are sufficient to cause the Company to comply
with the Foreign Corrupt Practices Act of 1977, as amended.
(cc) Any certificate signed by any duly authorized officer of the Company
and delivered to you or to your counsel shall be deemed a representation and
warranty by the Company to the Underwriters as to the matters covered thereby.
(dd) (i) The Company is in compliance in all material respects with all
rules, laws and regulation relating to the use, treatment, storage and disposal
of toxic substances and protection of health or the environment ("Environmental
Law") which are applicable to its business; (ii) the Company has not received
any notice from any governmental authority or third party of an asserted claim
under Environmental Laws; (iii) the Company has received all permits, licenses
or other approvals required of it under applicable Environmental Laws to conduct
its business and is in compliance with all terms and conditions of any such
permit, license or approval; (iv) to the Company's knowledge, no facts currently
exist that will require the Company to make future material capital expenditures
to comply with Environmental Laws; and (v) no property which is or has been
owned, leased or occupied by the Company has been designated as a Superfund site
pursuant to the Comprehensive Environmental Response, Compensation of Liability
Act of 1980, as amended (42 U.S.C. Section 9601, et. seq.) or otherwise
designated as a contaminated site under applicable state or local law. The
Company has not been named as a "potentially responsible party" under the CER,
CLA 1980.
8
(ee) The Company is not involved in any labor dispute nor, to the knowledge
of the Company, is any such dispute threatened, which dispute would have a
Material Adverse Effect. The Company is not aware of any existing or imminent
labor disturbance by the employees of any of its principal suppliers or
contractors which would have a Material Adverse Effect. The Company is not aware
of any threatened or pending litigation between the Company and any of its
executive officers which, if adversely determined, could have a Material Adverse
Effect and has no reason to believe that such officers will not remain in the
employment of the Company.
(ff) The Company owns or possesses or has the right to use the licenses,
copyrights, know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names (collectively, the "Intellectual
Property") presently employed by it in connection with, and material to,
individually or in the aggregate, its operations, except where the failure to
own, possess or have the right to use would not have a Material Adverse Effect;
and the Company has not received any notice of infringement of or conflict with
asserted rights of others with respect to the foregoing which, individually or
in the aggregate, has, or, would reasonably be expected to result in, a Material
Adverse Effect. To the knowledge of the Company, the use of such Intellectual
Property in connection with the business and operations of the Company as
described in the Prospectus does not infringe on the rights of any person,
except as would not, individually or in the aggregate, result in a Material
Adverse Effect.
(gg) All income tax returns required to be filed by the Company in all
jurisdictions have been timely and duly filed, other than those filings being
contested in good faith, except where the failure to so file any such returns
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. There are no income tax returns of the Company that are
currently being audited by state, local or federal taxing authorities or
agencies (and with respect to which the Company or its subsidiaries has received
notice), where the findings of such audit could reasonably be expected to result
in a Material Adverse Effect. All material taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due or claimed to be
due from such entities, have been paid, other than those being contested in good
faith and for which adequate reserves have been provided or those currently
payable without penalty or interest.
(hh) No employee, officer or director of the Company is subject to any
noncompetition agreement or non-solicitation agreement with any employer or
prior employer which could materially affect his ability to be a stockholder,
employee, officer and/or director of the Company.
(ii) No more than 45% of the "value" (as defined in Section 2(a)(41) of the
Investment Company Act of 1940, as amended ("Investment Company Act")) of the
Company's total assets consist of, and no more than 45% of the Company's net
income after taxes is derived from, securities other than "Government
securities" (as defined in Section 2(a)(16) of the Investment Company Act).
(jj) INTENTIONALLY DELETED.
(kk) There are no business relationships or related party transactions
involving the Company or any other person required to be described in the
Prospectus that have not been described as required.
(ll) The books, records and accounts of the Company accurately and fairly
reflect, in reasonable detail, the transactions in, and dispositions of, the
assets of, and the results of operations of, the Company. The Company maintains
a system of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance with management's
general or specific authorizations, (ii) transactions are recorded as necessary
to permit preparation of financial
9
statements in accordance with generally accepted accounting principles and to
maintain asset accountability, (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 the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences; the chief executive officer and the chief financial officer of the
Company have made all certifications required by the Xxxxxxxx-Xxxxx Act and any
related rules and regulations promulgated by the SEC, and the statements
contained in any such certification are complete and correct; the Company
maintains "disclosure controls and procedures" (as defined in Rule 13a-14(c)
under the Exchange Act); the Company is otherwise in compliance in all material
respects with all applicable effective provisions of the Xxxxxxxx-Xxxxx Act and
is actively taking steps to ensure that it will be in compliance with other
applicable provisions of the Xxxxxxxx-Xxxxx Act upon the effectiveness of such
provisions.
(mm) No transaction has occurred between or among the Company and any of
its officers or directors, stockholders or any affiliate or affiliates of any
such officer or director or stockholder that is required to be described in and
is not described in the Registration Statement and the Prospectus or in the
documents incorporated by reference into the Registration Statement and the
Prospectus. There is and has been no material failure on the part of the Company
and, to the knowledge of the Company, any of the Company's directors or
officers, in their capacities as such, to comply with any provision of the
Sarbanes Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith, including Section 402 related to loans and Sections 302
and 906 related to certifications.
(oo) The Company during the last 3 years has materially complied with, is
not in material violation of, and has not received any written notices of
violation with respect to, any foreign, federal, state or local statute, law or
regulation, including without limitation all statutes, rules, or regulations
applicable to the ownership, testing, development, manufacture, packaging,
processing, use, distribution, marketing, labeling, promotion, sale, offer for
sale, storage, import, export or disposal of any product or product candidate
manufactured or distributed by the Company ("Applicable Laws"), or any license,
certificate, approval, clearance, authorization, permit, supplement or amendment
required by any Applicable Laws ("Authorizations"). The Company possesses all
material Authorizations and such material Authorizations are in full force and
effect. The Company is, and its products or product candidates are, in
compliance in all material respects with all Authorizations and Applicable Laws,
including, but not limited to, all laws, statutes, rules, regulations, or orders
administered, issued or enforced by the Federal Food and Drug Administration
(the "FDA") or any other federal or foreign governmental authority having
authority over the Company or any of its products or product candidates
("Governmental Authority"). The Company during the last 3 years has not received
from the FDA or any other Governmental Authority any notice of adverse findings
, notices of violations, Warning Letters, criminal proceeding notices under
Section 305 of the Federal Food, Drug, and Cosmetic Act, or other similar
communication from the FDA or other Governmental Authority alleging or asserting
material noncompliance with Applicable Laws or any Authorizations, and during
the last 3 years there have been no seizures conducted or threatened by the FDA
or other Governmental Authority, and no recalls, market withdrawals, field
notifications, notifications of misbranding or adulteration, safety alerts or
similar actions relating to the safety or efficacy of the Company's products
conducted, requested or threatened by the FDA or other Governmental Authority
relating to the products sold by the Company. The Company has not, either
voluntarily or involuntarily, initiated, conducted, or issued or caused to be
initiated, conducted or issued, any recall, market withdrawal, safety alert,
"dear doctor" letter, or other similar notice or action relating to the alleged
lack of safety or efficacy of any of the Company's products or any alleged
product defect or violation, and the Company has no knowledge that any
Governmental Authority has initiated, conducted or intends to initiate any such
notice or action. The Company has not received notice of any claim, action,
suit, proceeding, hearing, enforcement, investigation, arbitration or other
similar action from any Governmental Authority alleging that any product
operation or activity is in material violation of any Applicable Laws or
Authorizations and has no knowledge that any such
10
Governmental Authority is considering any such claim, litigation, arbitration,
action, suit, investigation or proceeding. Each regulatory submission for the
Company's products has been filed, cleared and maintained in compliance in all
material respects with all Applicable Laws and Authorizations, including without
limitation applicable federal statutes, rules, regulations or orders
administered or promulgated by the FDA or other Governmental Authority, and all
laboratory and clinical studies, and tests that the Company has conducted and is
conducting to demonstrate the safety and efficacy of its products and product
candidates are in all material respects in compliance with accepted professional
scientific standards and all Applicable Laws and Authorizations in all material
respects. No filing or submission to the FDA or any other Governmental
Authority, intended to be the basis for any Authorization, contains any material
omission or material false information or presents data and results from the
studies in any manner other than fair, accurate, and complete presentation. The
Company is not aware, directly or indirectly of any other studies, tests,
trials, presentations, publications or other information that could reasonably
call into question the validity, completeness, or accuracy of any study, test,
trial, results or data relating to the Company's products or product candidates.
Except as described in the Prospectus, during the last 3 years the Company has
not received any notices or correspondence from any Governmental Authority
(including, but not limited to, the FDA) requiring suspension of any studies,
tests, or clinical trials conducted by or on behalf of the Company. Except as
disclosed in the Prospectus, the Company is not aware of any facts which are
reasonably likely to cause (A) the nonapproval or non-clearance, withdrawal, or
recall of any products sold or intended to be sold by the Company, or (B) a
suspension or revocation of any of the Company's Authorizations.
(pp) Other than as contemplated by or described in this Agreement and the
Prospectus, there is no broker, finder or other party that is entitled to
receive from the Company or any of its subsidiaries any brokerage or finder's
fee or other fee or commission as a result of any of the transactions
contemplated by this Agreement.
(qq) The operations of the Company are and have been conducted at all times
in compliance with applicable financial recordkeeping and reporting requirements
of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the "Money
Laundering Laws") and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company
with respect to the Money Laundering Laws is pending, or to the best knowledge
of the Company, threatened.
(rr) Neither the Company, nor, to its knowledge, any director, officer,
agent, employee or affiliate of the Company is currently subject to any U.S.
sanctions administered by the Office of Foreign Assets Control of the U.S.
Treasury Department ("OFAC"); and the Company will not directly or indirectly
use the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any person currently
subject to any U.S. sanctions administered by OFAC.
(ss) The Company has fulfilled its obligations, if any, under the minimum
funding standards of Section 302 of the U.S. Employee Retirement Income Security
Act of 1974 ("ERISA") and the regulations and published interpretations
thereunder with respect to each "plan" as defined in Section 3(3) of ERISA and
such regulations and published interpretations in which its employees are
eligible to participate and each such plan is in compliance in all material
respects with the presently applicable provisions of ERISA and such regulations
and published interpretations. No "Reportable Event" (as defined in 12 ERISA)
has occurred with respect to any "Pension Plan" (as defined in ERISA) for which
the Company could have any liability.
11
(tt) Each of the Company, its directors and officers has not distributed
and will not distribute prior to the later of (i) the Closing Date and (ii)
completion of the distribution of the Securities, any offering material in
connection with the offering and sale of the Securities other than the
Prospectus, the Registration Statement and other materials, if any, permitted by
the Securities Act.
(uu) The Company has taken no action designed to, or likely to have the
effect of, terminating the listing of its securities on the Nasdaq Stock Market,
nor has the Company received any notification that the Nasdaq Stock Market is
contemplating terminating such listing. Except as described in the Prospectus or
in the documents incorporated by reference into the Prospectus, the Company's
board of directors has validly appointed an audit committee whose composition
satisfies the requirements of the NASD Marketplace Rules. The Company's board of
directors and/or the audit committee has adopted a charter that satisfies the
requirements of such Marketplace Rules. Neither the Company's board of directors
nor the audit committee has been informed, nor is any director of the Company
aware, of (i) any significant deficiencies in the design or operation of the
Company's internal controls which could adversely affect the Company's ability
to record, process, summarize and report financial data or any material weakness
in the Company's internal controls; or (ii) any fraud, whether or not material,
that involves management or other employees of the Company who have a
significant role in the Company's internal controls.
3. Covenants of the Company. The Company covenants and agrees as follows:
(a) To prepare the prospectus supplement in a form approved by you (such
approval not to be unreasonably withheld or delayed) and to file such prospectus
supplement pursuant to Rule 424(b) under the Act not later than the SEC's close
of business on the second (2nd) business day following the execution and
delivery of this Agreement; to make no further amendment or any supplement to
the Registration Statement or Prospectus which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof other than as required by law; to file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company with the SEC pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus 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 notice thereof, of the
issuance by the SEC of any stop order or of any order preventing or suspending
the use of any prospectus, of the suspension of the qualification of the Shares
for offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the SEC for the
amending or supplementing of the Registration Statement or Prospectus 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 any prospectus or suspending
any such qualification, promptly to use its best efforts to obtain the
withdrawal of such order. If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs as a
result of which the Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under which
they were made not misleading, or if it shall be necessary to amend or
supplement the Prospectus to comply with the Securities Act or the Exchange Act
or the respective rules thereunder, the Company promptly will prepare and file
with the SEC, subject to the Company furnishing to the Representatives for their
review a copy thereof prior to filing, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such
compliance.
(b) Prior to 12:00 P.M., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish the
Underwriter with written and
12
electronic copies of the Prospectus in New York City in such quantities as you
may reasonably request, and, if the delivery of a Prospectus is required at any
time prior to the expiration of nine months after the time of issue of the
Prospectus in connection with the offering or sale of the Securities and if at
such time any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other reason
it shall be necessary during such period to amend or supplement the Prospectus
or to file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act or the Exchange Act, to notify you
and upon your reasonable request to file such document and to prepare and
furnish without charge to the Underwriter and to any dealer in securities as
many written and electronic copies as you may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance, and in case any
Underwriter is required to deliver a prospectus in connection with sales of any
of the Shares at any time nine months or more after the time of issue of the
Prospectus, upon your request but at the expense of such Underwriter, to prepare
and deliver to such Underwriter as many written and electronic copies as you may
request of an amended or supplemented Prospectus complying with Section 10(a)(3)
of the Securities Act.
(c) The Company shall have the right to engage the Representatives, on a
non-exclusive basis, as its agents for the solicitation of the exercise of the
Warrants. The Company, if it so engages the Representatives, will (i) assist the
Representatives with respect to such solicitation, if requested by the
Representatives, and (ii) at the Representatives' request, provide the
Representatives, and direct the Company's transfer and warrant agent to provide
to the Representatives, at the Company's cost, lists of the record and, to the
extent known, beneficial owners of, the Warrants. Commencing one (1) year from
the Effective Date, if it so engages the Representatives, the Company will pay
the Representatives a commission of five (5) percent of the exercise price of
the Warrants for each Warrant exercised after such date, payable upon payment of
the exercise price, on the terms provided for in the Warrant Agreement, only if
permitted under the rules and regulations of the NASD and only to the extent
that an investor who exercises his Warrants specifically designates, in writing,
that the Representatives solicited his exercise. The Representatives may engage
sub-agents in their solicitation efforts if engaged by the Company.
(d) The Company hereby agrees to pay on each of the Closing Date to the
extent not paid at Closing Date, all expenses incident to the performance of the
obligations of the Company under this Agreement, including but not limited to
(i) the preparation, printing, filing and mailing (including the payment of
postage with respect to such mailing) of the Registration Statement and exhibits
thereto, the Prospectuses and the printing and mailing of this Agreement and
related documents, including the cost of all copies thereof and any amendments
thereof or supplements thereto supplied to the Underwriters in quantities as may
reasonably be required by the Underwriters, (ii) the printing, issuance and
delivery of the Units, the shares of Common Stock and the Warrants included in
the Units and the Representative's Purchase Option, including any transfer or
other taxes payable thereon, (iii) filing fees, costs and expenses (including
disbursements for the Representatives' counsel) incurred in registering the
Offering with the NASD, (iv) costs of placing "tombstone" advertisements in The
Wall Street Journal, The New York Times and a third publication to be selected
by the Representatives not to exceed $5,000, (v) fees and disbursements of the
transfer and warrant agent, (vii) the Company's expenses associated with "due
diligence" meetings arranged by the Representatives including a videotape or
power-point presentation, and (viii) all other costs and expenses incident to
the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section 3(d), provided that the
Representatives provide reasonably detailed invoices. The Representatives may
deduct from the net proceeds of the Offering payable to the Company on the
Closing Date the expenses set forth herein to be paid by the Company to the
Representatives and others. If the Offering contemplated by this Agreement is
not consummated for any reason whatsoever for reasons not attributable to the
Underwriters, then the Company shall reimburse
13
the Underwriters in full for their reasonable out of pocket accountable expenses
actually incurred by the Representatives. The Representatives shall retain such
part of the non-accountable expense allowance previously paid, if any, as shall
equal its reasonable actual out-of-pocket accountable expenses and refund the
balance. If the amount previously paid is insufficient to cover such reasonable
actual out-of-pocket accountable expenses, the Company shall remain liable for
and promptly pay any other actual out-of-pocket accountable expenses.
(e) Neither the Company, nor any of its employees, directors or
stockholders (without the consent of the Representatives) has taken or will
take, directly or indirectly, any action designed to or that has constituted or
that might reasonably be expected to cause or result in, under the Exchange Act,
or otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Units.
(f) The Company will maintain a system of internal 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 in order to permit preparation of
financial statements in accordance with generally accepted accounting principles
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.
(g) The Company shall advise the NASD if it is aware that any 5% or greater
stockholder of the Company becomes an affiliate or associated person of an NASD
member participating in the distribution of the Public Securities.
(h) All corporate proceedings and other legal matters necessary to carry
out the provisions of this Agreement and the transactions contemplated hereby
shall have been done to the reasonable satisfaction to counsel for the
Underwriters.
(i) For a period of five (5) years from the Effective Date, the Company
shall not take any action or omit to take any action that would cause the
Company to be in breach or violation of its Certificate of Incorporation or
By-Laws.
4. Conditions of Underwriters' Obligations.
The obligations of the several Underwriters to purchase and pay for the
Units, as provided herein, shall be subject to the continuing accuracy of the
representations and warranties of the Company as of the date hereof and as of
the Closing Date to the accuracy of the statements of officers of the Company
made pursuant to the provisions hereof and to the performance by the Company of
its obligations hereunder and to the following conditions:
(a) The Prospectus shall have been filed with the SEC pursuant to Rule 424
within the applicable time period prescribed for such filing by the Rules under
the Securities Act and in accordance with Section 5(a) 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 SEC; and all requests for additional information
on the part of the SEC shall have been complied with to your reasonable
satisfaction of Cozen X'Xxxxxx, counsel to the Underwriters.
(b) By the Effective Date, the Representatives shall have received
clearance from the NASD as to the amount of compensation allowable or payable to
the Underwriters as described in the Prospectus.
14
(c) On the Closing Date, the Representatives shall have received the
favorable opinion of Ropes & Xxxx, LLP, counsel to the Company, dated the
Closing Date addressed to the Representatives and in previously agreed upon form
and substance.
To the extent deemed advisable by such counsel, such counsel may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials and on the opinions of other counsel satisfactory to the
Representatives as to matters which are governed by laws other than the laws of
the State of New York, the General Corporation Law of the State of Delaware and
the Federal laws of the United States; provided that such counsel shall state
that in their opinion the Underwriters and they are justified in relying on such
other opinions. Copies of such certificates and other opinions shall be
furnished to the Representatives and counsel for the Underwriters.
(d) The Representatives shall have received on the Closing Date from FDA
regulatory counsel to the Company to review the regulatory history and status of
the products and operations, an opinion, addressed to the Representatives and
dated as of the Closing Date, and stating in effect that, based upon review of
documents provided by the Company:
(i) The Registration Statement in all material respects adequately
and accurately describes the legal status of the Company and its
product candidates and the legal requirements under the Federal
Food, Drug and Cosmetic Act and the rules, regulations and
guidances promulgated thereunder applicable to the Company, its
manufacturing operations and/or its product candidates and for
obtaining and maintaining FDA approval to commercialize its
products in the United States.
(ii) Counsel is not aware of any lawsuit or regulatory proceeding,
pending or threatened, brought by or before the FDA, in which the
Company or any of its officers or directors, in their capacity as
such, is or would be the defendant or respondent, except as
described in the Prospectus, and, without an independent inquiry,
counsel is not aware of any lawsuit or regulatory proceeding,
pending or threatened, by federal regulatory authorities in which
the Company is or would be the defendant or respondent, except as
described in the Prospectus.
(iii) The statements in the Prospectus under the captions "Risk
Factors" relating to the Company's obtaining FDA and other
regulatory approvals, insofar as such statements constitute a
summary of documents referred to therein or matters of law, are
accurate in all material respects and accurately present the
information with respect to such documents and matters.
In addition, such counsel shall state that such counsel has participated in
conferences with officers and other representatives of the Company, at which
conferences the contents of the Registration Statement and the Prospectus and
related matters were discussed and, although such counsel is not passing upon
and does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement and the
Prospectus (except as specified in the foregoing opinion), on the basis of the
foregoing, no facts have come to the attention of such counsel which lead such
counsel to believe that (i) the Registration Statement at the time it became
effective (except with respect to the financial statements and notes and
schedules thereto and other financial data, as to which such counsel need
express no belief) 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, or that the Prospectus as amended or
supplemented (except with respect to the financial statements, notes and
schedules thereto and other financial data, as to which such counsel need make
no
15
statement) on the date thereof contained any untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or (ii) any document incorporated by reference in the Prospectus or
any further amendment or supplement to any such incorporated document made by
the Company, when they became effective or were filed with the SEC, as the case
may be, contained, in the case of a registration statement which became
effective under the Securities Act, any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, or, in the case of other
documents which were filed under the Exchange Act with the Commission, an untrue
statement of a material fact or omitted 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.
(e) At the time this Agreement is executed, and at the Closing Date you
shall have received a letter, addressed to the Representatives and in form and
substance satisfactory in all respects (including the non-material nature of the
changes or decreases, if any, referred to in clause (iii) below) to you and to
Cozen X'Xxxxxx from E&Y dated, respectively, as of the date of this Agreement
and as of the Closing Date:
(i) Confirming that they are independent accountants with respect to
the Company within the meaning of the Securities Act and the
applicable Regulations and that they have not, during the periods
covered by the financial statements included in the Prospectus,
provided to the Company any non-audit services, as such term is used
in Section 10A(g) of the Exchange Act;
(ii) Stating that in their opinion the financial statements of the
Company included in the Registration Statement and Prospectus comply
as to form in all material respects with the applicable accounting
requirements of the Act and the published Regulations thereunder;
(iii) Stating that, on the basis of a limited review which included a
reading of the latest available unaudited interim financial statements
of the Company (with an indication of the date of the latest available
unaudited interim financial statements), a reading of the latest
available minutes of the stockholders and board of directors and the
various committees of the board of directors, consultations with
officers and other employees of the Company responsible for financial
and accounting matters and other specified procedures and inquiries,
nothing has come to their attention which would lead them to believe
that (a) the unaudited financial statements of the Company included in
the Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and the Regulations or are not fairly presented in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial statements
of the Company included in the Registration Statement, (b) at a date
not later than five days prior to the Effective Date, Closing Date,
there was any change in the capital stock or long-term debt of the
Company, or any decrease in the stockholders' equity of the Company as
compared with amounts shown in the September 30, 2005 balance sheet
included in the Registration Statement, other than as set forth in or
contemplated by the Registration Statement, or, if there was any
decrease, setting forth the amount of such decrease, and (c) during
the period from a specified date to a specified date not later than
five days prior to the Effective Date, Closing Date, there was any
decrease in revenues, net earnings or net earnings per share of Common
Stock, in each case as compared with the corresponding period in the
preceding year and as compared with the corresponding
16
period in the preceding quarter, other than as set forth in or
contemplated by the Registration Statement, or, if there was any such
decrease, setting forth the amount of such decrease;
(iv) Stating that they have compared specific dollar amounts, numbers
of shares, percentages of revenues and earnings, statements and other
financial information pertaining to the Company set forth in the
Prospectus in each case to the extent that such amounts, numbers,
percentages, statements and information may be derived from the
general accounting records, including work sheets, of the Company and
excluding any questions requiring an interpretation by legal counsel,
with the results obtained from the application of specified readings,
inquiries and other appropriate procedures (which procedures do not
constitute an examination in accordance with generally accepted
auditing standards) set forth in the letter and found them to be in
agreement; and
(v) Statements as to such other matters incident to the transaction
contemplated hereby as you may reasonably request.
(f) At the Closing Date, the Representatives shall have received a
certificate of the Company signed by the Chairman of the Board or the President
and the Chief Financial Officer of the Company, dated the Closing Date,
respectively, to the effect that, to the their knowledge, (i) the Company has
performed all covenants and agreements and complied with all conditions required
by this Agreement to be performed or complied with by the Company prior to and
as of the Closing Date; (ii) the conditions set forth in Section 4 hereof have
been satisfied as of such date; (iii) as of Closing Date, the representations
and warranties of the Company set forth in Section 2 hereof are true and
correct; (iv) they have carefully examined the Registration Statement and the
Prospectus and, in their opinion (A) as of the Effective Date, the Registration
Statement and Prospectus did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, and (B) since the Effective Date no event
has occurred which should have been set forth in a supplement or otherwise
required an amendment to the Registration Statement or the Prospectus; and (iv)
no stop order suspending the effectiveness of the Registration Statement has
been issued and, to their knowledge, no proceedings for that purpose have been
instituted or are pending under the Securities Act. In addition, the
Representatives will have received such other and further certificates of
officers of the Company as the Representatives may reasonably request.
(g) At the Closing Date, the Representatives shall have received a
certificate of the Company signed by the Secretary or Assistant Secretary of the
Company, dated the Closing Date, respectively, certifying (i) that the copies of
the by-laws and certificate of incorporation of the Company attached thereto are
true and complete, have not been modified and are in full force and effect, (ii)
that the resolutions relating to the public offering contemplated by this
Agreement are in full force and effect and have not been modified, (iii) all
correspondence between the Company or its counsel and the SEC, and (iv) as to
the incumbency of the officers of the Company. The documents referred to in such
certificate shall be attached to such certificate.
(h) Prior to and on the Closing Date, (i) there shall have been no material
adverse change or development involving a prospective material adverse change in
the condition or the business activities, financial or otherwise, of the Company
from the latest dates as of which such condition is set forth in the
Registration Statement and Prospectus, (ii) no action suit or proceeding, at law
or in equity, shall have been pending or threatened against the Company before
or by any court or federal or state commission, board or other administrative
agency wherein an unfavorable decision, ruling or finding may materially
adversely affect the business, operations or financial condition or income of
the Company, except as set
17
forth in the Registration Statement and Prospectus, (iii) no stop order shall
have been issued under the Act and no proceedings therefor shall have been
initiated or threatened by the SEC, and (iv) the Registration Statement and the
Prospectus and any amendments or supplements thereto shall contain all material
statements which are required to be stated therein in accordance with the
Securities Act and the Regulations and shall conform in all material respects to
the requirements of the Securities Act and the Regulations, and neither the
Registration Statement nor the Prospectus nor any amendment or supplement
thereto shall contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(i) On the Closing Date, the Company shall have delivered to the
Representatives executed copies of each of the Operative Documents.
(j) All proceedings taken in connection with the authorization, issuance or
sale of the Securities as herein contemplated shall be reasonably satisfactory
in form and substance to you and to Cozen X'Xxxxxx and you shall have received
from such counsel a favorable opinion, dated the Closing Date, with respect to
such of these proceedings as you may reasonably require. On or prior to the
Effective Date, the Closing Date, counsel for the Underwriters shall have been
furnished such documents, certificates and opinions as they may reasonably
require for the purpose of enabling them to review or pass upon the matters
referred to in this Section 4(j), or in order to evidence the accuracy,
completeness or satisfaction of any of the representations, warranties or
conditions herein contained.
5. Indemnification.
(a) Subject to the conditions set forth below and to the extent permitted
by law, the Company agrees to indemnify and hold harmless each of the
Underwriters and each of their respective directors, officers and employees and
each person, if any, who controls any such Underwriter (the "Controlling
Person") within the meaning of Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, against any and all loss, liability, claim, damage and
expense whatsoever (including but not limited to any and all legal or other
expenses reasonably incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, whether
arising out of any action between any of the Underwriters and the Company or
between any of the Underwriters and any third party or otherwise) to which they
or any of them may become subject under the Securities Act, the Exchange Act or
any other statute or at common law or otherwise or under the laws of foreign
countries, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in (i) any Preliminary Prospectus, the
Registration Statement or the Prospectus (as from time to time each may be
amended and supplemented); (ii) in any post-effective amendment or amendments or
any new registration statement and prospectus in which is included securities of
the Company issued or issuable upon exercise of the Representatives' Purchase
Option; 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,
unless such statement or omission was made in reliance upon and in conformity
with written information furnished to the Company with respect to an Underwriter
by or on behalf of such Underwriter expressly for use in any Preliminary
Prospectus, the Registration Statement or Prospectus, or any amendment or
supplement thereof. With respect to any untrue statement or omission or alleged
untrue statement or omission made in the Preliminary Prospectus, the indemnity
agreement contained in this paragraph shall not inure to the benefit of any
Underwriter to the extent that any loss, liability, claim, damage or expense of
such Underwriter results from the fact that a copy of the Prospectus was not
given or sent to the person asserting any such loss, liability, claim or damage
at or prior to the written confirmation of sale of the Securities to such person
as required by the Act and the Regulations, and if the untrue statement or
omission has been corrected in the Prospectus, unless such failure to deliver
the Prospectus was a result of non-compliance by the Company with its
18
obligations under Section 3 hereof. The Company agrees promptly to notify the
Representatives of the commencement of any litigation or proceedings against the
Company or any of its officers, directors or controlling persons in connection
with the issue and sale of the Securities or in connection with the Registration
Statement or Prospectus.
(b) If any action is brought against an Underwriter or a Controlling person
in respect of which indemnity may be sought against the Company pursuant to
Section 5(a), such Underwriter or Selected Dealer shall promptly notify the
Company in writing of the institution of such action and the Company shall
assume the defense of such action, including the employment and fees of counsel
(subject to the reasonable approval of such Underwriter and payment of actual
expenses. Such Underwriter or Controlling Person shall have the right to employ
its or their own counsel in any such case, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or Controlling Person unless
(i) the employment of such counsel at the expense of the Company shall have been
authorized in writing by the Company in connection with the defense of such
action, or (ii) the Company shall not have employed counsel to have charge of
the defense of such action, or (iii) such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to the Company (in
which case the Company shall not have the right to direct the defense of such
action on behalf of the indemnified party or parties), in any of which events
the reasonable fees and expenses of not more than one additional firm of
attorneys selected by the Underwriter and/or Controlling Person shall be borne
by the Company. Notwithstanding anything to the contrary contained herein, if
the Underwriter or Controlling Person shall assume the defense of such action as
provided above, the Company shall have the right to approve the terms of any
settlement of such action which approval shall not be unreasonably withheld.
(c) Each Underwriter, severally and not jointly, agrees to indemnify and
hold harmless the Company, its directors, officers and employees and agents who
control the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act against any and all loss, liability, claim,
damage and expense described in the foregoing indemnity from the Company to the
several Underwriters, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions made in any Preliminary
Prospectus, the Registration Statement or Prospectus or any amendment or
supplement thereto or in any application, in reliance upon, and in strict
conformity with, written information furnished to the Company with respect to
such Underwriter by or on behalf of the Underwriter expressly for use in such
Preliminary Prospectus, the Registration Statement or Prospectus or any
amendment or supplement thereto or in any such application or in any
"prospectus" (within the meaning of the Securities Act) or other offering
material used by the Underwriters in the offering or sale of the Units other
than the most recent Prospectus. In case any action shall be brought against the
Company or any other person so indemnified based on any Preliminary Prospectus,
the Registration Statement or Prospectus or any amendment or supplement thereto
or any application, and in respect of which indemnity may be sought against any
Underwriter, such Underwriter shall have the rights and duties given to the
Company, and the Company and each other person so indemnified shall have the
rights and duties given to the several Underwriters by the provisions of Section
5(b).
(d) In order to provide for just and equitable contribution under the
Securities Act in any case in which (i) any person entitled to indemnification
under this Section 5 makes claim for indemnification pursuant hereto but it is
judicially determined (by the entry of a final judgment or decree by a court of
competent jurisdiction and the expiration of time to appeal or the denial of the
last right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 5 provides for indemnification in
such case, or (ii) contribution under the Securities Act, the Exchange Act or
otherwise may be required on the part of any such person in circumstances for
which indemnification is provided under this Section 5, then, and in each such
case, the Company and the Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by
19
said indemnity agreement incurred by the Company and the Underwriters, as
incurred, in such proportions that the Underwriters are responsible for that
portion represented by the percentage that the underwriting discount appearing
on the cover page of the Prospectus bears to the initial offering price
appearing thereon and the Company is responsible for the balance; provided,
that, no person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. Notwithstanding
the provisions of this Section 5(d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Public Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay in respect of such losses, liabilities,
claims, damages and expenses. For purposes of this Section, each director,
officer and employee of an Underwriter or the Company, as applicable, and each
person, if any, who controls an Underwriter or the Company, as applicable,
within the meaning of Section 15 of the Securities Act shall have the same
rights to contribution as the Underwriters or the Company, as applicable.
(e) Within fifteen (15) days after receipt by any party to this Agreement
(or its representatives) of notice of the commencement of any action, suit or
proceeding, such party will, if a claim for contribution in respect thereof is
to be made against another party (the "Contributing Party"), notify the
Contributing Party of the commencement thereof, but the omission to so notify
the contributing party will not relieve it from any liability which it may have
to any other party other than for contribution hereunder. In case any such
action, suit or proceeding is brought against any party, and such party notifies
a Contributing Party or its representatives of the commencement thereof within
the aforesaid fifteen (15) days, the contributing party will be entitled to
participate therein with the notifying party and any other contributing party
similarly notified. Any such Contributing Party shall not be liable to any party
seeking contribution on account of any settlement of any claim, action or
proceeding effected by such party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of such Contributing Party. The
contribution provisions contained in this Section are intended to supersede, to
the extent permitted by law, any right to contribution under the Securities Act,
the Exchange Act or otherwise available. The Underwriters' obligations to
contribute pursuant to this Section 5(e) are several and not joint.
6. Default by an Underwriter.
(a) If any Underwriter or Underwriters shall default in its or their
obligations to purchase the Firm Units and if the number of the Firm Units with
respect to which such default relates does not exceed in the aggregate 10% of
the number of Firm Units that all Underwriters have agreed to purchase
hereunder, then such Firm Units to which the default relates shall be purchased
by the non-defaulting Underwriters in proportion to their respective commitments
hereunder.
(b) In the event that the default addressed in Section 6(a) above relates
to more than 10% of the Firm Units, you may in your discretion arrange for
yourself or for another party or parties to purchase such Firm Units to which
such default relates on the terms contained herein. If within one (1) business
day after such default relating to more than 10% of the Firm Units you do not
arrange for the purchase of such Firm Units, then the Company shall be entitled
to a further period of one (1) business day within which to procure another
party or parties satisfactory to you to purchase said Firm Units on such terms.
In the event that neither you nor the Company arrange for the purchase of the
Firm Units to which a default relates as provided in this Section 6, this
Agreement may be terminated by you or the Company without liability on the part
of the Company (except as provided in Sections 3(k) and 5 hereof) or the several
Underwriters (except as provided in Section 5 hereof); provided, however, that
nothing herein shall relieve a defaulting Underwriter of its liability, if any,
to the other several Underwriters and to the Company for damages occasioned by
its default hereunder.
20
(c) In the event that the Firm Units to which the default relates are to be
purchased by the non-defaulting Underwriters, or are to be purchased by another
party or parties as aforesaid, you or the Company shall have the right to
postpone the Closing Date for a reasonable period, but not in any event
exceeding five business days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus or in any other
documents and arrangements, and the Company agrees to file promptly any
amendment to the Registration Statement or the Prospectus that in the opinion of
counsel for the Underwriters may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any party substituted
under this Section 6 with like effect as if it had originally been a party to
this Agreement with respect to such Securities.
7. Representations and Agreements to Survive Delivery. Except as the
context otherwise requires, all representations, warranties and agreements
contained in this Agreement shall be deemed to be representations, warranties
and agreements at the Closing Dates and such representations, warranties and
agreements of the Underwriters and Company, including the indemnity agreements
contained in Section 5 hereof, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any Underwriter,
the Company or any controlling person, and shall survive the issuance and
delivery of the Securities to the several Underwriters until the earlier of the
expiration of any applicable statute of limitations and the seventh anniversary
of the later of the Closing Date at which time the representations, warranties
and agreements shall terminate and be of no further force and effect.
8. Effective Date of This Agreement and Termination.
(a) This Agreement shall become effective on the date hereof. (the
"Effective Date").
(b) You shall have the right to terminate this Agreement at any time prior
to any Closing Date, (i) if any domestic or international event or act or
occurrence has materially disrupted, or in your opinion will in the immediate
future materially disrupt, general securities markets in the United States; or
(ii) if trading on the New York Stock Exchange, the American Stock Exchange, the
Boston Stock Exchange or on the NASD OTC Bulletin Board (or successor trading
market) shall have been suspended, or minimum or maximum prices for trading
shall have been fixed, or maximum ranges for prices for securities shall have
been fixed, or maximum ranges for prices for securities shall have been required
on the NASD OTC Bulletin Board or by order of the SEC or any other government
authority having jurisdiction, or (iii) if the United States shall have become
involved in a new war or an increase in major hostilities, or (iv) if a banking
moratorium has been declared by a New York State or federal authority, or (v) if
a moratorium on foreign exchange trading has been declared which materially
adversely impacts the United States securities market, or (vi) if the Company
shall have sustained a material loss by fire, flood, accident, hurricane,
earthquake, theft, sabotage or other calamity or malicious act which, whether or
not such loss shall have been insured, will, in your opinion, make it
inadvisable to proceed with the delivery of the Units, or (vii) if any of the
Company's representations, warranties or covenants hereunder are breached, and
if not otherwise qualified by materiality, there is a material adverse effect or
(viii) if the Representatives shall have become aware after the date hereof of
such a material adverse change in the conditions or prospects of the Company, or
such adverse material change in general market conditions, including without
limitation as a result of terrorist activities after the date hereof, as in the
Representatives' judgment would make it impracticable to proceed with the
offering, sale and/or delivery of the Units or to enforce contracts made by the
Underwriters for the sale of the Securities.
(c) In the event that this Agreement shall not be carried out for any
reason whatsoever not reasonably attributable to the Underwriters, within the
time specified herein or any extensions thereof pursuant to the terms herein,
the obligations of the Company to pay the out of pocket expenses related to the
transactions contemplated herein shall be governed by Section 3(d) hereof.
21
(d) Notwithstanding any contrary provision contained in this Agreement, any
election hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5 shall not be in
any way effected by, such election or termination or failure to carry out the
terms of this Agreement or any part hereof.
9. Miscellaneous.
(a) All communications hereunder, except as herein otherwise specifically
provided, shall be in writing and shall be mailed, delivered or telecopied and
confirmed and shall be deemed given when so delivered or telecopied and
confirmed or if mailed, two days after such mailing.
If to the Representatives:
XXXXXX XXXXX SECURITIES, INC.
000 Xxxxx Xxxxxxx Xxxxxxx, 0xx Xxxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxx, Chief Executive Officer
NOBLE INTERNATIONAL INVESTMENTS, INC.
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
Attn: Xxxx Xxxxxxx, Director, Capital Markets
Copy to: COZEN X'XXXXXX
0000 X Xxxxxx, XX, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxx X. Xx Xxxxxxx, Esq.
If to the Company:
BIOPURE CORPORATION
00 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Zafiris Zafirelis, President & Chief Executive Officer
with a copy to: Xxxx Xxxxx, Senior VP & General Counsel
(b) The headings contained herein are for the sole purpose of convenience
of reference, and shall not in any way limit or affect the meaning or
interpretation of any of the terms or provisions of this Agreement.
(c) This Agreement may only be amended by a written instrument executed by
each of the parties hereto.
(d) This Agreement (together with the other agreements and documents being
delivered pursuant to or in connection with this Agreement) constitute the
entire agreement of the parties hereto with respect to the subject matter hereof
and thereof, and supersede all prior agreements and understandings of the
parties, oral and written, with respect to the subject matter hereof.
22
(e) This Agreement shall inure solely to the benefit of and shall be
binding upon the Representatives, the Underwriters, the Company and the
controlling persons, directors and officers referred to in Section 5 hereof, and
their respective successors, legal representatives and assigns, and no other
person shall have or be construed to have any legal or equitable right, remedy
or claim under or in respect of or by virtue of this Agreement or any provisions
herein contained.
(f) This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without giving effect to
conflict of laws. The Company hereby agrees that any action, proceeding or claim
against it arising out of, relating in any way to this Agreement shall be
brought and enforced in the courts of the State of New York of the United States
of America for the Southern District of New York, and irrevocably submits to
such jurisdiction, which jurisdiction shall be exclusive. The Company hereby
waives any objection to such exclusive jurisdiction and that such courts
represent an inconvenient forum. Any such process or summons to be served upon
the Company may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to it at
the address set forth in Section 9(a) hereof. Such mailing shall be deemed
personal service and shall be legal and binding upon the Company in any action,
proceeding or claim. The Company agrees that the prevailing party(ies) in any
such action shall be entitled to recover from the other party(ies) all of its
reasonable attorneys' fees and expenses relating to such action or proceeding
and/or incurred in connection with the preparation therefor.
(g) This Agreement may be executed in one or more counterparts, and by the
different parties hereto in separate counterparts, each of which shall be deemed
to be an original, but all of which taken together shall constitute one and the
same agreement, and shall become effective when one or more counterparts has
been signed by each of the parties hereto and delivered to each of the other
parties hereto.
(h) The failure of any of the parties hereto to at any time enforce any of
the provisions of this Agreement shall not be deemed or construed to be a waiver
of any such provision, nor to in any way effect the validity of this Agreement
or any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any breach,
non-compliance or non-fulfillment of any of the provisions of this Agreement
shall be effective unless set forth in a written instrument executed by the
party or parties against whom or which enforcement of such waiver is sought; and
no waiver of any such breach, non-compliance or non-fulfillment shall be
construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
(i) Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
23
If the foregoing correctly sets forth the understanding between the
Underwriters and the Company, please so indicate in the space provided below for
that purpose, whereupon this letter shall constitute a binding agreement between
us.
Very truly yours,
BIOPURE CORPORATION
By:
------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
Accepted on the date first above
written.
XXXXXX XXXXX SECURITIES, INC.
Acting severally on behalf of itself
and as one of the Representatives of
the several Underwriters named in
Schedule I annexed hereto
By:
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
NOBLE INTERNATIONAL INVESTMENTS, INC.
Acting severally on behalf of itself
and as one of the Representatives of
the several Underwriters named in
Schedule I annexed hereto
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
24
SCHEDULE I
BIOPURE CORPORATION.
4,110,000 UNITS
UNDERWRITER NUMBER OF FIRM UNITS TO BE PURCHASED
----------- ------------------------------------
Xxxxxx Xxxxx Securities, Inc. 2,055,000
Noble International Investments, Inc. 2,055,000
Total 4,110,000
