<PAGE>
EXECUTION COPY
BIOPURE CORPORATION
Up to 40,000,000 Shares
Common Stock
($0.01 Par Value)
Warrants to Purchase Up to 20,000,000 Shares
Common Stock
($0.01 Par Value)
AGENCY AGREEMENT
December 8, 2004
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EXECUTION COPY
AGENCY AGREEMENT
December 8, 2004
C.E. Unterberg, Towbin, LLC,
as Agent
350 Madison Avenue
New York, NY 10017
Ladies and Gentlemen:
Biopure
Corporation, a Delaware corporation (the "Company"), proposes,
upon the terms and subject to the
conditions set forth in this Agreement
(together with the exhibits attached hereto
(the "Agreement") to offer for sale
to the public pursuant to a "best efforts"
underwritten offering (the
"Offering") up to 40,000,000 shares of
Class A Common Stock, $.01 par value per
share (the "Common Stock"), of the Company,
each with one associated preferred
stock purchase (a "Right") as described in
the Rights Agreement defined below
(such 40,000,000 shares of Common Stock
together with such Rights, the
"Shares"), and warrants to purchase up to
an aggregate of 20,000,000 shares of
Common Stock (to the extent the Rights
Agreement is in effect on the date of
exercise of such Warrant, each such share
with one associated Right) (the
"Warrants" and, together with the Shares,
the "Securities"), which Warrants will
be offered and issued on the basis of one
Warrant to purchase one share of
Common Stock for each two Shares purchased
in the Offering. In connection with
the Offering, the Company desires to engage
C.E. Unterberg, Towbin, LLC as its
exclusive agent (the "Agent") to offer the
Securities to the public on a
reasonable "best efforts" basis, upon the
terms and subject to the conditions
set forth in this Agreement. The Securities
and the Offering are described in
the Prospectus that is referred to
below.
The
Company has prepared and filed, in accordance with the provisions
of
the Securities Act of 1933, as amended, and
the rules and regulations thereunder
(collectively, the "Act"), with the
Securities and Exchange Commission (the
"Commission") a registration statement
under the Act on Form S-3 (File No.
333-114559) filed with the Commission on
April 16, 2004, and amendment No. 1 to
such registration statement filed with the
Commission on November 16, 2004 (such
registration statement as amended or
supplemented (other than supplements
relating to offerings of securities other
than the Offering) from time to time,
the "registration statement"). The
registration statement has been declared by
the Commission to be effective under the
Act. The Company will file with the
Commission pursuant to Rule 424(b) under
the Act a final prospectus supplement
to the Basic Prospectus (as defined below),
describing the Securities and the
offering thereof, in such form as has been
provided to or discussed with, and
approved, by the Agent.
The term
"Registration Statement" as used in this Agreement means the
registration statement, at the time it
became effective and as supplemented
(other than supplements relating to
offerings of securities other than the
Offering) or amended, including (i) all
financial schedules and exhibits
thereto, and (ii) all documents
incorporated by reference or deemed to be
incorporated by reference therein, which
schedules, exhibits and documents have
been filed with the Commission pursuant to
its Electronic Data Gathering
Analysis and Retrieval System ("EDGAR").
The term "Basic Prospectus"
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as used in this Agreement means the basic
prospectus dated November 18, 2004 in
the same form as the basic prospectus
included in the Registration Statement and
filed with the Commission on November 16,
2004 for use in connection with the
offer and/or sale of the Securities
pursuant to this Agreement. "Preliminary
Prospectus Supplement" shall mean any
preliminary prospectus supplement to the
Basic Prospectus which describes the
Securities and the Offering and is used
prior to filing of the Prospectus
Supplement, together with the Basic
Prospectus. The term "Prospectus
Supplement" as used in this Agreement means any
final prospectus supplement specifically
relating to the Securities, in the form
filed with, or transmitted for filing to,
the Commission pursuant to Rule 424
under the Act. The term "Prospectus" as
used in this Agreement means the Basic
Prospectus as supplemented by the
Prospectus Supplement except that if such
Basic Prospectus is amended or supplemented
(other than supplements relating to
offerings of securities other than the
Offering) on or prior to the date on
which the Prospectus Supplement was first
filed pursuant to Rule 424, the term
"Prospectus" shall refer to the Basic
Prospectus as so amended or supplemented
and as supplemented by the Prospectus
Supplement. Any reference herein to the
registration statement, the Registration
Statement, the Basic Prospectus, any
Preliminary Prospectus Supplement, any
Prospectus Supplement or the Prospectus
shall be deemed to refer to and include (i)
the documents incorporated by
reference therein pursuant to Form S-3 (the
"Incorporated Documents") and (ii)
the copy of the Registration Statement, the
Basic Prospectus, the Prospectus
Supplement, the Prospectus or the
Incorporated Documents filed with the
Commission pursuant to EDGAR. Any reference
herein to the terms "amend,"
"amendment" or "supplement" with respect to
the Registration Statement, the
Basic Prospectus, the Preliminary
Prospectus Supplement, the Prospectus
Supplement or the Prospectus shall be
deemed to refer to and include the filing
of any document under the Securities
Exchange Act of 1934, as amended, and the
rules and regulations thereunder
(collectively, the "Exchange Act") after the
effective date of the Registration
Statement, or the date of the Basic
Prospectus, the Preliminary Prospectus
Supplement or the Prospectus Supplement,
as the case may be, deemed to be
incorporated therein by reference. As used
herein, "business day" shall mean a day on
which the New York Stock Exchange is
open for trading.
The
Company hereby confirms its agreement with the Agent as
follows:
1.
Agreement to Act as Agent. Upon the basis of the representations
and
warranties of the Company and subject to
the terms and conditions set forth in
this Agreement and in the letter agreement
dated December 2, 2004 between the
Company and the Agent (the "Engagement
Letter"), the Company engages the Agent
to act as its exclusive agent, on a
reasonable "best efforts" basis, in
connection with the offer and sale by the
Company of the Securities. As
compensation for services rendered, at the
time of purchase (as defined below),
the Company shall pay to the Agent by
Federal Funds wire transfer to an account
or accounts designated by the Agent, an
amount equal to 6.5% of the gross
proceeds received by the Company from the
sale of the Securities in the Offering
(but not including the exercise price of
any Warrants). In addition, at the time
of purchase (as defined below) the Company
will issue to the Agent a warrant
(the "Agent's Warrant"), in the form of
Exhibit A attached hereto, to purchase
up to the number of shares of Common Stock
(and associated Rights) equal to
three percent (3%) of the aggregate number
of Shares sold to Purchasers (as
defined below) in the Offering. The shares
of Common Stock (and associated
Rights) issuable to the Agent upon exercise
of the Agent's Warrant are referred
to herein as the "Warrant Stock." The
Securities are being offered and sold at a
price of $0.58 for two Shares and one
Warrant to purchase one share of Common
Stock.
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This
Agreement shall not give rise to any commitment by the Agent or
any
of its affiliates to underwrite or purchase
any of the Securities or otherwise
provide any financing. Subscription for
Securities shall be evidenced by, and
the sale of such Securities shall be made
pursuant to, purchase agreements in
substantially the form included as Exhibit
B hereto duly executed by each
purchaser of the Securities and the Company
(the "Purchase Agreements"). Persons
who agree to purchase Securities pursuant
to the Purchase Agreements that are
accepted by the Company are hereinafter
referred to as the "Purchasers."
2. Payment
and Delivery. Subject to the terms and conditions hereof and of
the Purchase Agreements, payment of the
purchase price for, and delivery of
certificates for, the Securities for which
the Company has received Purchase
Agreements acceptable to the Company shall
be made at the office of Ropes & Gray
LLP, One International Place, Boston,
Massachusetts (or at such other place as
shall be agreed upon by the Agent and the
Company), at 10:00 A.M., New York City
time, on or about December 14, 2004 (unless
another time shall be agreed to by
the Agent and the Company). Subject to the
terms and conditions hereof and of
the Purchase Agreements, payment of the
purchase price for the Securities
purchased by a Purchaser shall be made to
the Company at the time of purchase by
such Purchaser directly (or indirectly from
the escrow account maintained by the
Agent) by Federal Funds wire transfer of
same day funds, against delivery of
certificates for the Shares, through the
facilities of The Depository Trust
Company ("DTC") and delivery of the Warrant
Agreements (as defined below) to the
Agent for subsequent delivery to such
Purchaser, and such Securities shall be
registered in such name or names and shall
be in such denominations, as the
Purchaser thereof may request at least one
business day before the time of
purchase (as defined below). The Agent
agrees to hold the purchase price
delivered to it by persons who agree to
purchase Securities in escrow as
contemplated by the form of purchase
agreement included as Exhibit B hereto.
Subject to the terms and conditions hereof
and of the Purchase Agreements, at
the time of purchase the Agent shall
deliver to the Company by Federal Funds
wire transfer of same day funds the
purchase price for any such Securities
payable to the Company that has been
deposited in the escrow account by the
Purchasers, against delivery of such
Securities to the Purchasers. The time at
which such payment and delivery are made is
hereinafter sometimes called "the
time of purchase" and the date upon which
the time of purchase occurs is
hereinafter sometimes called the "Closing
Date." The Agent will, upon request of
the Company, confirm to the Company the
aggregate amount of funds delivered to
it in escrow by persons who have executed
and delivered a Purchase Agreement.
The Agent shall, promptly following the
time of purchase, deliver to the
Purchasers any Purchased Warrants received
by it from the Company in accordance
with the instructions set forth on the
signature page of the applicable Purchase
Agreement.
Deliveries
of the documents described in Section 5 hereof with respect to
the purchase of the Securities shall be
made at the offices of Ropes & Gray LLP,
One International Place, Boston,
Massachusetts at 10:00 A.M., New York City
time, on the date of the closing of the
purchase of the Securities.
3.
Representations and Warranties of the Company. The Company
represents,
warrants and covenants to and agrees with
the Agent that:
(a) the Registration Statement was declared effective under the
Act
on
November 18, 2004; no stop order of the Commission preventing
or
suspending
the use of the Basic Pro-
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spectus,
any Preliminary Prospectus Supplement, the Prospectus
Supplement
or the
Prospectus or the effectiveness of the Registration Statement
has
been
issued and no proceedings for such purpose have been instituted
or,
to the
Company's knowledge, are threatened by the Commission; the
Company
is
eligible to use Form S-3 for the Offering; such Registration
Statement
at the
date of this Agreement meets, and the Offering complies with,
the
requirements of Rule 415 under the Act. The Registration
Statement
complied
when it became effective, complies, and will comply at the time
of
purchase, and the Prospectus conformed as of its date, conforms,
and
will
conform at the time of purchase, in each case in all material
respects
with the requirements of the Act; any statutes, regulations,
contracts
or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits
to the
Registration Statement have been and will be so described or filed;
there
are no
documents required to be filed with the Commission in
connection
with the
transaction contemplated hereby that have not been filed as
required
pursuant to the Act or will not be filed within the requisite
time period; and
the Registration Statement did not at the time of
effectiveness, does not and will not at the time of purchase
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, and the Prospectus did not as of its date, does not
and
will not
at the time of purchase contain an untrue statement of a
material
fact or
omit to state a material fact required to be stated therein or
necessary
to make the statements therein, in light of the circumstances
under
which they were made, not misleading; provided, however, that
the
Company
makes no warranty or representation with respect to any
statement
contained
in -------- ------- the Registration Statement or the
Prospectus
in
reliance upon and in conformity with information concerning the
Agent
and
furnished in writing by or on behalf of the Agent to the
Company
expressly
for use in the Registration Statement or the Prospectus; the
Company
has not distributed and will not distribute any offering
material
in
connection with the offering or sale of the Securities other than
the
Registration Statement, the then most recent Preliminary
Prospectus
Supplement
or Prospectus Supplement, as applicable, the Basic Prospectus
and the
Prospectus; the Company has timely filed all reports required
of
it to be
filed pursuant to the Act and the Exchange Act and has filed
all
such
reports in the manner prescribed thereby; the Incorporated
Documents,
when they
were filed with the Commission, conformed in all material
respects
to the requirements of the Exchange Act and the applicable
rules
and
regulations of the Commission thereunder, and none of such
documents,
when they
were filed with the Commission, contained any untrue statement
of a
material fact or omitted to state a material fact necessary to
make
the
statements, in light of the circumstances under which they were
made,
therein
not misleading; and any further documents so filed and
incorporated by reference in the Basic Prospectus or Prospectus
Supplement, when such documents are filed with the Commission, will
comply
in all
material respects with the requirements of the Exchange Act and
the
applicable
rules and regulations of the Commission thereunder, as
applicable, and will not contain any untrue statement of a material
fact
or omit to
state a material fact necessary to make the statements therein,
in light
of the circumstances under which they were made, not
misleading.
(b) as of the date of the Prospectus Supplement the Company has,
and
as of the
time of purchase the Company shall have, an authorized
capitalization as set forth in the Prospectus under the caption
"Description of Capital Stock"; all of the issued and
outstanding
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shares of
capital stock, including the Common Stock, of the Company have
been duly
authorized and validly issued and are fully paid and
non-assessable, have been issued in compliance with all federal and
state
securities
laws and were not issued in violation of any preemptive right,
resale
right, right of first refusal or similar right;
(c) as of December 3, 2004 there were 70,151,982 shares of
Common
Stock
outstanding and the Company had reserved an aggregate of
22,748,540
shares of
Common Stock for issuance upon exercise of outstanding stock
options
and warrants and for conversion of the Company's outstanding
Class
B common
stock, in each case as described in the Prospectus; since
December
3, 2004, the Company has not issued any securities other than
Common
Stock of the Company pursuant to the exercise of previously
outstanding options in connection with the Company's employee
stock
purchase
and option plans (the "Plans"), options granted pursuant to the
Plans in
the ordinary course of business consistent with past practice
and
Common
Stock issued pursuant to the exercise of previously outstanding
warrants,
in each case as disclosed in the Prospectus; there are no
authorized
or outstanding options, warrants, preemptive rights, resale
rights,
rights of first refusal or other rights to purchase, or equity
or
debt
securities convertible into or exchangeable or exercisable for,
any
capital
stock or other securities of the Company other than pursuant to
the
Purchase Agreements and this Agreement and those described in
the
Prospectus; the description of the Company's stock option, stock
bonus and
other
stock plans or arrangements, and the options, warrants or other
rights
granted thereunder, set forth in the Registration Statement and
the
Prospectus
accurately and fairly presents the information required by the
Act to be
disclosed therein with respect to such plans, arrangements,
options
and rights; the Rights are not now and never have been
transferable separately from the shares of Common Stock or
exercisable; no
person,
including any of the Company's stockholders at the time of the
issuance
of the Rights, has to the knowledge of the Company at any time
been an
Acquiring Person and no Distribution Date or Shares Acquisition
Date has
occurred or been proposed; the execution of this Agreement and
the
Agent's Warrant and the completion of the transactions
contemplated
hereby and
thereby, including the acquisition of the Securities, the
Agent's
Warrant or the Warrant Stock will not cause: (i) to the
knowledge
of the
Company, assuming the accuracy of the representations and
warranties
of the Purchasers made in the Purchase Agreements, any
Purchaser
or the Agent to become an Acquiring Person, or (ii) a
Distribution Date or a Shares Acquisition Date to occur; the
Rights
Agreement
dated as of September 24, 1999 between the Company and American
Stock
Transfer & Trust Company, as rights agent, (the "Rights
Agreement")
was duly
authorized, executed and delivered by the Company effective as
of
September
24, 1999; there have been no amendments to the Rights
Agreement;
as used in
this section the following terms have the meanings given to
them in
the Rights Agreement: "Acquiring Person", "Distribution Date"
and
"Shares
Acquisition Date";
(d) the Company has been duly incorporated and is validly
existing
as a
corporation in good standing under the laws of the State of
Delaware,
with full
corporate power and authority to own, lease and operate its
properties
and conduct its business as described in the Registration
Statement
and the Prospectus, to execute and deliver this Agreement and
to
issue,
sell and deliver the Securities as contemplated herein; no
governmental proceeding has been
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instituted
in the State of Delaware revoking, limiting or curtailing, or
seeking to
revoke, limit or curtail, such power and authority.
(e) the Company is duly qualified to do business as a foreign
corporation and is in good
standing in each jurisdiction where the
ownership
or leasing of its properties or the conduct of its business
requires
such qualification, except where the failure to be so qualified
and in
good standing would not, individually or in the aggregate, have
a
material
adverse effect on the business, properties, management,
condition,
financial or otherwise, operations, prospects or results of
operation
of the Company and the Subsidiaries (as hereinafter defined)
taken as a
whole (a "Material Adverse Effect"); no governmental proceeding
has been
instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such
qualification,
except for
such proceedings as would not, individually or in the
aggregate,
have a Material Adverse Effect.
(f) The Company has no subsidiaries (as defined in the Act)
other
than
NeuroBlok, Inc. ("NeuroBlok"), DeNovo Technologies Corp.,
Biopure
Netherlands BV, Biopure South Africa, Ltd., Biopure Overseas
Holding
Company
and Reperfusion Systems, Inc. (collectively, the
"Subsidiaries"),
it being
acknowledged for the avoidance of doubt that Eleven Hurley
Street
Associates
is not such a subsidiary; except as disclosed in the
Registration Statement or the Prospectus, the Company owns all of
the
issued and
outstanding capital stock of each of the Subsidiaries other
than
NeuroBlok; none of the subsidiaries is a "significant
subsidiary"
within the
meaning of rule 1-02(w) of Regulation S-X or is otherwise
material
to the business or operations of the Company; the Company owns
shares of
NeuroBlok capital stock representing not less than 60% of
NeuroBlok's issued and outstanding shares of capital stock and not
less
than 60%
of the voting power of NeuroBlok's issued and outstanding
capital
stock;
other than the capital stock of the Subsidiaries and except as
disclosed
in the Registration Statement or the Prospectus, the Company
does not
own, directly or indirectly, any shares of stock or any other
equity or
long-term debt securities of any corporation or have any equity
interest
in any firm, partnership, joint venture, association or other
entity;
complete and correct copies of the certificate of incorporation
and the
bylaws of the Company and the Subsidiaries and all amendments
thereto
have been delivered to the Agent, and no changes therein will
be
made
subsequent to the date hereof and prior to the time of purchase;
each
Subsidiary
has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of
its
incorporation, with full corporate power and authority to own,
lease and
operate
its properties and to conduct its business as described in the
Registration Statement or the Prospectus; each Subsidiary is
duly
qualified
to do business as a foreign corporation and is in good standing
in each
jurisdiction where the ownership or leasing of its properties
or
the
conduct of its business requires such qualification, except where
the
failure to
be so qualified and in good standing would not, individually or
in the
aggregate, have a Material Adverse Effect; 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, except for any such proceedings as would not,
individually
or in the
aggregate, have a Material Adverse Effect; all of the
outstanding shares of capital stock of each of the Subsidiaries
held by
the
Company have been duly authorized and validly issued, are fully
paid
and
non-assessable and are owned by the Company subject to no
security
interest,
other encumbrance
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or adverse
claims except as disclosed in the Registration Statement or the
Prospectus, and no options, warrants or other rights to
purchase,
agreements
or other obligations to issue or other rights to convert any
obligation
into shares of capital stock or ownership interests in the
Subsidiaries are outstanding except as disclosed in the
Registration
Statement
or the Prospectus;
(g) [INTENTIONALLY OMITTED]
(h) the Shares and the Warrants have been duly and validly
authorized
by the Company and, when the Shares are issued and delivered
against
payment therefor as provided herein and when the shares of
Common
Stock
issuable upon exercise of the Warrants are issued in accordance
with
the terms
of the Warrants, the Shares and the shares of Common Stock
issuable
upon exercise of the Warrants, respectively, will be duly and
validly
issued, fully paid and non-assessable and will not be issued in
violation
of statutory and contractual preemptive rights, resale rights,
rights of
first refusal and similar rights; the Agent's Warrant has been
duly and
validly authorized by the Company and upon delivery to the
Agent
at the
time of purchase will be duly issued and will constitute a
legal,
valid and binding obligation of
the Company, enforceable against the
Company in
accordance with its terms. The Warrant Stock has been duly
authorized
and reserved for issuance upon the exercise of the Agent's
Warrant
and when issued upon payment of the exercise price therefor
will
be validly
issued, fully paid and nonassessable.
(i) the Common Stock (including the Shares) conforms in all
material
respects
to the description thereof contained in the Registration
Statement or the
Prospectus, the certificates for the Shares are in due
and proper
form and the holders of the Shares will not be subject to
personal
liability under Delaware corporate law by reason of being such
holders;
(j) this Agreement has
been duly authorized, executed and delivered
by the
Company;
(k) except as disclosed in the Registration Statement or the
Prospectus, neither the Company nor any of the Subsidiaries is in
breach
or
violation of or in default under (nor has any event occurred which
with
notice,
lapse of time or both would result in any breach or violation
of,
constitute
a default under or give the holder of any indebtedness (or a
person
acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a part of such
indebtedness
under) (i)
its respective certificate of incorporation or bylaws, (ii) any
law,
order, rule, regulation, writ, injunction, judgment or decree of
any
court,
government or governmental agency or body, domestic or foreign,
having
jurisdiction over the Company or any of its Subsidiaries or
over
their
respective properties, or (iii) any indenture, mortgage, deed
of
trust,
bank loan or credit agreement or other evidence of indebtedness,
or
any
license, lease, contract or other agreement or instrument to which
the
Company or
any of the Subsidiaries is a party or by which any of them or
any of
their properties is bound, except in the case of clause (ii)
and
(iii)
above where such breach, violation or default would not,
individually or in the aggregate, have a Material Adverse Effect
and in
the case
of clause (i) above for such breaches, violations or defaults
with
respect to the certificate of incorporation or by-
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laws of
Subsidiaries of the Company as would not, individually or in
the
aggregate,
have a Material Adverse Effect;
(l) the execution, delivery and performance of this Agreement
and
the
Agent's Warrant, and the consummation of the transactions
contemplated
hereby and
thereby, including the issuance and sale of the Securities, the
Agent's
Warrant and the Warrant Stock will not conflict with, result in
any breach
or violation of or constitute a default under (nor constitute
any event
which with notice, lapse of time or both would result in any
breach or
violation of or constitute a default under or give the holder
of
any
indebtedness (or a person acting on such holder's behalf) the right
to
require
the repurchase, redemption or repayment of all or a part of
such
indebtedness under) (i) the certificate of incorporation or bylaws
of the
Company or
any of the Subsidiaries, (ii) any indenture, mortgage, deed of
trust,
bank loan or credit agreement or other evidence of indebtedness,
or
any
license, lease, contract or other agreement or instrument to which
the
Company or
any of the Subsidiaries is a party or by which any of them or
any of
their respective properties is bound, or (iii) any federal,
state,
local or
foreign statute, law, regulation or rule or any decree,
judgment
or order
applicable to the Company or any of the Subsidiaries or any of
their
respect properties, except where such breach, violation or
default
would not,
individually or in the aggregate, have a Material Adverse
Effect;
(m) the Common Stock (including the Shares) is registered under
the
Exchange
Act and the outstanding shares of Common Stock of the Company
are
quoted on
The Nasdaq Stock Market ("Nasdaq") and the Company has taken no
action
designed to, or likely to have the effect of terminating the
registration of the Common Stock under the Exchange Act or
delisting or
suspending
from trading the Shares from Nasdaq, nor has the Company
received
any information suggesting that the Commission or (except as
disclosed
in the Prospectus) Nasdaq is contemplating terminating or
suspending
such registration or listing. All of the shares of Common Stock
included
in, or issuable upon exercise or conversion of, the Securities
and the
Agent's Warrant were described in a "Notification Form for
Listing
of
Additional Shares" filed with Nasdaq. The Company has complied with
the
requirements of Rule 4350(i)(2) of the Nasdaq Marketplace Rules
in
connection
with the Offering;
(n) no approval, authorization, consent or order of or filing
with
any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency or of or with Nasdaq,
or
approval of the
shareholders of the Company, is required in connection
with the
issuance and sale of the Securities or the consummation by the
Company of
the transactions contemplated hereby other than registration
under the
Act of the offer and sale of the Securities and filings with
Nasdaq,
each of which has been effected, and any necessary
qualification
under the
securities or blue sky laws of the various jurisdictions in
which
Securities are being offered or under the rules and regulations
of
the
National Association of Securities Dealers, Inc.;
(o) except as disclosed in the Registration Statement or the
Prospectus, (i) no person has the right, contractual or otherwise,
to
cause the
Company to issue or sell to it any shares of Common Stock or
shares of
any other capital stock or other equity interests of the
Company,
and (ii) except as provided herein or in the Engagement Letter,
no person
has the
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right to
act as an underwriter, placement agent or financial advisor to
the
Company in connection with the offer and sale of the Securities,
in
the case
of each of the foregoing clauses (i), (ii) and (iii), whether
as
a result
of the filing or effectiveness of the Registration Statement or
the sale
of the Securities as contemplated thereby or otherwise; except
as
disclosed
in the Registration Statement or the Prospectus, and except for
shares of Common Stock
underlying warrants previously issued to placement
agents and
entitling such placement agents to purchase an aggregate of
59,000
shares of Common Stock at exercise prices in excess of $3.00
per
share of
Common Stock, none of which warrants have been exercised as of
the date
hereof, no person has the right, contractual or otherwise, to
cause the
Company to register under the Act any shares of Common Stock or
shares of
any other capital stock or other securities of the Company, or
to include
any such shares or interests in the Registration Statement or
the
Offering, whether as a result of the filing or effectiveness of
the
Registration Statement or the sale of the Securities as
contemplated
thereby or
otherwise;
(p) each of the Company and the Subsidiaries has all necessary
licenses,
authorizations, consents and approvals and has made all
necessary
filings required under any federal, state, local or foreign
law,
regulation
or rule, in order to conduct its respective business as
currently
conducted and has conducted such business in accordance with
such laws,
regulations and rules, except where the failure to have such
licenses,
authorizations, consents and approvals or the failure to
conduct
business
in accordance with such laws, rules and regulations would not,
individually or in the aggregate, have a Material Adverse Effect;
neither
the
Company nor any of the Subsidiaries is in violation of, or in
default
under, or
has received notice of any proceedings relating to revocation
or
modification of, any such license, authorization, consent or
approval or
any
federal, state, local or foreign law, regulation or rule or any
decree,
order or judgment applicable to the Company or any of such
Subsidiaries, except where such violation, default, revocation
or
modification would not, individually or in the aggregate, have a
Material
Adverse
Effect;
(q) all legal or governmental proceedings, affiliate
transactions,
contracts,
licenses, agreements, leases or documents of a character
required
to be described in the Registration Statement or the Prospectus
or to be
filed as an exhibit to the Registration Statement have been so
described
or filed as required;
(r) except as disclosed in the Registration Statement or the
Prospectus, there are no actions, suits, claims, investigations
or
proceedings
pending or, to the Company's knowledge, threatened to which
the
Company or any of the Subsidiaries or any of their respective
directors
or officers is or would be a party or of which any of their
respective
properties is or would be subject at law or in equity, before
or by any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency, except any such
action,
suit,
claim, investigation or proceeding which would not result in a
judgment,
decree or order having, individually or in the aggregate, a
Material
Adverse Effect or prevent consummation of the transactions
contemplated hereby;
(s) Ernst & Young LLP, whose report on the consolidated
financial
statements
of the Company and the Subsidiaries is filed with the
Commission
as part of the Registration
9
<PAGE>
Statement
and the Prospectus, are independent public accountants as
required
by the Act and the Exchange Act;
(t) the consolidated financial statements included in the
Registration Statement or the Prospectus, together with the related
notes
and
schedules, present fairly in all material respects the
consolidated
financial
position of the Company and the consolidated Subsidiaries as of
the dates
indicated and the consolidated results of operations and cash
flows of
the Company and the consolidated Subsidiaries for the periods
specified
and comply in all material respects with the requirements of
the
Act and
have been prepared in conformity with generally accepted
accounting
principles applied on a consistent basis during the periods
involved
except as set forth in the notes thereto and subject, in the
case
of
unaudited financial statements, to normal year-end adjustments,
which
are not
expected to be material in amount; any pro forma financial
statements
or data included in the Registration Statement or the
Prospectus
comply with the requirements of Regulation S-X of the Act, the
assumptions used in the preparation of such pro forma financial
statements
and data
are reasonable, the pro forma adjustments used therein are
appropriate to give effect to the transactions or circumstances
described
therein
and the pro forma adjustments have been properly applied to the
historical
amounts in the compilation of those statements and data; the
supporting
exhibits and schedules in the Registration Statement, if any,
present
fairly in all material respects the information required to be
stated
therein; the other financial and statistical data set forth in
the
Registration Statement or the Prospectus are accurately presented
and
prepared
on a basis consistent with the financial statements and books
and
records of
the Company; there are no financial statements (historical or
pro forma)
or supporting schedules or exhibits that are required to be
included
in the Registration Statement or the Prospectus that are not
included
as required; and the Company and the consolidated Subsidiaries
do
not have
any material liabilities or obligations, direct or contingent
(including any
off-balance sheet obligations), not disclosed in the
Registration Statement or the Prospectus;
(u) except as set forth in the Registration Statement or the
Prospectus, subsequent to the respective dates as of which
information is
given in
the Registration Statement and the Prospectus, there has not
been
(i) any
material adverse change, or any development involving a
prospective material adverse change, in the business,
properties,
management, condition, financial or otherwise, operations,
prospects or
results of
operation of the Company and the Subsidiaries taken as a whole,
(ii) any
transaction which is material to the Company and the
Subsidiaries
taken as a
whole, (iii) any obligation, direct or contingent (including
any
off-balance sheet obligations), incurred by the Company or the
Subsidiaries, which is material to the Company and the Subsidiaries
taken
as a
whole, (iv) any change in the capital stock (other than pursuant
to
the
exercise or conversion of outstanding stock options or warrants
described
in the Prospectus) or any material change in the outstanding
indebtedness of the Company or the Subsidiaries or (v) any dividend
or
distribution of any kind declared,
paid or made on any class of capital
stock of
the Company;
(v) neither the Company nor any of the Subsidiaries is nor,
after
giving
effect to the Offering as described in the Prospectus, will any
of
them be an
"investment company" or
10
<PAGE>
an entity
"controlled" by an "investment company," as such terms are
defined in
the Investment Company Act of 1940, as amended (the "Investment
Company Act");
(w) the Company and any "employee benefit plan" (as defined
under
the
Employee Retirement Income Security Act of 1974, as amended, and
the
regulations and published interpretations thereunder
(collectively,
"ERISA"))
established or maintained by the Company or its "ERISA
Affiliates" (as defined below) are in compliance in all material
respects
with
ERISA; "ERISA Affiliate" means, with respect to the Company,
any
member of
any group of organizations described in Sections 414(b), (c),
(m) or (o)
of the Internal Revenue Code of 1986, as amended, and the
regulations and published interpretations thereunder (the "Code")
of which
the
Company is a member; no "reportable event" (as defined u
