Underwriting Agreement - Biopure Corp., J.P. Morgan Securities Inc., Salomon Smith Barney Inc. and Adams, Harkness & Hill Inc.
BIOPURE CORPORATION
2,500,000 Shares of Class A Common Stock
Underwriting Agreement
March 13, 2000
J.P. Morgan Securities Inc.
Salomon Smith Barney Inc.
Adams, Harkness & Hill, Inc.
Robert W. Baird & Co. Incorporated
As Representatives of the several Underwriters
listed in Schedule I hereto
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
Biopure Corporation, a Delaware corporation (the "COMPANY"), proposes
to issue and sell to the several Underwriters listed in Schedule I hereto (the
"UNDERWRITERS"), for whom you are acting as representatives (the
"REPRESENTATIVES"), an aggregate of 2,500,000 shares of Class A Common Stock,
par value $0.01 per share, of the Company (the "UNDERWRITTEN SHARES") and, for
the sole purpose of covering over-allotments in connection with the sale of the
Underwritten Shares, at the option of the Underwriters, up to an additional
375,000 shares of Class A Common Stock of the Company (the "OPTION SHARES"). The
Underwritten Shares and the Option Shares are herein referred to as the
"SHARES." The shares of Class A Common Stock of the Company to be outstanding
after giving effect to the sale of the Shares are herein referred to as the
"CLASS A COMMON STOCK."
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION"), in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "SECURITIES ACT"), a registration
statement, including a prospectus, relating to the Shares. The registration
statement as amended at the time when it became or shall become effective,
including information (if any) deemed to be part of the registration statement
at the time of effectiveness pursuant to Rule 430A under the Securities Act, is
referred to in this Agreement as the "REGISTRATION STATEMENT," and the
prospectus in the form first used to confirm sales of Shares is referred to in
this Agreement as the "PROSPECTUS." If the Company has filed an abbreviated
registration statement pursuant to Rule 462(b) under the Securities Act (the
"RULE
<PAGE> 2
-2-
462 REGISTRATION STATEMENT"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement.
The Company hereby agrees with the Underwriters as follows:
1. The Company agrees to issue and sell the Underwritten Shares to the
several Underwriters as hereinafter provided, and each Underwriter, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Company the respective number of Underwritten Shares set forth opposite
such Underwriter's name in Schedule I hereto at a purchase price per share (the
"PURCHASE PRICE") of $32.90.
In addition, the Company agrees to issue and sell the Option Shares to
the several Underwriters as hereinafter provided, and the Underwriters on the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, shall have the option to purchase, severally and
not jointly, from the Company up to an aggregate of 375,000 Option Shares at the
Purchase Price, for the sole purpose of covering over-allotments (if any) in the
sale of Underwritten Shares by the several Underwriters.
If any Option Shares are to be purchased, the number of Option Shares
to be purchased by each Underwriter shall be the number of Option Shares which
bears the same ratio to the aggregate number of Option Shares being purchased as
the number of Underwritten Shares set forth opposite the name of such
Underwriter in Schedule I hereto (or such number increased as set forth in
Section 9 hereof) bears to the aggregate number of Underwritten Shares being
purchased from the Company by the several Underwriters, subject, however, to
such adjustments to eliminate any fractional Shares as the Representatives in
their sole discretion shall make.
The Underwriters may exercise the option to purchase the Option Shares
at any time (but not more than once) on or before the thirtieth day following
the date of this Agreement, by written notice from the Representatives to the
Company. Such notice shall set forth the aggregate number of Option Shares as to
which the option is being exercised and the date and time when the Option Shares
are to be delivered and paid for, which may be the same date and time as the
Closing Date (as hereinafter defined) but shall not be earlier than the Closing
Date nor later than the tenth full Business Day (as hereinafter defined) after
the date of such notice (unless such time and date are postponed in accordance
with the provisions of Section 9 hereof). Any such notice shall be given at
least two Business Days prior to the date and time of delivery specified
therein.
2. The Company understands that the Underwriters intend (i) to make a
public offering of the Shares as soon after (A) the Registration Statement has
become effective (if it has not already become effective) and (B) the parties
hereto have executed and de-
<PAGE> 3
-3-
livered this Agreement as in the judgment of the Representatives is advisable
and (ii) initially to offer the Shares upon the terms set forth in the
Prospectus.
3. Payment for the Shares shall be made by wire transfer in immediately
available funds to the account specified by the Company to the Representatives,
in the case of the Underwritten Shares, on March 17, 2000, or at such other time
on the same or such other date, not later than the fifth Business Day
thereafter, as the Representatives and the Company may agree upon in writing or,
in the case of the Option Shares, on the date and time specified by the
Representatives in the written notice of the Underwriters' election to purchase
such Option Shares. The time and date of such payment for the Underwritten
Shares is referred to herein as the "CLOSING DATE" and the time and date for
such payment for the Option Shares, if other than the Closing Date, is herein
referred to as the "ADDITIONAL CLOSING DATE." As used herein, the term "BUSINESS
DAY" means any day other than a day on which banks are permitted or required to
be closed in New York City.
Payment for the Shares to be purchased on the Closing Date or the
Additional Closing Date, as the case may be, shall be made against delivery to
the Representatives for the respective accounts of the several Underwriters of
the Shares to be purchased on such date registered in such names and in such
denominations as the Representatives shall request in writing not later than two
full Business Days prior to the Closing Date or the Additional Closing Date, as
the case may be, with any transfer taxes payable in connection with the transfer
to the Underwriters of the Shares duly paid by the Company. The certificates for
the Shares will be made available for inspection and packaging by the
Representatives at the office of J.P. Morgan Securities Inc. set forth above not
later than 1:00 P.M., New York City time, on the Business Day prior to the
Closing Date or the Additional Closing Date, as the case may be.
4. The Company hereby represents and warrants to each of the several
Underwriters that:
(a) no order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission, and each preliminary
prospectus filed as part of the Registration Statement as originally filed
or as part of any amendment thereto, or filed pursuant to Rule 424 under
the Securities Act, complied when so filed in all material respects with
the Securities Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information relating to any
Underwriter furnished to the Company in writing by such Underwriter through
the Representatives expressly for use therein;
<PAGE> 4
-4-
(b) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been
instituted or, to the knowledge of the Company, threatened by the
Commission; and the Registration Statement and Prospectus (as amended or
supplemented if the Company shall have furnished any amendments or
supplements thereto) comply, or will comply, as the case may be, in all
material respects with the Securities Act and do not and will not, as of
the applicable effective date as to the Registration Statement and any
amendment thereto and as of the date of the Prospectus and any amendment or
supplement thereto, 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 not misleading, and the Prospectus, as amended
or supplemented, if applicable, at the Closing Date or Additional Closing
Date, as the case may be, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; except that the foregoing representations and
warranties shall not apply to statements or omissions in the Registration
Statement or the Prospectus made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through the Representatives expressly for use therein;
(c) the consolidated financial statements, and the related notes
thereto, included in the Registration Statement and the Prospectus present
fairly the consolidated financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of
their operations and changes in their consolidated cash flows for the
periods specified; said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis, and the supporting schedules, if any, included in the
Registration Statement present fairly the information required to be stated
therein;
(d) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any change in
the capital stock or long-term debt of the Company or any of its
subsidiaries, or any material adverse change, or any development that could
be reasonably expected to involve a prospective material adverse change, in
or affecting the business, prospects, management, financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole (a "MATERIAL ADVERSE Change"), other than as
set forth or contemplated in the Prospectus; and except as set forth or
contemplated in the Prospectus neither the Company nor any of its
subsidiaries has entered into any transaction or agreement (whether or not
in the ordinary course of business) material to the Company and its
subsidiaries taken as a whole;
(e) 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
power and
<PAGE> 5
-5-
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
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,
other than where the failure to be so qualified or in good standing would
not have a material adverse effect on the Company and its subsidiaries,
taken as a whole;
(f) each of the Company's U.S. subsidiaries has been duly incorporated
and is validly existing as a corporation under the laws of its jurisdiction
of incorporation, 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 as a foreign corporation for the transaction of
business and is in good standing under the laws of each jurisdiction in
which it owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so qualified
or in good standing would not have a material adverse effect on the
business, prospects, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries, taken as a
whole (a "MATERIAL ADVERSE EFFECT"); and all the outstanding shares of
capital stock of each subsidiary of the Company have been duly authorized
and validly issued, are fully paid and non-assessable, and all of the
outstanding shares of capital stock of each subsidiary of the Company owned
by the Company are owned, directly or indirectly, free and clear of all
liens, encumbrances, security interests and claims;
(g) this Agreement has been duly authorized, executed and delivered by
the Company;
(h) the Company has an authorized capitalization as set forth in the
Prospectus and such authorized capital stock conforms as to legal matters
to the description thereof set forth in the Prospectus, and all of the
outstanding shares of capital stock of the Company have been duly
authorized and validly issued, are fully paid and non-assessable and except
as described in the Prospectus are not subject to any pre-emptive rights;
and, except as described in or expressly contemplated by the Prospectus,
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 any of its subsidiaries, or any contract, commitment,
agreement, understanding or arrangement of any kind relating to the
issuance of any capital stock of the Company or any such subsidiary, any
such convertible or exchangeable securities or any such rights, warrants or
options;
<PAGE> 6
-6-
(i) the Shares to be issued and sold by the Company hereunder have been
duly authorized and, when issued and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will be duly
issued and will be fully paid and non-assessable and will conform to the
description thereof set forth in the Prospectus; and the issuance of the
Shares is not subject to any preemptive or similar rights;
(j) neither the Company nor any of its subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under its certificate of incorporation or by-laws or any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or
any of them or any of their respective properties is bound, except for
violations and defaults which would not, individually or in the aggregate,
have a Material Adverse Effect; the issue and sale of the Shares and the
performance by the Company of its obligations hereunder and the
consummation of the transactions contemplated herein will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will any such action
result in any violation of the provisions of the certificate of
incorporation or by-laws of the Company or any applicable law or statute or
any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company, its subsidiaries or any of their
respective properties; and no consent, approval, authorization, order,
license, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Shares or the consummation by the Company of the transactions contemplated
herein, except such consents, approvals, authorizations, orders, licenses,
registrations or qualifications as have been obtained or made under the
Securities Act and as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the
Underwriters;
(k) other than as set forth or contemplated in the Prospectus, there
are no legal or governmental investigations, actions, suits or proceedings
pending or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries or any of their respective
properties or to which the Company or any of its subsidiaries is or may be
a party or to which any property of the Company or any of its subsidiaries
is or may be subject which, if determined adversely to the Company or any
of its subsidiaries, could, individually or in the aggregate, reasonably be
expected to have, a Material Adverse Effect, and, to the knowledge of the
Company, no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
<PAGE> 7
-7-
(l) there are no statutes, regulations, contracts or other documents or
legal or governmental investigations, actions, suits or proceedings pending
or, to the knowledge of the Company, threatened that are required to be
described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement, as the case may be, that are not
described or filed as required;
(m) the Company and its subsidiaries have good and marketable title in
fee simple to all items of real property and good and marketable title to
all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described or referred to
in the Prospectus or such as do not materially affect the value of such
property and do not interfere with the use made or proposed to be made of
such property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its subsidiaries are held
by them under valid, existing and enforceable leases with such exceptions
as are not material and do not interfere with the use made or proposed to
be made of such property and buildings by the Company and its subsidiaries;
(n) no relationship, direct or indirect, exists between or among the
Company or any of its subsidiaries on the one hand, and the directors,
officers, stockholders, customers or suppliers of the Company or any of its
subsidiaries on the other hand, which is required by the Securities Act to
be described in the Registration Statement and the Prospectus which is not
so described;
(o)no person has the right to require the Company to register any
securities for offering and sale under the Securities Act by reason of the
filing of the Registration Statement with the Commission or the issue and
sale of the Shares, except for rights which have been waived or obviated by
decision of the Representatives;
(p) the Company is not and, after giving effect to the offering and
sale of the Shares, will not be an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(q) the Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida) relating to doing
business with the Government of Cuba or with any person or affiliate
located in Cuba;
(r) Ernst & Young LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent public accountants as
required by the Securities Act;
(s) the Company and its subsidiaries have filed all federal, state,
local and foreign tax returns which have been required to be filed and have
paid all taxes shown
<PAGE> 8
-8-
thereon and all assessments received by them or any of them to the extent
that such taxes have become due and are not being contested in good faith
except where the failure to file or pay would not, individually or in the
aggregate, have a Material Adverse Effect; and there is no tax deficiency
which has been or might reasonably be expected to be asserted or threatened
against the Company or any subsidiary except for such tax deficiencies as
would not, individually or in the aggregate, be expected to have a Material
Adverse Effect;
(t) the Company has not taken nor will it take, directly or indirectly,
any action designed to, or that might be reasonably expected to, cause or
result in stabilization or manipulation of the price of the Class A Common
Stock;
(u) each of the Company and its subsidiaries owns, possesses or has
obtained all licenses, permits, certificates, consents, orders, approvals
and other authorizations from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations
and all courts and other tribunals, domestic or foreign, necessary to own
or lease, as the case may be, and to operate its properties and to carry on
its business as conducted as of the date hereof, except where the failure
to own, possess, obtain or make would not, individually or in the
aggregate, have a Material Adverse Effect, and neither the Company nor any
such subsidiary has received any actual notice of any proceeding relating
to revocation or modification of any such license, permit, certificate,
consent, order, approval or other authorization, except as described in the
Registration Statement and the Prospectus; each of the Company and its
subsidiaries is in compliance with all laws and regulations relating to the
conduct of its business as conducted as of the date hereof; and all of the
descriptions in the Registration Statement and the Prospectus of the legal
and governmental proceedings and procedures by or before the United States
Food and Drug Administration (the "FDA") or any foreign, state or local
governmental body exercising comparable authority are true and complete in
all material respects;
(v) there are no existing or, to the knowledge of the Company,
threatened labor disputes with the employees of the Company or any of its
subsidiaries which could reasonably be expected to have a Material Adverse
Effect;
(w) the Company and its subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("ENVIRONMENTAL LAWS"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all terms and
conditions of any such permit, license or approval, except where such
noncompli-
<PAGE> 9
-9-
ance with Environmental Laws, failure to have received required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, individually
or in the aggregate, have a Material Adverse Effect;
(x) the Company has reasonably concluded that the costs and liabilities
associated with the effect of Environmental Laws on the business,
operations and properties of the Company and its subsidiaries (including,
without limitation, any capital or operating expenditures required for
clean-up, closure of properties or compliance with Environmental Laws or
any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) would not,
individually or in the aggregate, have a Material Adverse Effect;
(y) each employee benefit plan, within the meaning of Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
that is maintained, administered or contributed to by the Company or any of
its affiliates for employees or former employees of the Company and its
affiliates has been maintained in compliance with its terms and the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Internal Revenue Code of 1986,
as amended (the "CODE"), except to the extent that the failure to so comply
would not, individually or in the aggregate, have a Material Adverse
Effect; to the knowledge of the Company, no prohibited transaction, within
the meaning of Section 406 of ERISA or Section 4975 of the Code, has
occurred with respect to any such plan excluding transactions effected
pursuant to a statutory or administrative exemption; and for each such plan
which is subject to the funding rules of Section 412 of the Code or Section
302 of ERISA, no "accumulated funding deficiency" as defined in Section 412
of the Code has been incurred, whether or not waived, and the fair market
value of the assets of each such plan (excluding for these purposes accrued
but unpaid contributions) exceeded the present value of all benefits
accrued under such plan determined using reasonable actuarial assumptions;
(z) the statistical and market-related data included in the
Registration Statement and the Prospectus are based on or derived from
sources which are believed by the Company to be reliable;
(aa) to the knowledge of the Company, each of the Company and its
subsidiaries owns, is licensed to use or otherwise possesses adequate
rights to use the patents, patent rights, licenses, inventions, trademarks,
service marks, trade names, copyrights and know-how, including trade
secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems, processes or procedures (collectively,
the "INTELLECTUAL PROPERTY"), reasonably necessary to carry on the business
conducted by it, except to the extent that the failure to own, be licensed
to use or otherwise pos-
<PAGE> 10
-10-
sess adequate rights to use such Intellectual Property would not have a
Material Adverse Effect; the Company has not received any notice of
infringement of or conflict with, and the Company has no knowledge of any
infringement of or conflict with, asserted rights of others with respect to
its Intellectual Property which could reasonably be expected to result in a
Material Adverse Effect; the discoveries, inventions, products or processes
of the Company referred to in the Registration Statement and the Prospectus
do not, to the knowledge of the Company, infringe or conflict with any
right or patent of any third party, or any discovery, invention, product or
process which is the subject of a patent application filed by any third
party; except as described in the Prospectus, the Company is not obligated
to pay a royalty, grant a license or provide other consideration to any
third party in connection with its patents, patent rights, licenses,
inventions, trademarks, service marks, trade names, copyrights and
know-how; and no third party, including any academic or governmental
organization, possesses rights to the Intellectual Property which, if
exercised, could enable such third party to develop products competitive
with those of the Company or its subsidiaries or could reasonably be
expected to have a Material Adverse Effect;
(bb) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, the studies, tests and
preclinical and clinical trials conducted by or on behalf of the Company
that are described in the Registration Statement and the Prospectus were
and, if still pending, are being conducted in accordance with experimental
protocols, procedures and controls pursuant to, where applicable, accepted
professional scientific standards; the descriptions of the results of such
studies, tests and trials contained in the Registration Statement and the
Prospectus are accurate and complete in all material respects; and the
Company has not received any notices or correspondence from the FDA or any
foreign, state or local governmental body exercising comparable authority
requiring the termination, suspension or material modification of any
studies, tests or preclinical or clinical trials conducted by or on behalf
of the Company which termination, suspension or material modification could
reasonably be expected to have a Material Adverse Effect; and
(cc) The Year 2000 Problem has not had, and the Company has no reason
to believe, and does not believe, that the Year 2000 Problem will have, a
Material Adverse Effect or result in any material loss or interference with
the Company's business or operations. The "Year 2000 Problem" as used
herein means any significant risk that computer hardware or software used
in the receipt, transmission, processing, manipulation, storage, retrieval,
retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of dates
or time periods occurring after December 31, 1999, function at least as
effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
<PAGE> 11
-11-
5. The Company covenants and agrees with each of the several
Underwriters as follows:
(a) to use its best efforts to cause the Registration Statement to
become effective at the earliest possible time (if it has not already
become effective) and, if required, to file the final Prospectus with the
Commission within the time periods specified by Rule 424(b) and Rule 430A
under the Securities Act and to furnish copies of the Prospectus to the
Underwriters in New York City prior to 10:00 a.m., New York City time, on
the Business Day next succeeding the date of this Agreement in such
quantities as the Representatives may reasonably request;
(b) to deliver, at the expense of the Company, to the Representatives
four signed copies of the Registration Statement (as originally filed) and
each amendment thereto, in each case including exhibits, and to each other
Underwriter a conformed copy of the Registration Statement (as originally
filed) and each amendment thereto, in each case without exhibits, and,
during the period mentioned in paragraph (e) below, to each of the
Underwriters as many copies of the Prospectus (including all amendments and
supplements thereto) as the Representatives may reasonably request;
(c) before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the
Registration Statement becomes effective, to furnish to the Representatives
a copy of the proposed amendment or supplement for review and not to file
any such proposed amendment or supplement to which the Representatives
reasonably object;
(d) to advise the Representatives promptly, and to confirm such advice
in writing (i) when the Registration Statement has become effective, (ii)
when any amendment to the Registration Statement has been filed or becomes
effective, (iii) when any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof, (iv) of any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or
for any additional information, (v) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus or the Prospectus or the initiation or threatening of any
proceeding for that purpose, (vi) of the occurrence of any event, within
the period referenced in paragraph (e) below, 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
when the Prospectus is delivered to a purchaser, not misleading, and (vii)
of the receipt by the Company of any notification with respect to any
suspension of the qualification of the Shares for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for
<PAGE> 12
-12-
such purpose; and to use its best efforts to prevent the issuance of any
such stop order, or of any order preventing or suspending the use of any
preliminary prospectus or the Prospectus, or of any order suspending any
such qualification of the Shares, or notification of any such order thereof
and, if issued, to obtain as soon as possible the withdrawal thereof;
(e) if, during such period of time after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters a
prospectus relating to the Shares is required by law to be delivered in
connection with sales by the Underwriters or any dealer, any event shall
occur as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if it is necessary to amend or supplement the Prospectus to
comply with law, forthwith to prepare and furnish upon request, at the
expense of the Company, to the Underwriters and to the dealers (whose names
and addresses the Representatives will furnish to the Company) to which
Shares may have been sold by the Representatives on behalf of the
Underwriters and to any other dealers, such amendments or supplements to
the Prospectus as may be necessary so that the statements in the Prospectus
as so amended or supplemented will not, in the light of the circumstances
when the Prospectus is delivered to a purchaser, be misleading or so that
the Prospectus will comply with law;
(f) to endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives
shall reasonably request and to continue such qualification in effect so
long as reasonably required for distribution of the Shares; provided that
the Company shall not be required to file a general consent to service of
process in any such jurisdiction;
(g) to make generally available to its security holders and to the
Representatives as soon as practicable an earnings statement covering a
period of at least twelve months beginning with the first fiscal quarter of
the Company occurring after the effective date of the Registration
Statement, which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 of the Commission promulgated thereunder;
(h) for three years from the date of the Prospectus, to furnish to the
Representatives copies of all reports or other communications (financial or
other) furnished to holders of the Shares, and copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange;
(i) for a period of 90 days after the date of the Prospectus not to (i)
offer, pledge, announce the intention to sell, sell, contract to sell, sell
any option or contract
<PAGE> 13
-13-
to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly
or indirectly, any shares of Class A Common Stock or any securities of the
Company which are substantially similar to the Class A Common Stock or any
securities convertible into or exercisable or exchangeable for Class A
Common Stock or (ii) enter into any swap, option, future, forward or other
agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Class A Common Stock or any securities of
the Company which are substantially similar to the Class A Common Stock,
including, but not limited to, any security convertible into or exercisable
or exchangeable for Class A Common Stock, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Class
A Common Stock or such other securities, in cash or otherwise, without the
prior written consent of J.P. Morgan Securities Inc., other than, in the
case of either clause (i) or (ii), the Shares to be sold by the Company
hereunder or Class A Common Stock or any securities of the Company
substantially similar to the Class A Common Stock issued pursuant to (x)
employee stock option and restricted stock plans existing on the date of
the Prospectus, (y) an employment agreement with any person who is not
currently an employee of the Company provided that any such person delivers
to the Underwriters an executed lock-up agreement substantially in the form
of Exhibit A hereto or (z) warrants to purchase Class A Common Stock
existing on the date of the Prospectus);
(j) to use its best efforts to list, subject to notice of issuance, the
Shares on the Nasdaq National Market (the "NASDAQ NATIONAL MARKET");
(k) to file with the Commission such reports as may be required by Rule
463 under the Securities Act; and
(l) whether or not the transactions contemplated herein are consummated
or this Agreement is terminated, to pay or cause to be paid all costs and
expenses incident to the performance of its obligations hereunder,
including without limiting the generality of the foregoing, all costs and
expenses (i) incident to the preparation, issuance, execution and delivery
of the Shares, (ii) incident to the preparation, printing and filing under
the Securities Act of the Registration Statement, the Prospectus and any
preliminary prospectus (including in each case all exhibits, amendments and
supplements thereto), (iii) incurred in connection with the registration or
qualification of the Shares under the laws of such jurisdictions as the
Representatives may designate (including fees of counsel for the
Underwriters and its disbursements), (iv) in connection with the listing of
the Shares on the Nasdaq National Market, (v) related to the filing with,
and clearance of the offering by, the National Association of Securities
Dealers, Inc., (vi) in connection with the furnishing to the Underwriters
and dealers of copies of the Registration Statement and the Prospectus,
including mailing and shipping, as herein provided, (vii) any expenses
incurred by the Company in connection with a
<PAGE> 14
-14-
"road show" presentation to potential investors, (viii) the cost of
preparing stock certificates and (ix) the cost and charges of any transfer
agent and any registrar.
6. The several obligations of the Underwriters hereunder to purchase
the Shares on the Closing Date or the Additional Closing Date, as the case may
be, are subject to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) the Registration Statement shall have become effective (or if a
post-effective amendment is required to be filed under the Securities Act,
such post-effective amendment shall have become effective) not later than
5:00 P.M., New York City time, on the date hereof; and no stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment shall be in effect, and no proceedings for such
purpose shall be pending before or threatened by the Commission; the
Prospectus shall have been filed with the Commission pursuant to Rule
424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Securities Act and in accordance with
Section 5(a) hereof; and all requests for additional information shall have
been complied with to the satisfaction of the Representatives;
(b) the representations and warranties of the Company contained herein
are true and correct on and as of the Closing Date or the Additional
Closing Date, as the case may be, as if made on and as of the Closing Date
or the Additional Closing Date, as the case may be, and the Company shall
have complied with all agreements and all conditions on its part to be
performed or satisfied hereunder at or prior to the Closing Date or the
Additional Closing Date, as the case may be;
(c) subsequent to the execution and delivery of this Agreement and
prior to the Closing Date or the Additional Closing Date, as the case may
be, there shall not have occurred any downgrading, nor shall any notice
have been given of (i) any downgrading, (ii) any intended or potential
downgrading or (iii) any review or possible change that does not indicate
an improvement, in the rating accorded any securities of or guaranteed by
the Company by any "nationally recognized statistical rating organization,"
as such term is defined for purposes of Rule 436(g)(2) under the Securities
Act;
(d) since the respective dates as of which information is given in the
Prospectus there shall not have been any change in the capital stock or
long-term debt of the Company or any of its subsidiaries or any Material
Adverse Change otherwise than as set forth or contemplated in the
Prospectus, the effect of which in the judgment of the Representatives
makes it impracticable or inadvisable to proceed with the public offering
or the delivery of the Shares on the Closing Date or the Additional Closing
<PAGE> 15
-15-
Date, as the case may be, on the terms and in the manner contemplated in
the Prospectus; and neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus;
(e) the Representatives shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, a certificate of
an executive officer of the Company, with specific knowledge about the
Company's financial matters, reasonably satisfactory to the Representatives
to the effect set forth in subsections (a) through (d) (with respect to the
respective representations, warranties, agreements and conditions of the
Company) of this Section 6;
(f) LeBoeuf, Lamb, Greene & MacRae, L.L.P., counsel for the Company,
shall have furnished to the Representatives their written opinion, dated
the Closing Date or the Additional Closing Date, as the case may be, in
form and substance satisfactory to the Representatives, to the effect that:
(i) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with requisite corporate power to own its properties and
conduct its business as described in the Prospectus;
(ii) the Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws
of Massachusetts, New Hampshire and Pennsylvania;
(iii) this Agreement has been duly authorized, executed and
delivered by the Company;
(iv) the authorized capital stock of the Company conforms as to
legal matters to the description thereof contained in the Prospectus;
(v) the shares of capital stock of the Company outstanding prior
to the issuance of the Shares to be sold by the Company have been duly
authorized and are validly issued, fully paid and non-assessable;
(vi) the Shares to be issued and sold by the Company hereunder
have been duly authorized and, when delivered to and paid for the
Underwriters in accordance with the terms of this Agreement, will be
validly issued, fully paid
<PAGE> 16
-16-
and non-assessable and except as described in the Prospectus the
issuance of the Shares is not subject to any preemptive rights;
(vii) the statements in the Prospectus under "Management--The
1998 Stock Option Plan," "Management--1999 Omnibus Securities and
Incentive Plan" and "Description of Capital Stock," and in the
Registration Statement in Items 14 and 15, insofar as such statements
constitute a summary of the terms of the capital stock of the Company,
legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such terms, legal
matters, documents or proceedings;
(viii) such counsel is of the opinion that the Registration
Statement and the Prospectus and any amendments and supplements
thereto (other than the financial statements and related schedules and
financial, accounting and statistical data therein, as to which such
counsel need express no opinion) comply as to form in all material
respects with the requirements of the Securities Act and believes that
(other than the financial statements and related schedules and
financial, accounting and statistical data therein, as to which such
counsel need express no belief) the Registration Statement and the
Prospectus included therein at the time the Registration Statement
became effective did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and that the
Prospectus, as amended or supplemented, if applicable, does not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ix) the issue and sale of the Shares being delivered on the
Closing Date or the Additional Closing Date, as the case may be, and
the performance by the Company of its obligations hereunder and the
consummation of the transactions contemplated herein will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument
included as an exhibit to the Registration Statement to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries is bound or to which any of the property or
assets of the Company or any of its subsidiaries is subject, nor will
any such action result in any violation of the provisions of the
certificate of incorporation or by-laws of the Company or, assuming
compliance with state securities laws, any applicable law or statute
of the State of New York, any federal law of the United States or the
General Corporation Law of the State of Delaware or any order,
<PAGE> 17
-17-
rule or regulation of any federal or State of New York court or
governmental agency or body;
(x) no consent, approval, authorization, order, license,
registration or qualification of or with any court or governmental
agency or body is required for the issue and sale of the Shares in the
United States, except such consents, approvals, authorizations,
orders, licenses, registrations or qualifications as have been
obtained or made under the Securities Act and as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Shares by the Underwriters; and
(xi) the Company is not and, after giving effect to the offering
and sale of the Shares, will not be an "investment company" or entity
"controlled" by an "investment company," as such terms are defined in
the Investment Company Act.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and the States of New York and Delaware, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to the
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws and (B) as to
matters of fact, to the extent such counsel deems proper, on certificates
of responsible officers of the Company and certificates or other written
statements of officials of jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company. The
opinion of such counsel for the Company shall state that the opinion of any
such other counsel upon which they relied is in form satisfactory to such
counsel and, in such counsel's opinion, the Underwriters and they are
justified in relying thereon. With respect to the matters to be covered in
subparagraph (viii) above counsel may state their opinion and belief is
based upon their participation in the preparation of the Registration
Statement and the Prospectus and any amendment or supplement thereto and
review and discussion of the contents thereof but is without independent
check or verification except as specified.
The opinion of LeBoeuf, Lamb, Greene & MacRae, L.L.P., described above
shall be rendered to the Underwriters at the request of the Company and
shall so state therein;
(g) Jane Kober, Esq., general counsel for the Company, shall have
furnished to the Representatives her written opinion, dated the Closing
Date or the Additional Closing Date, as the case may be, in form and
substance satisfactory to the Representatives, to the effect that:
<PAGE> 18
-18-
(i) each of the Company's U.S. subsidiaries has been duly
incorporated and is validly existing as a corporation under the laws
of its jurisdiction of incorporation 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 as a
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, other than where the failure to be so qualified and in
good standing would not have a Material Adverse Effect; and all of the
outstanding shares of capital stock of each subsidiary have been duly
and validly authorized and issued, are fully paid and non-assessable,
and all of the outstanding shares of capital stock of each subsidiary
of the Company owned by the Company are owned, directly or indirectly,
free and clear of all liens, encumbrances, security interests and
claims;
(ii) other than as set forth or contemplated in the Prospectus,
there are no legal or governmental investigations, actions, suits or
proceedings pending or, to the knowledge of such counsel, threatened
against or affecting the Company or any of its subsidiaries or any of
their respective properties or to which the Company or any of its
subsidiaries is or may be a party or to which any property of the
Company or its subsidiaries is or may be the subject which, if
determined adversely to the Company or any of its subsidiaries, could,
individually or in the aggregate, reasonably be expected to have, a
Material Adverse Effect; to the knowledge of such counsel, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(iii) there are no statutes, regulations, contracts or other
documents or legal or governmental investigations, actions, suits or
proceedings pending or, to the knowledge of such counsel, threatened
that are required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement,
as the case may be, that are not described or filed as required;
(iv) such counsel believes that (other than the financial
statements and related schedules and financial, accounting and
statistical data therein, as to which such counsel need express no
belief) the Registration Statement and the Prospectus included therein
at the time the Registration Statement became effective did not
contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and that the Prospectus, as amended
or supplemented, if applicable, does not contain any untrue statement
of a material fact or omit to
<PAGE> 19
-19-
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;
(v) neither the Company nor any of its subsidiaries is, or with
the giving of notice or lapse of time or both would be, in violation
of or in default under its certificate of incorporation or by-laws or
any material indenture, mortgage, deed of trust, loan agreement or
other material agreement or instrument known to such counsel to which
the Company or any of its subsidiaries is a party or by which it or
any of them or any of their respective properties is bound, except for
violations and defaults which would not, individually or in the
aggregate, have a Material Adverse Effect;
(vi) each of the Company and its subsidiaries owns, possesses or
has obtained all licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all declarations
and filings with, all federal, state, local and other governmental
authorities (including foreign regulatory agencies), all
self-regulatory organizations and all courts and other tribunals,
domestic or foreign, necessary to own or lease, as the case may be,
and to operate its properties and to carry on its business as
conducted as of the date hereof except where the failure to own,
possess, obtain or make would not, individually or in the aggregate,
have a Material Adverse Effect, and neither the Company nor any such
subsidiary has received any actual notice of any proceeding relating
to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization, except
as described in the Registration Statement and the Prospectus; and
each of the Company and its subsidiaries is in compliance with all
laws and regulations relating to the conduct of its business as
conducted as of the date of the Prospectus;
(vii) to the knowledge of such counsel, each of the Company and
its subsidiaries owns, possesses or has the right to use the
Intellectual Property employed by it in connection with the business
conducted by it as of the date hereof;
(viii) to the knowledge of such counsel, each of the Company and
its subsidiaries is in compliance with all Environmental Laws, except,
in each case, where noncompliance would not, individually or in the
aggregate, have a Material Adverse Effect; there are no legal or
governmental proceedings pending or, to the knowledge of such counsel,
threatened against or affecting the Company or any of its subsidiaries
under any Environmental Law which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect; and
<PAGE> 20
-20-
(ix) to the knowledge of such counsel, the Company has not
received any notices or correspondence from the FDA or any foreign,
state or local governmental body exercising comparable authority
requiring the termination, suspension or material modification of any
studies, tests or preclinical or clinical trials conducted by or on
behalf of the Company which termination, suspension or material
modification could reasonably be expected to have a Material Adverse
Effect.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and the States of New York and Delaware, to the extent such counsel deems
proper and to the extent specified in such opinion, if at all, upon an
opinion or opinions (in form and substance reasonably satisfactory to the
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws and (B) as to
matters of fact, to the extent such counsel deems proper, on certificates
of responsible officers of the Company and certificates or other written
statements of officials of jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company. The
opinion of such general counsel for the Company shall state that the
opinion of any such other counsel upon which they relied is in form
satisfactory to such counsel and, in such counsel's opinion, the
Underwriters and they are justified in relying thereon. With respect to the
matters to be covered in subparagraph (iv) above counsel may state their
opinion and belief is based upon their participation in the preparation of
the Registration Statement and the Prospectus and any amendment or
supplement thereto and review and discussion of the contents thereof but is
without independent check or verification except as specified.
The opinion of Jane Kober, Esq., described above shall be rendered to
the Underwriters at the request of the Company and shall so state therein;
(h) Hamilton, Brook, Smith & Reynolds, P.C., patent counsel for the
Company, shall have furnished to the Representatives their written opinion,
dated the Closing Date or the Additional Closing Date, as the case may be,
in form and substance satisfactory to the Representatives, to the effect
that:
(i) such counsel is of the opinion that the statements in the
Registration Statement and the Prospectus included therein at the time
the Registration Statement became effective set forth under "Risk
Factors- If We Are Not Able to Protect Our Intellectual Property,
Competition Could Force Us to Lower Our Prices, Which Might Reduce
Profitability" and "Business--Intellectual Property," insofar as such
statements concern patents, patent applications and patent rights, did
not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and that the statements in the
captions set forth above
<PAGE> 21
-21-
in the Prospectus, as amended or supplemented, if applicable, did not
contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) to the knowledge of such counsel, each of the Company and
its subsidiaries owns, is licensed to use or otherwise possesses
adequate rights to use the patents and patent rights reasonably
necessary to carry on the business conducted by it, except to the
extent that the failure to own, be licensed to use or otherwise
possess adequate rights to use such Intellectual Property would not
have a Material Adverse Effect;
(iii) to the knowledge of such counsel, the Company has not
received any notice of infringement of or conflict with, and such
counsel has no knowledge of any infringement of or conflict with,
asserted rights of others with respect to its patents or patent rights
which could reasonably be expected to result in a Material Adverse
Effect;
(iv) the discoveries, inventions, products or processes of the
Company referred to in the Registration Statement and the Prospectus
do not, to the knowledge of such counsel, infringe or conflict with
any patents or patent rights of any third party, or any discovery,
invention, product or process which is the subject of a patent
application filed by any third party; and
(v) to the knowledge of such counsel, no third party, including
any academic or governmental organization, possesses rights to the
Company's patents, patent applications or patent rights which, if
exercised, could enable such third party to develop products
competitive with those of the Company or its subsidiaries or could
reasonably be expected to have a Material Adverse Effect.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States
and the State of Massachusetts, to the extent such counsel deems proper and
to the extent specified in such opinion, if at all, upon an opinion or
opinions (in form and substance reasonably satisfactory to the
Underwriters' counsel) of other counsel reasonably acceptable to the
Underwriters' counsel, familiar with the applicable laws and (B) as to
matters of fact, to the extent such counsel deems proper, on certificates
of responsible officers of the Company. The opinion of such patent counsel
for the Company shall state that the opinion of any such other counsel upon
which they relied is in form satisfactory to such counsel and, in such
counsel's opinion, the Underwriters and they are justified in relying
thereon.
<PAGE> 22
-22-
The opinion of Hamilton, Brook, Smith & Reynolds, P.C., described
above shall be rendered to the Underwriters at the request of the Company
and shall so state therein;
(i) Hogan & Hartson L.L.P., regulatory counsel for the Company, shall
have furnished to the Representatives their written opinion, dated the
Closing Date or the Additional Closing Date, as the case may be, in form
and substance satisfactory to the Representatives, to the effect that such
counsel is of the opinion that the statements in the Registration Statement
and the Prospectus included therein at the time the Registration Statement
became effective set forth under "Risk Factors-- If We Fail to Obtain FDA
Approval, We Cannot Market Hemopure in the United States," "-- We Cannot
Expand Indications for Our Products Unless We Receive FDA Approval for each
Proposed Indication," "-- Stringent, Ongoing Government Regulation and
Inspection of Our Products Could Lead to Delays in the Manufacture,
Marketing and Sale of Our Products," and "Business-- Government
Regulation," insofar as such statements summarize applicable provisions of
the Federal Food, Drug, and Cosmetic Act, as amended, Section 351 of the
Public Health Services Act, as amended, and the regulations promulgated
thereunder, are accurate summaries in all material respects of the
provisions purported to be summarized under such captions in the
Prospectus.
The opinion of Hogan & Hartson L.L.P. described above shall be
rendered to the Underwriters at the request of the Company and shall so
state therein;
(j) on the effective date of the Registration Statement and the
effective date of the most recently filed post-effective amendment to the
Registration Statement and also on the Closing Date or Additional Closing
Date, as the case may be, Ernst & Young LLP shall have furnished to you
letters, dated the respective dates of delivery thereof, in form and
substance satisfactory to you, containing statements and information of the
type customarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus;
(k) the Representatives shall have received on and as of the Closing
Date or Additional Closing Date, as the case may be, an opinion of Cahill
Gordon & Reindel, counsel to the Underwriters, with respect to the due
authorization and valid issuance of the Shares, the Registration Statement,
the Prospectus and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
<PAGE> 23
-23-
(l) the Shares to be delivered on the Closing Date or Additional
Closing Date, as the case may be, shall have been approved for listing on
the Nasdaq National Market, subject to official notice of issuance;
(m) on or prior to the Closing Date or Additional Closing Date, as the
case may be, the Company shall have furnished to the Representatives such
further certificates and documents as the Representatives shall reasonably
request; and
(n) the "lock-up" agreements, each substantially in the form of
Exhibit A hereto, between you and certain stockholders of the Company
previously specified by the Representatives relating to sales and certain
other dispositions of shares of Class A Common Stock or certain other
securities, delivered to you on or before the date hereof, shall be in full
force and effect on the Closing Date or Additional Closing Date, as the
case may be.
7. The Company agrees to indemnify and hold harmless each Underwriter,
each affiliate of any Underwriter which assists such Underwriter in the
distribution of the Shares and each person, if any, who controls any Underwriter
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT"), from and
against any and all losses, claims, damages and liabilities (including, without
limitation, reasonable legal fees and other expenses incurred in connection with
any suit, action or proceeding or any claim asserted) caused by any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information relating to any Underwriter furnished to the Company in writing by
such Underwriter through the Representatives expressly for use therein;
provided, however, that the foregoing indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting any such losses, claims, damages or liabilities purchased
Shares, or any person controlling such Underwriter, if a copy of the Prospectus
(as then amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) was not sent or given by or on behalf of such
Underwriter to such person, if required by laws to have been delivered, at or
prior to the written confirmation of the sale of the Shares to such person, and
if the Prospectus (as so amended or supplemented) would have cured the defect
giving rise to such losses, claims, damages or liabilities.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Company, its directors, its officers who sign the Registration
Statement and each
<PAGE> 24
-24-
person who controls the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to each Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through the Representatives expressly for use in
the Registration Statement, the Prospectus, any amendment or supplement thereto,
or any preliminary prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "INDEMNIFIED PERSON") shall promptly
notify the person against whom such indemnity may be sought (the "INDEMNIFYING
PERSON") in writing, and the Indemnifying Person, upon request of the
Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to one local
counsel in any single jurisdiction) for all Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Underwriters, each affiliate of any Underwriter which
assists such Underwriter in the distribution of the Shares and such control
persons of Underwriters shall be designated in writing by J.P. Morgan Securities
Inc. and any such separate firm for the Company, its directors, its officers who
sign the Registration Statement and such control persons of the Company shall be
designated in writing by the Company. The Indemnifying Person shall not be
liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the Indemnifying Person agrees to indemnify any Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Person shall have requested an Indemnifying Person to reimburse the Indemnified
Person for reasonable fees and expenses of counsel as contemplated by the second
and third sentences of this paragraph, the Indemnifying Person agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such Indemnifying Person of the aforesaid request and (ii) such
Indemnifying Person shall not have reimbursed the Indemnified Person in
<PAGE> 25
-25-
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first or second paragraph of
this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and the
Underwriters on the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the Underwriters on the other hand shall be deemed
to be in the same respective proportions as the net proceeds from the offering
(before deducting expenses) received by the Company and the total underwriting
discounts and the commissions received by the Underwriters, in each case as set
forth in the table on the cover of the Prospectus, bear to the aggregate public
offering price of the Shares. The relative fault of the Company on the one hand
and the Underwriters on the other hand shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purposes) or by any other method of allocation that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any reasonable legal or other expenses incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Shares underwritten by it and distributed to
the public were offered
<PAGE> 26
-26-
to the public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 7 are several in proportion to the respective number of
Shares set forth opposite their names in Schedule I hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and shall
not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Company set forth in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on behalf
of the Company, its officers or directors or any other person controlling the
Company and (iii) acceptance of and payment for any of the Shares.
8. Notwithstanding anything herein contained, this Agreement (or the
obligations of the several Underwriters with respect to the Option Shares) may
be terminated in the absolute discretion of the Representatives, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Closing Date (or, in the case of the Option Shares, prior to the
Additional Closing Date) (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange or the American Stock Exchange or the National Association of
Securities Dealers, Inc., (ii) trading of any securities of or guaranteed by the
Company shall have been suspended on any exchange or in any over-the-counter
market, (iii) a general moratorium on commercial banking activities in New York
shall have been declared by either Federal or New York State authorities or (iv)
there shall have occurred any outbreak or escalation of hostilities or any
change in financial markets or any calamity or crisis that, in the judgment of
the Representatives, is material and adverse and which, in the judgment of the
Representatives, makes it impracticable to market the Shares being delivered at
the Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated in the Prospectus.
9. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement by the
Commission.
If on the Closing Date or the Additional Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
which it or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such
<PAGE> 27
-27-
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate number of Shares to be purchased on
such date, the other Underwriters shall be obligated severally, in the
proportions that the number of Shares set forth opposite their respective names
in Schedule I bears to the aggregate number of Underwritten Shares set forth
opposite the names of all such non-defaulting Underwriters, or in such other
proportions as the Representatives may specify, to purchase the Shares which
such defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Shares that
any Underwriter has agreed to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such number of
Shares without the written consent of such Underwriter. If on the Closing Date
or the Additional Closing Date, as the case may be, any Underwriter or
Underwriters shall fail or refuse to purchase Shares which it or they have
agreed to purchase hereunder on such date, and the aggregate number of Shares
with respect to which such default occurs is more than one-tenth of the
aggregate number of Shares to be purchased on such date, and arrangements
satisfactory to the Representatives and the Company for the purchase of such
Shares are not made within 36 hours after such default, this Agreement (or the
obligations of the several Underwriters to purchase the Option Shares, as the
case may be) shall terminate without liability on the part of any non-defaulting
Underwriter or the Company. In the case of either the first sentence or the
second sentence of this paragraph, either you or the Company shall have the
right to postpone the Closing Date (or, in the case of the Option Shares, the
Additional Closing Date), but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Company agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the reasonable fees and expenses of its
counsel) reasonably incurred by the Underwriter in connection with this
Agreement or the offering contemplated herein.
11. This Agreement shall inure to the benefit of and be binding upon
the Company, the Underwriters, each affiliate of any Underwriter which assists
such Underwriter in the distribution of the Shares, any controlling persons
referred to herein and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. No pur-
<PAGE> 28
-28-
chaser of Shares from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by J.P.
Morgan Securities Inc. alone on behalf of the Underwriters, and any such action
taken by J.P. Morgan Securities Inc. alone shall be binding upon the
Underwriters. All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given if mailed or transmitted by any
standard form of telecommunication. Notices to the Underwriters shall be given
to the Representatives, c/o J.P. Morgan Securities Inc., 60 Wall Street, New
York, New York 10260 (telefax: 212-648-5705), Attention: Syndicate Department,
with a copy to Cahill Gordon & Reindel, 80 Pine Street, New York, New York 10005
(telefax: 212-269-5420), Attention: Gerald S. Tanenbaum, Esq. Notices to the
Company shall be given to it at its offices at 11 Hurley Street, Cambridge,
Massachusetts 02141 (telefax: 617-234-6507), Attention: Jane Kober, Esq., with a
copy to LeBoeuf, Lamb, Greene & MacRae, L.L.P., 125 West 55th Street, New York,
New York 10019 (telefax: 212-424-8500), Attention: Lars Bang-Jensen, Esq.
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
14. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS
OF LAWS PROVISIONS THEREOF.
<PAGE> 29
-29-
If the foregoing is in accordance with your understanding, please sign
and return four counterparts hereof.
Very truly yours,
BIOPURE CORPORATION
By:
------------------------------------
Name: Jane Kober
Title: Senior Vice President, General
Counsel and Secretary
<PAGE> 30
-30-
Accepted: March 13, 2000
J.P. MORGAN SECURITIES INC.
SALOMON SMITH BARNEY INC.
ADAMS, HARKNESS & HILL, INC.
ROBERT W. BAIRD & CO. INCORPORATED
Acting severally on behalf
of themselves and the
several Underwriters listed
in Schedule I hereto.
By: J.P. MORGAN SECURITIES INC.
Acting on behalf of itself and the
several Underwriters listed in
Schedule I hereto.
By:
---------------------------
Name: Michael J. Tiedemann
Title: Vice President
<PAGE> 31
SCHEDULE I
NUMBER OF SHARES TO
UNDERWRITER BE PURCHASED
J.P. Morgan Securities Inc.............................. 900,000
Salomon Smith Barney Inc. 900,000
Adams, Harkness & Hill, Inc............................. 216,000
Robert W. Baird & Co. Incorporated...................... 384,000
KBC Securities NV....................................... 50,000
Dain Rauscher Wessels................................... 25,000
Jackson Securities Incorporated......................... 25,000
---------
Total................................. 2,500,000
=========