<PAGE>
As filed with the Securities and Exchange Commission on April 7, 1995
REGISTRATION NO. 33-58093
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
----------------------
ALLIANCE PHARMACEUTICAL CORP.
(Exact name of registrant as specified in its charter)
NEW YORK 14-1644018
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
3040 SCIENCE PARK ROAD
SAN DIEGO, CALIFORNIA 92121
(619) 558-4300
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
----------------------
DUANE J. ROTH
PRESIDENT
3040 SCIENCE PARK ROAD
SAN DIEGO, CALIFORNIA 92121
(619) 558-4300
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------
Copies to:
MELVIN EPSTEIN, ESQ. STEPHANIE W. ABRAMSON, ESQ.
STROOCK & STROOCK & LAVAN MORGAN, LEWIS & BOCKIUS
7 HANOVER SQUARE 101 PARK AVENUE
NEW YORK, NEW YORK 10004 NEW YORK, NEW YORK 10178
(212) 806-5400 (212) 309-6000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As
soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this form are being
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE(3)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------
Common Stock, par value $0.01 per share 2,500,000 $5.875 $14,687,500 $5,065
=========================================================================================================
</TABLE>
(1) All of these shares are to be offered both in the United States and in
certain countries outside the United States. Those shares offered outside
the United States may be resold from time to time in the United States in
transactions requiring registration under the Securities Act of 1933, as
amended.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c), based upon the last sale price of the registrant's
Common Stock as reported on the Nasdaq National Market on March 13, 1995.
(3) Previously paid on March 6, 1995 and March 14, 1995.
----------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATES AS
MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A
FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the offering, all of which
will be borne by the Registrant, are as follows:
<TABLE>
<CAPTION>
<S> <C>
SEC Registration Fee................................ $ 5,065
N.A.S.D. Filing Fee................................. 1,969
Printing Costs...................................... 35,000
Legal Fees and Expenses............................. 50,000
Placement Agents Expense Reimbursement.............. 150,000
Escrow Agent Fees................................... 15,000
Accounting Fees and Expenses........................ 25,000
Miscellaneous....................................... 17,966
--------
Total............................................... $300,000
</TABLE>
=============
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Reference is made to Article VI of the By-Laws of the Registrant and
to Sections 721-727 of the New York Business Corporation Law, which, among
other things and subject to certain conditions, authorize the Company to
indemnify each of its officers and directors against certain liabilities
and expenses incurred by such persons in connection with claims made by
reason of their being such officers or directors.
II-1
<PAGE>
ITEM 16. EXHIBITS
1.1 Form of U.S. Placement Agency Agreement
1.2 Form of U.S. Escrow Agreement
3. Restated Certificate of Incorporation of the Company, as amended,
dated December 1, 1994*
5. Opinion of Stroock & Stroock & Lavan*
10. Material Contracts
23.1 Consent of Ernst & Young LLP, Independent Auditors*
23.2 Consent of Deloitte & Touche LLP, Independent Auditors*
23.3 Consent of Stroock & Stroock & Lavan (included in Exhibit 5)*
23.4 Consent of Knobbe, Martens, Olson & Bear*
24. Powers of Attorney*
-------------
* Previously filed.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraph (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as
part of this registration statement in
II-2
<PAGE>
reliance upon Rule 430A and contained in a form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities
Act shall be deemed to be part of this registration statement as of the
time it was declared effective.
(2) For purposes of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered herein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Amendment No. 1 to registration statement
to be signed on its behalf by the undersigned, duly authorized in the City
of San Diego, State of California, on April 7, 1995.
ALLIANCE PHARMACEUTICAL CORP.
By:\s\Duane J. Roth
President
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to registration statement has been signed below by the
following persons on behalf of the registrant and in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- -------------------------------- ---------------------------- --------------
<S> <C> <C>
\s\ Duane J. Roth President, Chief Executive April 7, 1995
- --------------------------------
Duane J. Roth Officer and Director
\s\ Theodore D. Roth Executive Vice President April 7, 1995
- --------------------------------
Theodore D. Roth and Chief Financial Officer
\s\ Tim T. Hart Controller, Chief Accounting April 7, 1995
- --------------------------------
Tim T. Hart Officer
\s\ Carroll O. Johnson* Director April 7, 1995
- --------------------------------
Carroll O. Johnson
\s\ Stephen M. McGrath* Director April 7, 1995
- --------------------------------
Stephen M. McGrath
\s\ Helen M. Ranney, M.D.* Director April 7, 1995
- --------------------------------
Helen M. Ranney, M.D.
\s\ Donald E. O'Neill* Director April 7, 1995
- --------------------------------
Donald E. O'Neill
\s\ Jean Riess, Ph.D.* Director April 7, 1995
- --------------------------------
Jean Riess, Ph.D.
\s\ Thomas F. Zuck, M.D.* Director April 7, 1995
- --------------------------------
Thomas F. Zuck, M.D.
</TABLE>
*By: /s/ Theodore D. Roth
----------------------------
Theodore D. Roth
Attorney-in-Fact
II-5
<PAGE>
EXHIBIT INDEX
-------------
Page Number
-----------
1.1 Placement Agency Agreement*
1.2 Escrow Agreement*
3. Restated Certificate of Incorporation of the Company, as
amended, dated December 1, 1994***
5. Opinion of Stroock & Stroock & Lavan***
10. Material Contracts**
23.1 Consent of Ernst & Young LLP, Independent Auditors***
23.2 Consent of Deloitte & Touche LLP, Independent Auditors***
23.3 Consent of Stroock & Stroock & Lavan***
23.4 Consent of Knobbe, Martens, Olson & Bear***
24. Power of Attorney***
___________________
* Filed herewith.
** Included in Exhibit 1.1
*** Previously filed.
<PAGE>
EXHIBIT 1.1
Draft as of April 6, 1995
ALLIANCE PHARMACEUTICAL CORP.
AGREEMENT AMONG PLACEMENT AGENTS
--------------------------------
This Agreement, by and among Oppenheimer & Co., Inc. ("Oppenheimer"),
Cowen & Company ("Cowen") and ABB Aros Fondkommission AB ("ABB"; together with
Oppenheimer and Cowen, the "Placement Agents"), is made as of this ____ day of
April, 1995. Terms not expressly defined herein shall have the meanings
ascribed to them in the U.S. Placement Agency Agreement and the International
Placement Agency Agreement, as defined below.
WHEREAS, pursuant to a placement agency agreement (the "U.S. Placement
Agency Agreement") between the U.S. Placement Agents and the Company, the U.S.
Placement Agents have agreed on a best efforts, all or none, basis to arrange
for the sale of the Shares offered by the Company in the U.S. Offering
principally to the U.S. Investors; and
WHEREAS, pursuant to a placement agency agreement (the "International
Placement Agency Agreement") between the International Placement Agents and the
Company, the International Placement Agents have agreed on a best efforts, all
or none, basis to arrange for the sale of the Shares offered by the Company
outside the United States pursuant to Regulation S under the Securities Act in
the International Offering principally to the Non-U.S. Investors; and
WHEREAS, the closing of each of the U.S. Offering and the International
Offering is conditioned upon the sale of all of the Shares; and
WHEREAS, in connection with the foregoing, the Placement Agents deem it
necessary and advisable that a representative be appointed to act on their
collective behalf and that certain of the activities of the Placement Agents be
coordinated pursuant to this Agreement.
NOW, THEREFORE, the Placement Agents hereby agree as follows:
Section 1. General. The Placement Agents will consult with each other as
-------
to the availability of Shares for sale to Investors pursuant to the Placement
Agreements from time to time, until the termination of this Agreement. The
Placement Agents agree that their activities will be coordinated and conducted
in compliance with all applicable laws and regulations.
Section 2. Appointment of the Representative. Each of the Placement
---------------------------------
Agents appoints Oppenheimer as its representative in connection with the
Placement Agreements and the Escrow
<PAGE>
Agreements and authorizes Oppenheimer, acting as its representative, to (i)
determine the initial offering price of the Shares; (ii) allocate Shares among
Investors; (iii) exercise all the authority and discretion vested in the
Placement Agents by the provisions of the Placement Agreements and to take all
such action as Oppenheimer believes desirable to carry out the provisions
thereof and hereof; (iv) perform the functions required of it and exercise the
authority vested in it under the Escrow Agreements; and (v) take such action as
in Oppenheimer's discretion may be necessary or desirable to effect the sale of
the Shares, including the right to determine the terms of the proposed Offerings
and the right to make any judgment relating to the satisfaction of the
conditions of the obligations of the Placement Agents under the Placement
Agreements, the waiver of any such conditions or the termination of the
Placement Agreements.
Section 3. Agreements of the International Placement Agents. (a) Each of
------------------------------------------------
the International Placement Agents agrees that, in its capacity as such, is not
arranging, nor will it arrange, for the sale of any Shares to any U.S. Person
nor deliver or distribute any offering materials relating to the International
Offering to any U.S. Person.
(b) Each International Placement Agent represents and agrees, in its
capacity as such, that (i) in each jurisdiction in which it participates in the
offering of the Shares, it will conduct such offering in a manner which complies
with applicable law and (ii) it will arrange for the sale of the Shares to
Investors only by means of the International Offering Memorandum.
Section 4. Fees and Expenses. The fee to be received by the Placement
-----------------
Agents from the Company pursuant to the Placement Agreements shall be divided
among them equally, regardless of the number of Shares placed by any of them and
each of them shall present to Oppenheimer for reimbursement by the Company
invoices for all of the expenses incurred by them in connection with the
Offerings. In the event such expenses exceed the amount the Company is required
to reimburse the Placement Agents, Oppenheimer shall use its best efforts to
allocate the amount available for reimbursement in a reasonable manner.
Section 5. Indemnification and Contribution.
--------------------------------
(a) Each of the Placement Agents agrees to indemnify and hold harmless each
other, the officers, directors, partners, employees, agents and counsel of each
other, and each person, if any, who controls them within the meaning of Section
15 of the Securities Act or Section 20(a) of the Exchange Act, and to reimburse
each other's expenses, to the extent and upon the terms that each has agreed to
indemnify and hold harmless the Company
2
<PAGE>
and to reimburse the Company's expenses as set forth in each of the Placement
Agreements to which it is a party.
(b) Each of the Placement Agents will pay its proportionate share of any
losses, damages, liabilities or expenses, joint or several, paid or incurred by
any Placement Agent to any person other than a Placement Agent, arising out of
or based upon (i) the breach of any representation or agreement contained herein
or in the Placement Agreement to which it is a party, (ii) any untrue statement
or alleged untrue statement of any material fact contained, as to Cowen and
Oppenheimer, in the Registration Statement, the Prospectus or in any other
selling or advertising materials used by either of them in connection with the
U.S. Offering, or the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading and (iii) any untrue statement or alleged untrue statement of a
material fact contained, as to Oppenheimer, Cowen and ABB, in the International
Offering Memorandum or in any other selling or advertising materials used by any
of them in connection with the International Offering, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and such
proportionate share of any legal or other expenses reasonably incurred by any of
them in connection with investigating or defending any claim or action in
respect of such loss, damage, liability or expense. In determining the amount
of any Placement Agent's obligation under this Section 5, appropriate adjustment
may be made by Oppenheimer to reflect any amounts received from the Company by
any Placement Agent in respect of such claim pursuant to the Placement
Agreements to which it is a party or otherwise. If any such claim is asserted,
Oppenheimer may take such action in connection therewith as it deems necessary
or desirable, including retention of counsel for the Placement Agents and, in
Oppenheimer's discretion, separate counsel for any particular Placement Agent.
In any determination of amounts payable hereunder, any loss, damage, liability
or expense incurred by any person controlling any Placement Agent within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act
which has been incurred by reason of such control relationship shall be deemed
to have been incurred by such Placement Agent. Any Placement Agent may elect to
retain its own counsel at its own expense. Oppenheimer may settle or consent to
the settlement of any such claim with the approval of one other Placement Agent
on the advice of counsel retained by Oppenheimer. Whenever Oppenheimer receives
notice of the assertion of any claim to which the provisions of this Section 5
would be applicable, it shall give prompt notice thereof to Cowen and ABB. It
shall also furnish Cowen and ABB with periodic reports at such times as it deems
appropriate as to the status of such claim and the action taken by Oppenheimer
in connection therewith. If any Placement Agent defaults in its obligation to
3
<PAGE>
make any payments under this Section 5, each non-defaulting Placement Agent
shall be obligated to pay its proportionate share of all defaulted payments.
Nothing herein shall relieve a defaulting Placement Agent from liability for its
default.
(c) The provisions of this Section 5 shall survive the termination of this
Agreement and shall remain in full force and effect regardless of any
investigation made by or on behalf of any Placement Agent or controlling person
within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act.
Section 6. Certain Agreements.
------------------
(a) the Closing Date of each of the Offerings will be five business days
after the date of the Prospectus or such earlier or later date (not later than
10 business days after the date of the Prospectus) determined by Oppenheimer and
the Company;
(b) the Placement Agents will not arrange for the sale of Shares at a price
other than the price set forth on the cover pages of the Prospectus;
(c) advertising with respect to the Offerings shall be as determined by
Oppenheimer, after consultation with Cowen and ABB.
Section 7. Amendments. This Agreement may be amended prior to the Closing
----------
Date by written consent of the Placement Agents.
Section 8. Counterparts. This Agreement may be signed in various
------------
counterparts which together shall constitute one and the same document.
Section 9. Governing Law. This Agreement shall be governed by and
-------------
construed in accordance with the laws of the State of New York without giving
effect to the choice of law or conflicts of law principles thereof, and the
parties hereto submit to the non-exclusive jurisdiction of the courts of the
State of New York and the United States District Court of the Southern District
of New York.
4
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed on the date first
above written.
OPPENHEIMER & CO., INC.
By: _______________________
Peter J. Crowley
Managing Director
COWEN & COMPANY
By: ________________________
Nancy M. Crowell
Managing Director
ABB AROS FONDKOMMISSION AB
By: _____________________
Name:
Title:
5
<PAGE>
Draft as of April 6, 1995
2,500,000 Shares
ALLIANCE PHARMACEUTICAL CORP.
Common Stock
INTERNATIONAL PLACEMENT AGENCY AGREEMENT
----------------------------------------
________, 1995
Oppenheimer & Co., Inc.
Cowen & Company
ABB Aros Fondkommission AB
c/o Oppenheimer & Co., Inc.
Oppenheimer Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Alliance Pharmaceutical Corp., a New York corporation (the "Company"),
proposes to issue and sell an aggregate of up to 2,500,000 shares (the "Shares")
of common stock, par value $.01 per share (the "Common Stock") principally to
selected institutional investors (collectively, "Investors") both within the
United States (the "U.S. Offering") and outside the United States (the
"International Offering;" together with the U.S. Offering, the "Offerings").
(For purposes of this Agreement, the term "United States" means the United
States of America, its territories and its possessions, any State of the United
States and the District of Columbia). The Company desires to engage you as its
exclusive placement agents (the "International Placement Agents") to arrange for
the sale of up to all of the Shares in connection with the International
Offering on a best efforts, all or none basis. Concurrently herewith, the
Company has engaged Oppenheimer & Co., Inc. and Cowen & Company (the "U.S.
Placement Agents;" together with the International Placement Agents, the
"Placement Agents") as its exclusive placement agents to arrange for the sale of
up to all of the Shares in connection with the U.S. Offering on a best efforts,
all or none basis, pursuant to a separate placement agency agreement (the "U.S.
Placement Agency Agreement"). The International Offering shall be conducted
outside the United States in accordance with the exemption from registration
provided by Regulation S ("Regulation S") promulgated under the Securities Act.
The closing of the Offerings shall be conditioned upon the sale of all of the
2,500,000 Shares. Terms not defined expressly herein shall have the meanings
ascribed to them in the U.S. Placement Agency Agreement.
<PAGE>
The Company hereby confirms its agreements with the International Placement
Agents as follows:
1. Agreement to Act as International Placement Agents. On the basis of
--------------------------------------------------
the representations, warranties and agreements of the Company herein contained
and subject to all the terms and conditions of this Agreement, each of the
International Placement Agents agrees to act as the Company's placement agent,
on a best efforts basis, in connection with the International Offering. Each
International Placement Agent understands, covenants and agrees that it shall
not make any offer to a person in the United States or engage in any "directed
selling efforts" (as defined in Regulation S) in connection with the
International Offering, nor shall it arrange for the sale of any Shares
hereunder (a) to any U.S. Person or (b) to any person or entity in violation of
the securities laws of the jurisdiction in which such person resides or such
entity was organized. (As used herein, the term "U.S. Person" means: (i) any
natural person resident in the United States or any corporation organized or
incorporated under the laws of the United States (other than a branch or agency
thereof located outside the United States), (ii) any branch or agency located in
the United States of a corporation incorporated or partnership organized under
the laws of any jurisdiction other than the United States, (iii) any account
managed or held on a non-discretionary basis for any person, corporation or
partnership referred to in clause (i) or (ii), and (iv) any account (including
any estate or trust) managed or held on a discretionary basis by a person,
corporation or partnership referred to in clause (i) or (ii)). The Company
shall pay to the Placement Agents in the aggregate 6% of the proceeds received
by the Company from the sale of the Shares (whether made in the International
Offering or in the U.S. Offering or both) as set forth on the cover page of the
Prospectus (as hereinafter defined).
2. Delivery and Payment. Concurrently with the execution and delivery of
--------------------
this Agreement, the Company, the International Placement Agents, and Citibank,
N.A., London, England, as escrow agent (the "International Escrow Agent"), shall
enter into an escrow agreement substantially in the form of Exhibit A attached
hereto (the "International Escrow Agreement"), pursuant to which an escrow
account will be established, at the Company's expense, for the benefit of non-
U.S. Investors (the "International Escrow Account"). The International Escrow
Agreement will provide that prior to the Closing Date, (i) each non-U.S.
Investor will deposit in the International Escrow Account an amount equal to the
price per Share multiplied by the number of Shares purchased by it, and (ii) the
International Escrow Agent will notify the Company and the International
Placement Agents in writing whether such Investors have deposited in the
International Escrow Account funds in an amount which, when added to the funds
deposited by U.S. Investors pursuant to the U.S. Escrow Agreement in the U.S.
2
<PAGE>
Escrow Account, will equal the Requisite Funds. At 2:00 p.m., London time, on
April __, 1995, or at such other time on such other date as may be agreed upon
by the Company and the International Placement Agents but in no event prior to
the date on which the International Escrow Agent and the U.S. Escrow Agent shall
have received all of the Requisite Funds, the Escrow Agents will release the
Requisite Funds from the Escrow Accounts for collection by the Company and the
International Placement Agents or the U.S. Placement Agents, as the case may be,
as provided in the International Escrow Agreement and the U.S. Escrow Agreement,
respectively, and the Company shall deliver the Shares to Investors[, which
delivery may be made through the facilities of the Depository Trust Company].
The closing of the Offerings (the "Closing") shall take place simultaneously at
the office of Morgan, Lewis & Bockius, London, England, and at the office of
Stroock & Stroock & Lavan, New York, New York. All actions taken at the Closing
shall be deemed to have occurred simultaneously.
3. Representations and Warranties of the Company. The Company hereby
---------------------------------------------
represents and warrants to each International Placement Agent as follows:
(a) At the time and on the date the Registration Statement (as
hereinafter defined) is declared effective (the "Effective Date") by the
Commission, the Registration Statement complied, and, on the date of the
Prospectus, on the date any post-effective amendment to the Registration
Statement shall become effective, on the date any supplement or amendment
to the Prospectus is filed with the Commission and on the Closing Date, the
Registration Statement and the Prospectus (and any amendment thereof or
supplement thereto) will comply, in all material respects, with the
applicable provisions of the Securities Act, the Rules, the Exchange Act
and the rules and regulations of the Commission thereunder; the
Registration Statement did not, as of the Effective Date, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; and on the other dates referred to above neither
the Registration Statement nor any amendment thereof or supplement thereto
will contain any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein not misleading; and on the other dates referred
to above neither the Prospectus nor any amendment thereof or supplement
thereto will contain any untrue statement of a material fact or will omit
to state any material fact required to be stated therein, in the light of
the circumstances under which they were made, not misleading. The Company
will use the International Offering Memorandum, Subject to Completion dated
March 14, 1995 (the
3
<PAGE>
"Preliminary International Offering Memorandum) and the International
Offering Memorandum (the "International Offering Memorandum"), which
consist of copies of the preliminary prospectus and the Prospectus (and the
documents incorporated therein by reference), respectively, each as
supplemented by stickers dated March 15, 1995 and the Effective Date,
respectively, to offer and sell the Shares in the International Offering.
(b) The Company hereby makes to each International Placement Agent the
representations and warranties set forth in Section 3(c) through (j), and
(l) through (x) of the U.S. Placement Agency Agreement except that
references to the "Registration Statement and the Prospectus" shall mean
the Prospectus only.
(c) The Common Stock is approved for quotation on the National
Association of Securities Dealers Automated Quotation ("Nasdaq") National
Market.
4. Conditions of the International Placement Agents' Obligations.
-------------------------------------------------------------
The obligations of the International Placement Agents under this Agreement are
several and not joint and are subject to each of the following terms and
conditions:
(a) Notification that the Registration Statement has become effective
shall have been received by the International Placement Agents.
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no
order suspending the effectiveness of the Registration Statement shall be
in effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional information
on the part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied with.
(c) The representations and warranties of the Company contained in
this Agreement and in the certificates delivered pursuant to Section 4(d)
shall be true and correct when made and on and as of the Closing Date as if
made on such date and the Company shall have performed all covenants and
agreements and satisfied all the conditions contained in this Agreement
required to be performed or satisfied by it at or before the Closing Date.
(d) The International Placement Agents shall have received on the
Closing Date a certificate, addressed to the International Placement Agents
and dated the Closing Date, of the chief executive or chief operating
officer and the chief financial officer or chief accounting officer of the
Company, to the effect that the signers of such
4
<PAGE>
certificate have carefully examined the Registration Statement, the
Prospectus and this Agreement and that the representations and warranties
of the Company in this Agreement are true and correct on and as of the
Closing Date with the same effect as if made on the Closing Date and the
Company has performed all covenants and agreements and satisfied all
conditions contained in this Agreement required to be performed or
satisfied by it at or prior to the Closing Date.
(e) The International Placement Agents shall have received at the
Effective Date and on the Closing Date a letter or letters signed by each
of Ernst & Young LLP and Deloitte & Touche LLP, addressed to the
International Placement Agents and dated the date of this Agreement and the
Closing Date, in form and substance satisfactory to the International
Placement Agents, confirming that they are independent accountants within
the meaning of the Securities Act and the Rules, that the response to Item
10 of the Registration Statement is correct insofar as it relates to them
and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules, if any, included in the Registration
Statement and the Prospectus and reported on by them comply as to form
in all material respects with the applicable accounting requirements
of the Securities Act and the Rules;
(ii) on the basis of a reading of the amounts included in the
Registration Statement and the Prospectus under the headings "Summary
Consolidated Financial Data" and "Selected Consolidated Financial
Data," carrying out certain procedures (but not an audit in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter, a reading of the minutes of the
meetings of the stockholders and directors of the Company, and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company as to transactions
and events subsequent to the date of the latest audited financial
statements, nothing came to their attention which caused them to
believe that:
(A) the amounts in "Summary Consolidated Financial
Information" and "Selected Consolidated Financial Data" included
in the Registration Statement and the Prospectus do not agree
with the corresponding amounts in the audited and unaudited
financial statements from which such amounts were derived; or
5
<PAGE>
(B) the unaudited financial statements at December 31,
1994 and for the six months then ended included in the
Registration Statement (i) do not comply in form in all material
respects with the applicable accounting requirements of the
Securities Act and the Rules and (ii) are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements; or
(C) (i) with respect to the Company there were, at a
specified date not more than five business days prior to the date
of the letter, any increases in the short-term and long-term debt
(in the aggregate in excess of $ 500,000) of the Company and the
Subsidiaries or capital stock of the Company or decreases in
working capital (in excess of $ 8,000,000) or the stockholders'
equity (in excess of $ 8,000,000) of the Company and the
Subsidiaries, as compared with the amounts shown on the Company's
unaudited December 31, 1994 balance sheet included in the
Registration Statement, or (ii) for the period from January 1,
1995 to such specified date not more than five business days
prior to the date of the letter, there were any decreases (in
excess of $ 1,000,000) as compared with the corresponding period
in the prior fiscal period in total revenue or increases in net
loss per common share (in excess of $.50) or, if there were any
such decreases or increases, the Company shall deliver to the
International Placement Agents a letter containing an explanation
by the Company as to the significance thereof unless said
explanation is not deemed necessary by the International
Placement Agents; and
(iii) they have performed certain other procedures as a result
of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general
accounting records of the Company) set forth in [the Registration
Statement and] the Prospectus and reasonably specified by the
International Placement Agents agrees with the accounting records of
the Company.
References to the Registration Statement and the Prospectus in this
paragraph (e) are to such documents as amended and supplemented at the date
of the letter.
6
<PAGE>
(f) The International Placement Agents shall have received on the
Closing Date from Stroock & Stroock & Lavan, counsel for the Company, an
opinion, addressed to them and dated the Closing Date, containing the
statements required to be included therein pursuant to Section 4(f) of the
U.S. Placement Agency Agreement and, in addition, the following:
(i) In connection with the offer, sale and delivery of the
Shares by the Company in the International Offering, it is not
necessary to register the Shares under the Securities Act by reason of
Regulation S thereunder; and
(ii) The Shares offered and sold by the Company pursuant to
Regulation S may be resold in the United States pursuant to the
Registration Statement.
(g) The International Placement Agents shall have received on the
Closing Date from each of (i) Patton, Boggs, L.L.P., FDA counsel to the
Company, (ii) Knobbe, Martens, Olsen & Bear, patent counsel for the
Company, (iii) Theodore Roth, general counsel of the Company and (iv)
Morgan, Lewis & Bockius, special counsel to the Placement Agents, an
opinion, addressed to the U.S. Placement Agents and dated the Closing Date,
containing the statements required to be included therein pursuant to
Section 4(g), (h), (i) and (j), respectively, of the U.S. Placement Agency
Agreement and containing the statement that the International Placement
Agents shall be entitled to rely upon such opinion as though it had been
addressed to them.
(h) The International Placement Agents shall have received on the
Closing Date a certificate, including exhibits thereto, addressed to the
International Placement Agents and dated the Closing Date, of the Secretary
or an Assistant Secretary of the Company, signed in such officer's capacity
as such officer, and certifying as to the (i) certificate of incorporation
and bylaws of the Company and the Subsidiaries (ii) resolutions authorizing
the execution and delivery of the Prospectus, this Agreement, the
International Escrow Agreement and the performance of the transactions
contemplated by this Agreement and the International Escrow Agreement, the
Prospectus and the International Offering and (iii) incumbency of the
person or persons authorized to execute and deliver this Agreement, the
International Escrow Agreement, the Prospectus and any other documents
contemplated by the International Offering.
(i) The International Placement Agents shall have received on the
Closing Date certificates of the Secretaries of States (or comparable
officials) where the
7
<PAGE>
Company is incorporated and owns or leases property as to the good standing
of the Company, listing all charter documents on file, qualification of the
Company and the Subsidiaries to do business as a foreign corporation,
payment of taxes and filing of annual reports. The International Placement
Agents shall have received copies of all charter documents of the Company
certified by the Secretary of State of the State of New York.
(j) The U.S. Escrow Agent and the International Escrow Agent shall
have on deposit the Requisite Funds.
5. Covenants of the Company. (A) The Company covenants and agrees
------------------------
as follows:
(a) The Company shall promptly advise the International Placement
Agents (i) when the Registration Statement shall have become effective,
(ii) when any amendment thereof shall have become effective, (iii) of any
request by the Commission for any amendment of the Prospectus or for any
additional information, (iv) of the prevention or suspension of the use of
any preliminary prospectus or the Prospectus or of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose and (v) of the receipt by the Company of any notification
with respect to the suspension of the qualification of the Shares for sale
in any jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company shall use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act and the Rules, any event
occurs as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall be
necessary to amend or supplement the Prospectus to comply with the
Securities Act or the Rules, the Company promptly shall prepare and file
with the Commission an amendment or supplement which shall correct such
statement or omission or an amendment which shall effect such compliance.
(c) The Company shall furnish to the International Placement Agents as
many copies of any Preliminary International Offering Memorandum and the
International Offering Memorandum (which shall reflect all amendments of
and supplements to any preliminary prospectus or the Prospectus pursuant to
paragraph (b) of this Section 5(A))
8
<PAGE>
and any amendments thereof and supplements thereto as the International
Placement Agents may reasonably request.
(d) On or before completion of the International Offering, the Company
shall make all filings required under applicable securities laws and by the
Nasdaq National Market (including any required registration under the
Exchange Act).
(B) The Company agrees to pay, or reimburse if paid by the
International Placement Agents, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated, all expenses incident to
the U.S. Offering as set forth in Section 5(B) of the U.S. Placement Agency
Agreement and, in addition, all costs and expenses of the Company incident to
the International Offering and the performance of the obligations of the Company
under this Agreement including but not limited to those relating to (i) the
preparation, printing, and distribution of each Preliminary International
Offering Memorandum, the International Offering Memorandum and all amendments
and supplements to the International Offering Memorandum; (ii) the preparation
and delivery of certificates for the Shares to the International Escrow Agent;
(iii) the registration or qualification of the Shares for offer and sale under
the securities laws of the various jurisdictions referred to in Section 5(A)(e),
including the fees, disbursements and other charges of counsel for the
International Placement Agents in connection with such registration and
qualification; (iv) the fees of the International Escrow Agent; (ix) the listing
of the Shares on the Nasdaq National Market and (x) fees, disbursements and
other charges of counsel for and the independent auditors of the Company. The
Company shall reimburse the Placement Agents, on a fully accountable basis, for
all travel, legal and other out-of-pocket expenses incurred in connection with
their engagement hereunder, up to a maximum of $200,000 in the aggregate,
including expenses incurred in connection with the engagement of the U.S.
Placement Agents under the U.S. Placement Agency Agreement.
6. Indemnification.
----------------
(a) The Company agrees to indemnify and hold harmless each
International Placement Agent and each person, if any, who controls any
International Placement Agent within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any and all
losses, claims, damages and liabilities, joint or several (including any
reasonable investigation, legal and other expenses incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding
or any claim asserted), to which they, or any of them, may become subject,
insofar as such losses, claims, damages or liabilities arise out of or are
based upon any untrue statement or alleged untrue
9
<PAGE>
statement of a material fact contained in any preliminary prospectus, the
Prospectus, any amendment thereof or supplement thereto or arise out of or
are based upon 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; provided, however, that such indemnity shall not
inure to the benefit of any International Placement Agent (or any person
controlling such International Placement Agent) on account of any losses,
claims, damages or liabilities arising from the sale of the Shares to any
person by such International Placement Agent if such untrue statement or
omission or alleged untrue statement or omission was made in such
preliminary prospectus, or the Prospectus, or such amendment or supplement,
in reliance upon and in conformity with information furnished in writing to
the Company by the International Placement Agent specifically for use
therein. This indemnity agreement will be in addition to any liability
which the Company may otherwise have.
(b) Each International Placement Agent agrees, severally and not
jointly, to indemnify and hold harmless the Company, each person, if any,
who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act and each director of the Company, to
the same extent as the foregoing indemnity from the Company to each
International Placement Agent, but only insofar as such losses, claims,
damages or liabilities arise out of or are based upon any untrue statement
or omission or alleged untrue statement or omission which was made in any
preliminary prospectus, or the Prospectus, or any amendment thereof or
supplement thereto, contained in the statements with respect to the
International Offering under the caption "Plan of Distribution" in the
Prospectus; provided, however, that the obligation of each International
Placement Agent to indemnify the Company (including any controlling person
or director thereof) shall be limited to the fee received by such
International Placement Agent.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 6(a) or 6(b) shall be available to
any party who shall fail to give notice as provided in this Section 6(c) if
the party to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by the failure to
give such notice but the omission so to notify such indemnifying party of
any
10
<PAGE>
such action, suit or proceeding shall not relieve it from any liability
that it may have to any indemnified party for contribution or otherwise
than under this Section. In case any such action, suit or proceeding shall
be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof and the approval by
the indemnified party of such counsel, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses, except as
provided below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection with the
defense thereof. The indemnified party shall have the right to employ its
separate counsel in any such action, but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i) the
employment of counsel by such indemnified party has been authorized in
writing by the indemnifying parties, (ii) the indemnified party shall have
reasonably concluded that there may be a conflict of interest between the
indemnifying parties and the indemnified party in the conduct of the
defense of such action (in which case the indemnifying parties shall not
have the right to direct the defense of such action on behalf of the
indemnified party), it being understood that the indemnifying parties shall
not be liable for the expenses of more than one separate counsel
representing the indemnified party to such action or (iii) the indemnifying
parties shall not have employed counsel to assume the defense of such
action within a reasonable time after notice of the commencement thereof,
in each of which cases the fees and expenses of counsel shall be at the
expense of the indemnifying parties. An indemnifying party shall not be
liable for any settlement of any action, suit, proceeding or claim effected
without its written consent.
7. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnification provided for in
Section 6(a) or 6(b) is due in accordance with its terms but for any reason is
held to be unavailable from the Company or the International Placement Agents,
as the case may be, the Company and the International Placement Agents shall
contribute to the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses reasonably incurred in connection
with, and any amount paid in settlement of, any action, suit or proceeding or
any claims asserted, but after deducting any
11
<PAGE>
contribution received by any person entitled hereunder to contribution from any
person who may be liable for contribution) to which the Company and one or more
of the International Placement Agents may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the International Placement Agents on the other from the International
Offering or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 6 hereof, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company on the one hand and the International
Placement Agents on the other in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by the Company and the International Placement Agents shall be deemed to be in
the same proportion as (x) the total proceeds from the International Offering
(before deducting Company expenses) received by the Company, as set forth in the
table on the cover page of the Prospectus, bear to the fee received by such
International Placement Agent hereunder. The relative fault of the Company and
the International Placement Agents shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
related to information supplied by the Company or the International Placement
Agents and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the International Placement Agents 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 International Placement Agents were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above. The amount paid
or payable by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in this
Section 7 shall be deemed to include for purposes of this Section 7 any legal or
other expenses incurred by such indemnified party in connection with
investigating or defending any such action or claims. Notwithstanding the
provisions of this Section 7, in no case shall any International Placement Agent
be liable or responsible for any amount in excess of the fee received by it
hereunder and 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. For purposes of this Section 7, each person, if any, who
controls the International Placement Agent within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act shall have the same
rights to contribution as such International Placement Agent, and each person,
if any, who controls the Company within the meaning of
12
<PAGE>
the Section 15 of the Securities Act or Section 20(a) of the Exchange Act, and
each director of the Company shall have the same rights to contribution as the
Company, as the case may be, subject in each case to clauses (i) and (ii) in the
second preceding sentence and to the immediately preceding sentence of this
Section 7. Any party entitled to contribution will, promptly after receipt of
notice of commencement of any action, suit or proceeding against such party in
respect of which a claim for contribution may be made against another party or
parties under this Section, notify such party or parties from whom contribution
may be sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section. No party shall
be liable for contribution with respect to any action, suit, proceeding or claim
settled without its written consent. The International Placement Agents'
obligations to contribute pursuant to this Section 7 are several in proportion
to their respective fees and not joint.
8. Termination. This Agreement may be terminated by the
-----------
International Placement Agents without liability on the part of the
International Placement Agents to the Company if, by notifying the Company at
any time prior to delivery and payment for the Shares:
(a) in the absolute discretion of the International Placement Agents
at or before the Closing Date: (i) on or prior to such date, any domestic
or international event or act or occurrence has materially disrupted, or in
the opinion of the International Placement Agents will in the future
materially disrupt, the securities markets; (ii) there has occurred any new
outbreak or material escalation of hostilities or other calamity or crisis
the effect of which on the financial markets is such as to make it, in the
judgment of the International Placement Agents, inadvisable to proceed with
the International Offering; (iii) there shall be such a material adverse
change in general financial, political or economic conditions or the effect
of international conditions on the financial markets is such as to make it,
in the judgment of the International Placement Agents, inadvisable or
impracticable to market the Shares; (iv) trading in the Shares has been
suspended by the Commission or trading generally on the New York Stock
Exchange, Inc. or on the American Stock Exchange, Inc. has been suspended
or limited, or minimum or maximum ranges for prices for securities shall
have been fixed, or maximum ranges for prices for securities have been
required, by said exchanges or by order of the Commission, the National
Association of Securities Dealers, Inc., or any other governmental or
regulatory authority; or (v) a banking moratorium has been declared by any
state or Federal authority, or
13
<PAGE>
(b) any of the conditions specified in Section 5 shall not have been
fulfilled when and as required by this Agreement.
The obligations of the parties under this Agreement shall be
terminated in the event that the Requisite Funds shall not have been deposited
by Investors by the close of business on the Closing Date.
9. Miscellaneous. The respective agreements, representations,
-------------
warranties, indemnities and other statements of the Company or its officers in
certificates delivered pursuant to this Agreement shall remain in full force and
effect, regardless of any investigation made by or on behalf of any
International Placement Agent or any of the officers, directors or controlling
persons referred to in Sections 6 and 7 hereof, and shall survive delivery of
and payment for the Shares. The provisions of Sections 5(B), 6 and 7 shall
survive the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
International Placement Agents and the Company and their respective successors
and assigns, and, to the extent expressed herein, for the benefit of persons
controlling any of the International Placement Agents or the Company, and
directors and officers of the Company, if any, and their respective successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. The term "successors and assigns" shall not include
any purchaser of Shares merely because of such purchase.
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the International Placement Agents, c/o ABB Aros
Fondkommission AB, S-113 96 Stockholm, Sweden, Attention: [Peder Fredrikson] and
(b) if to the Company, to its agent for service as such address appears on the
cover page of the Registration Statement.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
14
<PAGE>
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
ALLIANCE PHARMACEUTICAL CORP.
By _____________________________
Name: Duane J. Roth
Title: Chief Executive Officer
Confirmed:
OPPENHEIMER & CO., INC.
By____________________________
Name: Peter J. Crowley
Title: Managing Director
COWEN & COMPANY
By____________________________
Name: Nancy M. Crowell
Title: Managing Director
ABB AROS FONDKOMMISSION AB
By____________________________
Name:
Title:
15
<PAGE>
Schedule I
Subsidiaries
------------
Astral, Inc. (85% owned)
BioPulmonics, Inc. (100% owned)
Rosanin Corporation (100% owned)
Applications et Transfers de Technologies Advances S.A. (99% owned)
16
<PAGE>
Draft as of April 6, 1995
2,500,000 Shares
ALLIANCE PHARMACEUTICAL CORP.
Common Stock
U.S. PLACEMENT AGENCY AGREEMENT
-------------------------------
________, 1995
Oppenheimer & Co., Inc.
Cowen & Company
c/o Oppenheimer & Co., Inc.
Oppenheimer Tower
World Financial Center
New York, New York 10281
Ladies and Gentlemen:
Alliance Pharmaceutical Corp., a New York corporation (the "Company"),
proposes to issue and sell an aggregate of up to 2,500,000 shares (the "Shares")
of common stock, par value $.01 per share (the "Common Stock") principally to
selected institutional investors (collectively, "Investors") both within the
United States (the "U.S. Offering") and in Sweden and certain other countries
outside the United States (the "International Offering"; together with the U.S.
Offering, the "Offerings"). (For purposes of this Agreement, the term "United
States" means the United States of America, its territories and its possessions,
any State of the United States and the District of Columbia). The Company
desires to engage you as its placement agents (the "U.S. Placement Agents") in
connection with the U.S. Offering. Concurrently herewith, the Company has
engaged you and ABB Aros Fondkommission AB (collectively, the "International
Placement Agents"; together with the U.S. Placement Agents, the "Placement
Agents") as its placement agents in connection with the International Offering,
pursuant to a separate placement agency agreement (the "International Placement
Agency Agreement") which is attached hereto as Exhibit B. The International
Offering shall be conducted outside the United States in accordance with the
exemption from registration provided by Regulation S promulgated under the
Securities Act of 1933, as amended (the "Securities Act"). The closing of the
Offerings shall be conditioned upon the sale of all of the 2,500,000 Shares.
The Company hereby confirms its agreements with the U.S. Placement
Agents as follows:
<PAGE>
1. Agreement to Act as U.S. Placement Agents. On the basis of the
-----------------------------------------
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions of this Agreement, the U.S. Placement
Agents agree to act as the Company's exclusive placement agents, on a best
efforts basis, in connection with the issuance and sale by the Company of the
Shares to Investors. The Company shall pay to the Placement Agents in the
aggregate 6% of the proceeds received by the Company from the sale of the Shares
as set forth on the cover page of the Prospectus (as hereinafter defined).
2. Delivery and Payment. Concurrently with the execution and
--------------------
delivery of this Agreement, the Company, the U.S. Placement Agents, and
Citibank, N.A., as escrow agent (the "U.S. Escrow Agent"), shall enter into an
escrow agreement substantially in the form of Exhibit A attached hereto (the
"U.S. Escrow Agreement"), pursuant to which an escrow account will be
established, at the Company's expense, for the benefit of U.S. Investors (the
"U.S. Escrow Account"). The U.S. Escrow Agreement will provide that prior to
the Closing Date, (i) each U.S. Investor will deposit in the U.S. Escrow Account
an amount equal to the price per Share multiplied by the number of Shares
purchased by it, and (ii) the U.S. Escrow Agent will notify the Company and the
U.S. Placement Agents in writing whether such Investors have deposited in the
U.S. Escrow Account funds in an amount which, when added to the funds deposited
by the non-U.S. Investors in the International Escrow Account pursuant to the
International Escrow Agreement (as such terms are defined in the International
Placement Agency Agreement), shall equal the proceeds of the sale of all of the
Shares offered in the Offerings (the "Requisite Funds"). At 9:00 a.m., New York
City time, on April __, 1995, or at such other time on such other date as may be
agreed upon by the Company and the U.S. Placement Agents but in no event prior
to the date on which the Escrow Agents shall have received all of the Requisite
Funds (such date is hereinafter referred to as the "Closing Date"), the Escrow
Agents will release the Requisite Funds from the Escrow Accounts for collection
by the Company and the U.S. Placement Agents or the International Placement
Agents, as the case may be, as provided in the U.S. Escrow Agreement and the
International Escrow Agreement, respectively, and the Company shall deliver the
Shares to Investors, which delivery may be made through the facilities of the
Depository Trust Company. The closing of the Offerings (the "Closing") shall
take place at the office of Stroock & Stroock & Lavan, Seven Hanover Square, New
York, New York 10004 and at the office of Morgan, Lewis & Bockius, London,
England. All actions taken at the Closing shall be deemed to have occurred
simultaneously.
3. Representations and Warranties of the Company. The Company
---------------------------------------------
hereby represents and warrants to each U.S. Placement Agent as follows:
2
<PAGE>
(a) At the time and on the date the Registration Statement (as
hereinafter defined) is declared effective (the "Effective Date") by the
Securities and Exchange Commission (the "Commission"), the Registration
Statement complied, and, on the date of the Prospectus, on the date any
post-effective amendment to the Registration Statement shall become
effective, on the date any supplement or amendment to the Prospectus is
filed with the Commission and on the Closing Date, the Registration
Statement and the Prospectus (and any amendment thereof or supplement
thereto) will comply, in all material respects, with the applicable
provisions of the Securities Act of 1933, as amended (the "Securities
Act"), the published rules and regulations adopted by the Commission
thereunder (the "Rules"), the Securities Exchange Act of 1934, as amended
(the "Exchange Act") and the rules and regulations of the Commission
thereunder; the Registration Statement did not, as of the Effective Date,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and on the other dates referred to
above neither the Registration Statement nor any amendment thereof or
supplement thereto will contain any untrue statement of a material fact or
will omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading; and on
the other dates referred to above the Prospectus (as so amended or
supplemented) will not contain any untrue statement of a material fact or
will omit to state any material fact required to be stated therein, in the
light of the circumstances under which they were made, not misleading.
When any related preliminary prospectus was first filed with the Commission
(whether filed as part of the Registration Statement or any amendment
thereto or pursuant to Rule 424(a) of the Rules) and when any amendment
thereof or supplement thereto was first filed with the Commission, such
preliminary prospectus as amended or supplemented as of its date complied
in all material respects with the applicable provisions of the Securities
Act and the Rules and did not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading. The
Company makes no representation or warranty as to the statements contained
under the caption "Plan of Distribution" in the Prospectus. The Company
acknowledges that such statements constitute the only information furnished
in writing by the Placement Agents specifically for inclusion in the
Registration Statement, any preliminary prospectus or the Prospectus.
The term "preliminary prospectus" means any preliminary prospectus (as
described in Rule 430 of the Rules) included as part of such registration
statement. The term "Registration Statement" means the Company's
registration statement on Form S-3 (No. 33-58093) as
3
<PAGE>
amended at the Effective Date, including all exhibits and information, if
any, deemed to be part of the Registration Statement pursuant to Rule
424(b) and Rule 430A of the Rules. The term "Prospectus" means the
prospectus in the form first used to confirm sales of the Shares (whether
such prospectus was included in the Registration Statement at the time of
effectiveness or was subsequently filed with the Commission pursuant to
Rule 424(b) of the Rules).
(b) All contracts and other documents required to be filed as exhibits
to the Registration Statement have been filed with the Commission as
exhibits to the Registration Statement.
(c) The documents incorporated by reference in the Prospectus, when
they were filed with or submitted to the Commission, conformed in all
material respects to the requirements of the Exchange Act and the rules and
regulations thereunder and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading.
(d) The consolidated financial statements of the Company and the
Subsidiaries (as defined in paragraph (f) of this Section 3) (including all
notes and schedules thereto) included in the Registration Statement and
Prospectus fairly present on a consolidated basis the financial position,
the results of operations and cash flows and the stockholders' equity
(deficit) and the other information purported to be shown therein of the
Company and the Subsidiaries at the respective dates and for the respective
periods to which they apply, subject, in the case of the unaudited
financial information, to year-end adjustments which the Company believes
will be normally occurring and are necessary for a fair presentation; and
such financial statements have been prepared in conformity with generally
accepted accounting principles, consistently applied throughout the periods
involved, and all adjustments necessary for a fair presentation of the
results for such periods have been, or, in the case of year-end adjustments
for the unaudited financial information, will be made.
(e) Ernst & Young LLP and Deloitte & Touche LLP, each of whose reports
are filed with the Commission as a part of the Registration Statement, are
and, during the periods covered by their reports, were independent public
accountants as required by the Securities Act and the Rules.
(f) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of New York. The
Company has no
4
<PAGE>
subsidiary or subsidiaries and does not control, directly or indirectly,
any corporation, partnership or joint venture except for the subsidiaries
listed in Schedule I hereto (collectively, the "Subsidiaries"). Each of
the Subsidiaries has been duly organized and is validly existing as a
corporation in good standing under the laws of its jurisdiction of
incorporation. The Company and each of the Subsidiaries are duly qualified
and in good standing as a foreign corporation in each jurisdiction in which
the character or location of their respective assets or properties (owned,
leased or licensed) or the nature of their respective businesses makes such
qualification necessary except for such jurisdictions where the failure to
so qualify would not have a material adverse effect on the assets or
properties, business, results of operations or financial condition of the
Company and the Subsidiaries, taken as a whole. Except as disclosed in the
Registration Statement and the Prospectus, the Company does not own, lease
or license any asset or property or conduct any business outside the United
States. The Company and each of the Subsidiaries have all requisite
corporate power and authority, and all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits of and from all
governmental or regulatory bodies or any other person or entity, to own,
lease and license their respective assets and properties and conduct their
respective businesses as now being conducted and as described in the
Registration Statement and the Prospectus, except for such licenses,
certificates or permits which, if not obtained, would not have a material
adverse effect on the Company and the Subsidiaries, taken as a whole; no
such authorization, approval, consent, order, license, certificate or
permit contains a materially burdensome restriction other than as disclosed
in the Registration Statement and the Prospectus; and the Company has all
such corporate power and authority, and such authorizations, approvals,
consents, orders, licenses, certificates and permits to enter into, deliver
and perform this Agreement and to issue and sell the Shares (except as may
be required under the Securities Act and state and foreign Blue Sky laws).
(g) To the best of the Company's knowledge, the Company and each of
the Subsidiaries own, or possess adequate and enforceable rights to use,
each of the patents listed in the Registration Statement and the Prospectus
under the caption "Business - Proprietary Technology" (the "Patents") and,
except as disclosed in the Registration Statement and the Prospectus, own
or possess adequate and enforceable rights to use all other patents, patent
applications, trademarks, trademark applications, service marks,
copyrights, copyright applications, licenses and other similar rights
(collectively with the Patents, "Intangibles") necessary for the conduct of
their
5
<PAGE>
respective businesses as now being conducted and as described in the
Registration Statement and the Prospectus. To the best knowledge of the
Company, neither the Company nor any of the Subsidiaries has infringed or
is infringing on or has received any notice of infringement of any
Intangible of any other person that will have a material adverse effect
upon the properties, business, results of operations or financial condition
of the Company and the Subsidiaries, taken as a whole.
(h) The Company and each of the Subsidiaries have good and marketable
title in fee simple to each of the items of real property and good title to
each of the items of personal property which are reflected in the financial
statements referred to in paragraph (d) of this Section 3 or are referred
to in the Registration Statement and the Prospectus as being owned by them
and valid and enforceable leasehold interests in each of the items of real
and personal property which are referred to in the Registration Statement
and the Prospectus as being leased by them, in each case free and clear of
all liens, encumbrances, claims, security interests and defects, other than
those described in the Registration Statement and the Prospectus and those
which do not and will not have a material adverse effect upon properties,
business, results of operations or financial condition of the Company and
the Subsidiaries, taken as a whole.
(i) Except as disclosed in the Registration Statement and the
Prospectus, there is no litigation or governmental or other proceeding or
investigation before any court or before or by any public body or board
pending or, to the Company's best knowledge, threatened (and the Company
does not know of any basis therefor) against or involving the assets,
properties or business of, the Company or any of the Subsidiaries which
would materially adversely affect the value or the operation of any such
assets, properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a
whole.
(j) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
therein, there has not been any material adverse change in the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business; the Company and the Subsidiaries have not sustained any material
loss or interference with their assets, businesses or properties from fire,
explosion, earthquake, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or legislative or other
6
<PAGE>
governmental action, order or decree; and since the date of the latest
balance sheet included in the Registration Statement and the Prospectus,
except as reflected therein, neither the Company nor any of the
Subsidiaries has undertaken any liability or obligation, direct or
contingent, except for liabilities or obligations undertaken in the
ordinary course of business.
(k) Each agreement listed as an exhibit to the Registration Statement
is in full force and effect and is valid and enforceable by the Company or
one of the Subsidiaries in accordance with its terms, assuming the due
authorization thereof by each of the other parties thereto. Neither the
Company, nor any of the Subsidiaries nor, to the best of the Company's
knowledge, any other party is in default in the observance or performance
of any term or obligation to be performed by it under any such agreement,
and no event has occurred which with notice or lapse of time or both would
constitute such a default, which default or event would have a material
adverse effect on the assets or properties, business, results of
operations, prospects or condition (financial or otherwise) of the Company
and the Subsidiaries, taken as a whole. No default exists, and no event
has occurred and is continuing which with notice or lapse of time or both
would constitute a default (in each case which has not been waived), in the
due performance and observance of any term, covenant or condition by the
Company or any of the Subsidiaries of any other indenture, mortgage, deed
of trust, note or any 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 or businesses may be bound or affected, which default or event
would have a material adverse effect on the assets or properties, business,
results of operations, prospects or condition (financial or otherwise) of
the Company and the Subsidiaries, taken as a whole.
(l) Neither the Company nor any of the Subsidiaries is in violation of
any term or provision of its charter or by-laws or of any franchise,
license, permit, judgment, decree, order, statute, rule or regulation,
where the consequences of such violation would have a material adverse
effect on the assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole.
(m) Neither the execution, delivery and performance of this Agreement,
the U.S. Escrow Agreement, the International Placement Agency Agreement or
the International Escrow Agreement (the "Transaction Agreements") by the
Company nor the consummation of any of the transactions contemplated hereby
or thereby (including, without limitation, the issuance and sale by the
Company of
7
<PAGE>
the Shares) will give rise to a right to terminate or accelerate the due
date of any payment due under, or conflict with or result in the breach of
any term or provision of, or constitute a default (or an event which with
notice or lapse of time or both would constitute a default) under, or
require any consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any properties or assets
of the Company or the Subsidiaries pursuant to the terms of, any indenture,
mortgage, deed of trust 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 or businesses is bound, or any franchise, license,
permit, judgment, decree, order, statute, rule or regulation applicable to
the Company or any of the Subsidiaries or violate any provision of the
charter or by-laws of the Company or any of the Subsidiaries except for
such consents or waivers which have already been obtained and are in full
force and effect, copies of which have been delivered to the U.S. Placement
Agents.
(n) The Company has an authorized and, at December 31, 1994,
outstanding capital stock as set forth under the caption "Capitalization"
in the Prospectus; there have been no changes in the outstanding capital
stock of the Company since that date except to the extent that certain
outstanding options and warrants may have been exercised. All of the
outstanding shares of Common Stock have been duly and validly issued and
are fully paid and nonassessable and none of them was issued in violation
of any preemptive or other similar right. The Company owns all of the
shares of capital stock of the Subsidiaries, free and clear of all liens,
claims, security interests, restrictions, stockholders' agreements, voting
trusts, and any other encumbrances whatsoever. The Company owns the
percentage of the outstanding capital stock of each Subsidiary, as shown on
Schedule I, free and clear of all liens, claims, security interests,
restrictions, stockholders' agreements, voting trusts and any other
encumbrances whatsoever. The Shares, when issued and sold pursuant to this
Agreement, will be duly and validly issued, fully paid and nonassessable
and none of them will be issued in violation of any preemptive or other
similar right. Except as disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or other right calling
for the issuance of, and no commitment, plan or arrangement to issue, any
share of capital stock of the Company or any security convertible into, or
exercisable or exchangeable for, such stock. The Common Stock and the
Shares conform in all material respects to all statements in relation
thereto contained in the Registration Statement and the Prospectus.
8
<PAGE>
(o) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as described
or referred to therein, neither the Company nor any of the Subsidiaries has
(i) issued any securities (other than the issuance of shares pursuant to
the exercise of outstanding options or warrants or the grant or issuance of
options under the Company's existing stock option plan) or incurred any
liability or obligation, direct or contingent, for borrowed money, (ii)
entered into any transaction not in the ordinary course of business or
(iii) declared or paid any dividend or made any distribution on any shares
of its capital stock or redeemed, purchased or otherwise acquired or agreed
to redeem, purchase or otherwise acquire any shares of its capital stock.
(p) No holder of any security of the Company has any right which has
not been waived to have any security owned by such holder included in the
Registration Statement or any right which has not been waived to demand
registration of any security owned by such holder during the period ending
180 days from this Agreement. The Company has obtained from all officers
and directors of the Company, who together hold _________ shares of Common
Stock, their written agreement that for a period of at least 90 days from
the date of this Agreement they will not, without the prior written consent
of the Placement Agents, directly or indirectly sell, distribute, pledge or
otherwise dispose of or encumber, or exercise any registration rights with
respect to, any shares of Common Stock owned by them.
(q) All necessary corporate action has been duly and validly taken by
the Company to authorize the execution, delivery and performance of the
Transaction Agreements and the issuance and sale of the Shares in the
Offerings. The Transaction Agreements have been duly and validly executed
and delivered by the Company and constitute and will constitute the legal,
valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms, except (A) as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles and (B)
with respect to this Agreement and the International Placement Agreement,
to the extent that rights to indemnity or contribution under this Agreement
may be limited by Federal and state securities laws or the public policy
underlying such laws.
(r) Neither the Company nor any of the Subsidiaries is involved in any
labor dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a material adverse effect on the
assets or properties, business, results of operations, prospects or
9
<PAGE>
condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole.
(s) No transaction has occurred between or among the Company and the
Subsidiaries and any of its or their officers or directors or any affiliate
or affiliates of any such officer or director that is required to be
described in and is not described in the Registration Statement and the
Prospectus.
(t) Neither the Company nor any of the Subsidiaries has taken, nor
will it take, directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, or which has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of the Common Stock to facilitate the sale or
resale of any of the Shares.
(u) The Company and the Subsidiaries have filed all Federal, state,
local and foreign tax returns which are required to be filed through the
date hereof, or have received extensions thereof, and have paid all taxes
shown on such returns and all assessments received by them to the extent
that the same are material and have become due.
(v) The Company has complied with all of the requirements of, and
filed the required forms as specified in, Florida Statutes Section 517.075.
(w) The Company and each of the Subsidiaries are insured by insurers
against such losses and risks as are disclosed in the Prospectus (or, if
the Prospectus is not in existence, in the most recent Preliminary
Prospectus); and neither the Company nor any of the Subsidiaries has reason
to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that would not materially adversely affect the Company or any of the
Subsidiaries or its business, assets, prospects, condition (financial or
otherwise) or results of operations.
(x) The business, operations and properties of the Company and the
Subsidiaries have been and are being conducted in compliance with all
applicable laws, ordinances, rules, regulations, licenses, permits,
approvals, plans, authorizations or requirements relating to occupational
safety and health, or pollution, or protection of health or the environment
(including, without limitation, those relating to emissions, discharges,
releases or threatened releases of pollutants, contaminants or hazardous or
toxic substances, materials or wastes into ambient air, surface water,
groundwater or land, or
10
<PAGE>
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of chemical substances,
pollutants, contaminants or hazardous or toxic substances, materials or
wastes, whether solid, gaseous or liquid in nature) of any governmental
department, commission, board, bureau, agency or instrumentality of the
United States, any state or political subdivision thereof, or any foreign
jurisdiction, and all applicable judicial or administrative agency or
regulatory decrees, awards, judgments and orders relating thereto, except
where the failure so to comply would not have a material adverse effect
upon the properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company and the Subsidiaries,
taken as a whole; and neither the Company nor any of the Subsidiaries has
received any notice from any governmental instrumentality or any third
party alleging any violation thereof or liability thereunder (including,
without limitation, liability for costs of investigating or remediating
sites containing hazardous substances and/or damages to natural resources).
4. Conditions of the U.S. Placement Agents' Obligations. The
----------------------------------------------------
obligations of the U.S. Placement Agents under this Agreement are several and
not joint and are subject to each of the following terms and conditions:
(a) Notification that the Registration Statement has become effective
shall have been received by the U.S. Placement Agents and the Prospectus
shall have been timely filed with the Commission in accordance with Section
5(A)(a).
(b) No order preventing or suspending the use of any preliminary
prospectus or the Prospectus shall have been or shall be in effect and no
order suspending the effectiveness of the Registration Statement shall be
in effect and no proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional information
on the part of the Commission (to be included in the Registration Statement
or the Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the U.S. Placement Agents.
(c) The representations and warranties of the Company contained in
this Agreement and in the certificates delivered pursuant to paragraph (d)
of this Section 4 shall be true and correct when made and on and as of the
Closing Date as if made on such date and the Company shall have performed
all covenants and agreements and satisfied all the conditions contained in
this Agreement required to be performed or satisfied by it at or before the
Closing Date.
11
<PAGE>
(d) The U.S. Placement Agents shall have received on the Closing Date
a certificate, addressed to the U.S. Placement Agents and dated the Closing
Date, of the chief executive or chief operating officer and the chief
financial officer or chief accounting officer of the Company, to the effect
that the signers of such certificate have carefully examined the
Registration Statement, the Prospectus and this Agreement and that the
representations and warranties of the Company in this Agreement are true
and correct in all material respects on and as of the Closing Date with the
same effect as if made on the Closing Date and the Company has performed
all covenants and agreements and satisfied all conditions contained in this
Agreement required to be performed or satisfied by it at or prior to the
Closing Date.
(e) The U.S. Placement Agents shall have received on the Effective
Date and on the Closing Date a letter or letters signed by each of Ernst &
Young LLP and Deloitte & Touche LLP, addressed to the U.S. Placement Agents
and dated the date of this Agreement and the Closing Date, in form and
substance satisfactory to the U.S. Placement Agents, confirming that they
are independent accountants within the meaning of the Securities Act and
the Rules, that the response to Item 10 of the Registration Statement is
correct insofar as it relates to them and stating in effect that:
(i) in their opinion the audited financial statements and
financial statement schedules, if any, included in the Registration
Statement and the Prospectus and reported on by them comply as to form
in all material respects with the applicable accounting requirements
of the Securities Act and the Rules;
(ii) on the basis of a reading of the amounts included in the
Registration Statement and the Prospectus under the headings "Summary
Consolidated Financial Data" and "Selected Consolidated Financial
Data," carrying out certain procedures (but not an audit in accordance
with generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter, a reading of the minutes of the
meetings of the stockholders and directors of the Company, and
inquiries of certain officials of the Company who have responsibility
for financial and accounting matters of the Company as to transactions
and events subsequent to the date of the latest audited financial
statements, nothing came to their attention which caused them to
believe that:
12
<PAGE>
(A) the amounts in "Summary Consolidated Financial
Information" and "Selected Consolidated Financial Data" included
in the Registration Statement and the Prospectus do not agree
with the corresponding amounts in the audited and unaudited
financial statements from which such amounts were derived; or
(B) the unaudited financial statements at December 31, 1994
and for the six months then ended included in the Registration
Statement (i) do not comply in form in all material respects with
the applicable accounting requirements of the Securities Act and
the Rules and (ii) are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent
with that of the audited financial statements; or
(C) (i) with respect to the Company there were, at a
specified date not more than five business days prior to the date
of the letter, any increases in the short-term and long-term debt
(in the aggregate in excess of $500,000) of the Company and the
Subsidiaries or capital stock of the Company (other than as a
result of the exercise of outstanding options and warrants) or
decreases in working capital (in excess of $ 8,000,000) or the
stockholders' equity (in excess of $ 8,000,000) of the Company
and the Subsidiaries, as compared with the amounts shown on the
Company's unaudited December 31, 1994 balance sheet included in
the Registration Statement, or (ii) for the period from January
1, 1995 to such specified date not more than five business days
prior to the date of the letter, there were any decreases (in
excess of $ 1,000,000) as compared with the corresponding period
in the prior fiscal period in total revenue or increases in net
loss per common share (in excess of $.50) or, if there were any
such decreases or increases, the Company shall deliver to the
U.S. Placement Agents a letter containing an explanation by the
Company as to the significance thereof unless said explanation is
not deemed necessary by the U.S. Placement Agents; and
(iii) they have performed certain other procedures as a result
of which they determined that certain information of an accounting,
financial or statistical nature (which is limited to accounting,
financial or statistical information derived from the general
accounting records of the Company) set forth
13
<PAGE>
in the Registration Statement and the Prospectus and reasonably
specified by the U.S. Placement Agents agrees with the accounting
records of the Company.
References to the Registration Statement and the Prospectus in this
paragraph (e) are to such documents as amended and supplemented at the date
of the letter.
(f) The U.S. Placement Agents shall have received on the Closing Date
from Stroock & Stroock & Lavan, counsel for the Company, an opinion,
addressed to the U.S. Placement Agents and dated the Closing Date, and
stating in effect that:
(i) The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of New
York.
(ii) The Company and each of the Subsidiaries have all requisite
corporate power and authority to own, lease and license their
respective assets and properties and conduct their respective business
as described in the Registration Statement and the Prospectus; and the
Company has all requisite corporate power and authority and all
necessary governmental, and all other necessary authorizations,
approvals, consents, orders, licenses, certificates and permits to
enter into, deliver and perform this the Transaction Agreements and to
issue and sell the Shares, other than those required under the
Securities Act and state and foreign Blue Sky laws.
(iii) The Company has authorized and issued capital stock as set
forth under the caption "Capitalization" in the Prospectus; the
certificates evidencing the Shares are in due and proper legal form
and have been duly authorized for issuance by the Company; all of the
outstanding shares of Common Stock have been duly and validly
authorized and issued; all of the outstanding shares of Common Stock
are fully paid and non-assessable and none of them was issued in
violation of any statutory preemptive or other similar statutory
right. The Company owns all of the issued and outstanding shares of
the capital stock of the Subsidiaries free and clear of all liens,
security interests, claims, restrictions, stockholders' agreements,
voting trusts and any other encumbrances whatsoever. The Shares, when
issued and sold pursuant to this Agreement, will be duly and validly
issued, fully paid and nonassessable and none of them will have been
issued in violation of any statutory preemptive or other similar
statutory right. Except as disclosed in the Registration Statement
and the Prospectus, to the best of such counsel's knowledge,
14
<PAGE>
there is no outstanding option, warrant or other right calling for the
issuance of, and no commitment or agreement to issue, any share of
capital stock of the Company or any of the Subsidiaries or any
security convertible into, exercisable for, or exchangeable for
capital stock of the Company or any of the Subsidiaries. The Common
Stock and the Shares conform in all material respects to the
descriptions thereof contained in the Registration Statement and the
Prospectus.
(iv) All necessary corporate action has been duly and validly
taken by the Company to authorize the execution, delivery and
performance of the Transaction Agreements. The Transaction Agreements
have been duly and validly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective
terms except (A) as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and by
general equitable principles and (B) with respect to this Agreement
and the International Placement Agency Agreement, to the extent that
rights to indemnity or contribution under this Agreement may be
limited by federal or state securities laws or the public policy
underlying such laws.
(v) Neither the execution, delivery and performance of the
Transaction Agreements, by the Company nor the consummation of any of
the transactions contemplated hereby or thereby (including the
issuance and sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any payment due
under, or conflict with or result in the breach of any term or
provision of, or constitute a default (or any event which with notice
or lapse of time, or both, would constitute a default) under, or
require consent or waiver (other than consents or waivers which have
been obtained and are in full force and effect, copies of which have
been delivered to the U.S. Placement Agents) under, or result in the
execution or imposition of any lien, charge or encumbrance upon any
properties or assets of the Company or any of the Subsidiaries
pursuant to the terms of, any indenture, mortgage, deed of trust, note
or other agreement or instrument of which such counsel is aware and to
which the Company or any of the Subsidiaries is a party or by which
any of them or any of their properties or businesses is bound, or any
franchise, license, permit, judgment, decree, order, statute (other
than any foreign blue sky laws), rule
15
<PAGE>
or regulation of which such counsel is aware or violate any provision
of the charter or by-laws of the Company or the Subsidiaries.
(vi) To the best of such counsel's knowledge, no default exists,
and no event has occurred and is continuing which with notice or lapse
of time, or both, would constitute a default (in each case which has
not been waived), in the due performance and observance of any term,
covenant or condition by the Company or any of the Subsidiaries, of
any indenture, mortgage, deed of trust, note or any other agreement or
instrument listed as an exhibit to the Registration Statement or one
of the documents incorporated by reference into the Registration
Statement, where the consequences of such default would have a
material and adverse effect on the assets, properties, business,
results of operations, prospects or condition (financial or otherwise)
of the Company and the Subsidiaries, taken as a whole.
(vii) To the best of such counsel's knowledge, neither the
Company nor any of the Subsidiaries is in violation of any term or
provision of its charter or by-laws or of any judgment, decree or
order known to such counsel or statute, rule or regulation, where the
consequences of such violation would have a material and adverse
effect on the assets or properties, businesses, results of operations,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole.
(viii) No consent, approval, authorization or order of any court
or governmental agency or body is required for the performance of the
Transaction Agreements by the Company or the consummation of the
transactions contemplated hereby or thereby, except such as have been
obtained under the Securities Act, such as may be required under state
securities or Blue Sky laws in connection with the placement of the
Shares by the U.S. Placement Agents (as to which such counsel need
express no opinion) and such as may be required under the rules of the
National Association of Securities Dealers, Inc. with respect to the
plan of distribution reflected in this Agreement (as to which such
counsel need express no opinion).
(ix) Except as described in the Registration Statement and the
Prospectus, to the best of such counsel's knowledge, there is no
litigation or governmental or other proceeding or investigation before
any court or before or by any public body or board pending or
threatened against, or involving the assets, properties or businesses
of, the Company or
16
<PAGE>
the Subsidiaries which would have a material adverse effect upon the
assets or properties, business, results of operations, prospects or
condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole.
(x) The statements in the Prospectus under the caption
"Business - Collaborative Relationships" insofar as such statements
constitute a summary of documents referred to therein or matters of
law, are fair summaries of the material provisions thereof and
accurately present the information required with respect to such
documents and matters. All contracts and other documents required to
be filed as exhibits to, or described in, the Registration Statement
have been so filed with the Commission or are described as required in
the Registration Statement, as the case may be.
(xi) The Registration Statement and the Prospectus and each
amendment or supplement thereto (except for the financial statements
and notes and schedules and other financial and statistical data
included 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 the Rules.
(xii) Such counsel has been advised by the Commission that the
Registration Statement has become effective under the Securities Act,
and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are threatened or
pending.
To the extent deemed advisable by such counsel, they may rely as to
matters of fact on certificates of responsible officers of the Company and
public officials. Copies of such certificates shall be furnished to the U.S.
Placement Agents and counsel for the U.S. Placement Agents.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of the
Company, representatives of the U.S. Placement Agents and representatives of the
independent certified public accountants of the Company, at which conferences
the contents of the Registration Statement and the Prospectus and related
matters were discussed and, although such counsel is not passing upon and does
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement and the Prospectus (except as
specified in the foregoing opinion), on the basis of the foregoing no facts have
come to the attention
17
<PAGE>
of such counsel which have caused such counsel to believe that the Registration
Statement at the time it became effective and at the Closing Date contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus as of its date and at the Closing Date contained any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need not express any belief with respect to the financial
statements and schedules, if any, and other financial and statistical data
included in the Registration Statement or the Prospectus).
(g) The U.S. Placement Agents shall have received on the Closing Date
from Patton, Boggs, L.L.P., special counsel for the Company, an opinion,
addressed to the U.S. Placement Agents and dated the Closing Date, and
concluding in effect that the statements in the Prospectus under "Business
- Manufacturing," "Business - Government Regulation" and "Risk Factors"
with respect to the status of U.S. government approval and in the
description of each of the Company's products under the caption "Business",
insofar as they purport to summarize the provisions of statutes and
regulations administered by the Food and Drug Administration (the "FDA")
and related documents therein described have been prepared by or reviewed
by such counsel and reflect accurately the provisions purported to be
summarized and are correct in all material respects.
(h) The U.S. Placement Agents shall have received on the Closing Date
from Knobbe, Martens, Olson & Bear, patent counsel for the Company, an
opinion addressed to the U.S. Placement Agents and dated the Closing Date,
and stating in effect that:
(i) The Company owns or possesses adequate and enforceable rights
to use the Patents and all other Intangibles necessary for the conduct
of its business as now being conducted and as described in the
Registration Statement and Prospectus. To the best of such counsel's
knowledge, neither the Company nor any of the Subsidiaries has
infringed, is infringing or has received any notice of infringement of
or conflict with any Intangibles of any other person that will have a
material adverse effect on the conduct of its business as now being
conducted and as described in the Registration Statement and
Prospectus.
(ii) Except for processing and examination of patent and
trademark applications before governmental bodies, there is no
litigation or governmental or other proceeding relating to the Patents
or any
18
<PAGE>
Intangibles necessary for the conduct of the Company's business as now
being conducted and as described in the Registration Statement and
Prospectus before any court or before or by any public body or board
pending to which the Company or the Subsidiaries is a party or
threatened against the Company or any of the Subsidiaries; neither the
Company nor any of the Subsidiaries has given notice to any third
party of any claim of infringement of its Patents or any Intangibles.
(iii) The statements in the Prospectus under "Business -
Patents" and "Risk Factors -Unpredictability of Patent Protection;
Proprietary Technology" insofar as they purport to summarize the
provisions of statutes, regulations, contracts, agreements, patents,
patent applications or other documents therein described, have been
prepared or reviewed by such counsel and accurately reflect the
provisions purported to be summarized and are correct in all material
respects.
In addition, such counsel shall state that although such counsel is
not passing upon and does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement and the Prospectus (except as explicitly set forth in the foregoing
opinion), on the basis of the foregoing (relying as to materiality to a large
extent upon the opinions of officers and other representatives of the Company),
no facts have come to the attention of such counsel which lead such counsel to
believe that the Registration Statement at the time it became effective (except
with respect to the financial statements and schedules thereto and other
financial and statistical data, as to which such counsel need make no statement)
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, or that the Prospectus as amended or supplemented (except with
respect to the financial statements and schedules thereto and other financial
and statistical data, as to which such counsel need make no statement) on the
date thereof contained any untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements therein in light
of the circumstances in which they were made, not misleading.
(i) The U.S. Placement Agents shall have received on the Closing Date
from Lloyd Rowland, general counsel of the Company, an opinion addressed to
the U.S. Placement Agents and dated the Closing Date, and stating in effect
that:
(i) To the best of such counsel's knowledge, other than the
Subsidiaries, the Company has no subsidiary and does not control,
directly or
19
<PAGE>
indirectly, any corporation, partnership, joint venture, association
or other business organization.
(ii) To the best of such counsel's knowledge, no default exists,
and no event has occurred which with notice or lapse of time, or both,
would constitute a default, in the due performance and observance of
any term, covenant or condition, by the Company or any of the
Subsidiaries, of any indenture, mortgage, deed of trust, note or any
other agreement or instrument to which the Company or any of the
Subsidiaries is a party or by which it or any of their assets or
properties or businesses may be bound or affected, where the
consequences of such default would have a material and adverse effect
on the assets, properties, business, results of operations, prospects
or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole.
(iii) To the best of such counsel's knowledge, neither the
Company nor any of the Subsidiaries is in violation of any term or
provision of its charter or by-laws or any franchise, license, permit,
judgment, decree, order, statute, rule or regulation, where the
consequences of such violation would have a material and adverse
effect on the assets, properties, business, results of operations,
prospects or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole.
(j) All proceedings taken in connection with the sale of the Shares in
the U.S. Offering as herein contemplated shall be reasonably satisfactory
in form and substance to the U.S. Placement Agents and their counsel and
the U.S. Placement Agents shall have received from Morgan, Lewis & Bockius
a favorable opinion, addressed to the U.S. Placement Agents and dated the
Closing Date, and stating in effect that:
(i) The Company and each of the Subsidiaries are corporations in
good standing under the laws of their respective jurisdictions of
incorporation.
(ii) The Shares being issued and sold by the Company today to
Investors have been duly authorized and when issued and sold by the
Company pursuant to the Placement Agency Agreements and in accordance
with the Escrow Agreements against payment of the consideration set
forth therein will be validly issued, fully paid and non-assessable.
(iii) The Placement Agency Agreements and the Escrow Agreements
have been duly authorized, executed and delivered on behalf of the
Company.
20
<PAGE>
(iv) The Registration Statement is effective under the Securities
Act and, to the best of our knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued by the
Commission and no proceedings for that purpose have been instituted or
are threatened by the Commission.
The Company shall have furnished to Morgan, Lewis & Bockius such
documents as they may reasonably request for the purpose of enabling them
to pass upon such matters.
(k) The U.S. Placement Agents shall have received on the Closing Date
a certificate, including exhibits thereto, addressed to the U.S. Placement
Agents and dated the Closing Date, of the Secretary or an Assistant
Secretary of the Company, signed in such officer's capacity as such
officer, and certifying as to the (i) certificate of incorporation and
bylaws of the Company and the Subsidiaries (ii) resolutions authorizing the
execution and delivery of the Registration Statement, this Agreement, the
U.S. Escrow Agreement and the performance of the transactions contemplated
by this Agreement and the U.S. Escrow Agreement, the Registration
Statement, the Prospectus and the U.S. Offering and (iii) incumbency of the
person or persons authorized to execute and deliver the Registration
Statement, this Agreement, the U.S. Escrow Agreement and any other
documents contemplated by the U.S. Offering.
(l) The U.S. Placement Agents shall have received on the Closing Date
certificates of the Secretaries of States (or comparable officials) where
the Company is incorporated and owns or leases property as to the good
standing of the Company, listing all charter documents on file,
qualification of the Company and the Subsidiaries to do business as a
foreign corporation, payment of taxes and filing of annual reports. The
U.S. Placement Agents shall have received copies of all charter documents
of the Company certified by the Secretary of State of the State of New
York.
(m) The U.S. Placement Agents shall have received on the Closing Date
a certificate, addressed to the U.S. Placement Agents, and dated such
Closing Date, of an executive officer of the Company to the effect that the
signer of such certificate has reviewed and understands the provisions of
Section 517.075 of the Florida Statutes, and represents that the Company
has complied, and at all times will comply, with all provisions of Section
517.075 and further, that as of such Closing Date, neither the Company nor
any of its affiliates does business with the government of Cuba or with any
person or affiliate located in Cuba.
21
<PAGE>
(n) The International Escrow Agent and the U.S. Escrow Agent shall
have on deposit the Requisite Funds.
5. Covenants of the Company. (A) The Company covenants and agrees
------------------------
as follows:
(a) The Company shall prepare the Prospectus in a form approved by the
U.S. Placement Agents and file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than five business days after the
Effective Date of the Registration Statement or any post-effective
amendment thereto, and shall promptly advise the U.S. Placement Agents (i)
when the Registration Statement shall have become effective, (ii) when any
amendment thereof shall have become effective, (iii) of any request by the
Commission for any amendment of the Registration Statement or the
Prospectus or for any additional information, (iv) of the prevention or
suspension of the use of any preliminary prospectus or the Prospectus or of
the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threatening of any proceeding for that purpose and (v) of the receipt by
the Company of any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose. The Company shall not
file any amendment of the Registration Statement or supplement to the
Prospectus unless the Company has furnished a copy to the U.S. Placement
Agents for their review prior to filing and shall not file any such
proposed amendment or supplement to which the U.S. Placement Agents
reasonably object. The Company shall use its best efforts to prevent the
issuance of any such stop order and, if issued, to obtain as soon as
possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act and the Rules, any event
occurs as a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall be
necessary to amend or supplement the Prospectus to comply with the
Securities Act or the Rules, the Company promptly shall prepare and file
with the Commission, subject to the second sentence of paragraph (a) of
this Section 5(A), an amendment or supplement which shall correct such
statement or omission or an amendment which shall effect such compliance.
(c) The Company shall make generally available to its security holders
and to the U.S. Placement Agents as soon as practicable, but not later than
45 days after the end of
22
<PAGE>
the 12-month period beginning at the end of the fiscal quarter of the
Company during which the Effective Date occurs (or 90 days if such 12-month
period coincides with the Company's fiscal year), an earnings statement
(which need not be audited) of the Company, covering such 12-month period,
which shall satisfy the provisions of Section 11(a) of the Securities Act
or Rule 158 of the Rules.
(d) The Company shall furnish to the U.S. Placement Agents and counsel
for the U.S. Placement Agents, without charge, signed copies of the
Registration Statement (including all exhibits thereto and amendments
thereof) and all amendments thereof and, so long as delivery of a
prospectus by a U.S. Placement Agent may be required by the Securities Act
or the Rules, as many copies of any preliminary prospectus and the
Prospectus and any amendments thereof and supplements thereto as the U.S.
Placement Agents may reasonably request.
(e) The Company shall cooperate with the U.S. Placement Agents and
their counsel in endeavoring to qualify the Shares for offer and sale under
the laws of such jurisdictions as the U.S. Placement Agents may designate
and shall maintain such qualifications in effect so long as required for
the distribution of the Shares; provided, however, that the Company shall
not be required in connection therewith, as a condition thereof, to qualify
as a foreign corporation or to execute a general consent to service of
process in any jurisdiction or subject itself to taxation as doing business
in any jurisdiction.
(f) For a period of five years after the date of this Agreement, the
Company shall supply to the U.S. Placement Agents copies of such financial
statements and other periodic and special reports as the Company may from
time to time distribute generally to the holders of any class of its
capital stock and furnish to the U.S. Placement Agents a copy of each
annual or other report it shall be required to file with the Commission.
(g) On or before completion of the U.S. Offering, the Company shall
make all filings required under applicable securities laws and by the
Nasdaq National Market (including any required registration under the
Exchange Act).
(B) The Company agrees to pay, or reimburse if paid by the U.S.
Placement Agents, whether or not the transactions contemplated hereby are
consummated or this Agreement is terminated, all expenses incident to the
International Offering as set forth in Section 5(B) of the International
Placement Agency Agreement and, in addition, costs and expenses of the Company
incident to the public offering of the Shares and the performance of the
obligations of the Company under this
23
<PAGE>
Agreement, including but not limited to those relating to (i) the preparation,
printing, filing and distribution of the Registration Statement including all
exhibits thereto, each preliminary prospectus, the Prospectus, all amendments
and supplements to the Registration Statement and the Prospectus; (ii) the
preparation and delivery of certificates for the Shares to the U.S. Escrow
Agent; (iii) the registration or qualification of the Shares for offer and sale
under the securities or Blue Sky laws of the various jurisdictions referred to
in Section 5(A)(e), including the fees, disbursements and other charges of
counsel for the U.S. Placement Agents in connection with such registration and
qualification and the preparation, printing, distribution and shipment of
preliminary and supplementary Blue Sky memoranda; (iv) the furnishing (including
costs of shipping and mailing) to the U.S. Placement Agents of copies of each
preliminary prospectus, the Prospectus and all amendments or supplements to the
Prospectus, and of the several documents required by this Section to be so
furnished, as may be reasonably requested for use in connection with the direct
placement of the Shares; (v) any filing fees of the National Association of
Securities Dealers, Inc. in connection with its review of the terms of the U.S.
Offering and the fees, disbursements and other charges of counsel to the U.S.
Placement Agents in connection therewith; (vi) the furnishing (including costs
of shipping and mailing) to the U.S. Placement Agents of copies of all reports
and information required by Section 5(A)(f); (vii) the fees of the U.S. Escrow
Agent; (viii) the listing of the Shares on the Nasdaq National Market and (ix)
fees, disbursements and other charges of counsel for and the independent
auditors of the Company. The Company shall reimburse the Placement Agents, on a
fully accountable basis, for all travel, legal and other out-of-pocket expenses
incurred in connection with their engagement hereunder up to a maximum of
$200,000 in the aggregate, including expenses incurred in connection with the
engagement of the International Placement Agents under the International
Placement Agency Agreement.
6. Indemnification.
----------------
(a) The Company agrees to indemnify and hold harmless each U.S.
Placement Agent and each person, if any, who controls any U.S. Placement
Agent within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act against any and all losses, claims, damages and
liabilities, joint or several (including any reasonable investigation,
legal and other expenses incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted), to
which they, or any of them, may become subject under the Securities Act,
the Exchange Act or other U.S. federal or state law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue statement or
24
<PAGE>
alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment
thereof or supplement thereto, or arise out of or are based upon 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; provided, however, that such indemnity shall not inure to the
benefit of any U.S. Placement Agent (or any person controlling such U.S.
Placement Agent) on account of any losses, claims, damages or liabilities
arising from the sale of the Shares to any person by such U.S. Placement
Agent if such untrue statement or omission or alleged untrue statement or
omission was made in such preliminary prospectus, the Registration
Statement or the Prospectus, or such amendment or supplement, in reliance
upon and in conformity with information furnished in writing to the Company
by the U.S. Placement Agent specifically for use therein. This indemnity
agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each U.S. Placement Agent agrees, severally and not jointly, to
indemnify and hold harmless the Company, each person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each director of the Company, and each
officer of the Company who signs the Registration Statement, to the same
extent as the foregoing indemnity from the Company to each U.S. Placement
Agent, but only insofar as such losses, claims, damages or liabilities
arise out of or are based upon any untrue statement or omission or alleged
untrue statement or omission which was made in any preliminary prospectus,
the Registration Statement or the Prospectus, or any amendment thereof or
supplement thereto, contained in the statements with respect to the public
offering in the United States of the Shares under the caption "Plan of
Distribution" in the Prospectus; provided, however, that the obligation of
each U.S. Placement Agent to indemnify the Company (including any
controlling person, director or officer thereof) shall be limited to the
fee received by such U.S. Placement Agent.
(c) Any party that proposes to assert the right to be indemnified
under this Section will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section, notify each such indemnifying party of the commencement of such
action, suit or proceeding, enclosing a copy of all papers served. No
indemnification provided for in Section 6(a) or 6(b) shall be available to
any party who shall fail to give notice as provided in this Section 6(c) if
the party to whom notice was not given was unaware
25
<PAGE>
of the proceeding to which such notice would have related and was
prejudiced by the failure to give such notice but the omission so to notify
such indemnifying party of any such action, suit or proceeding shall not
relieve it from any liability that it may have to any indemnified party for
contribution or otherwise than under this Section. In case any such
action, suit or proceeding shall be brought against any indemnified party
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume
the defense thereof and the approval by the indemnified party of such
counsel, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses, except as provided below and except
for the reasonable costs of investigation subsequently incurred by such
indemnified party in connection with the defense thereof. The indemnified
party shall have the right to employ its separate counsel in any such
action, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment of counsel by such
indemnified party has been authorized in writing by the indemnifying
parties, (ii) the indemnified party shall have reasonably concluded that
there may be a conflict of interest between the indemnifying parties and
the indemnified party in the conduct of the defense of such action (in
which case the indemnifying parties shall not have the right to direct the
defense of such action on behalf of the indemnified party), it being
understood that the indemnifying parties shall not be liable for the
expenses of more than one separate counsel representing the indemnified
party to such action or (iii) the indemnifying parties shall not have
employed counsel to assume the defense of such action within a reasonable
time after notice of the commencement thereof, in each of which cases the
fees and expenses of counsel shall be at the expense of the indemnifying
parties. An indemnifying party shall not be liable for any settlement of
any action, suit, proceeding or claim effected without its written consent.
7. Contribution. In order to provide for just and equitable
------------
contribution in circumstances in which the indemnification provided for in
Section 6(a) or 6(b) is due in accordance with its terms but for any reason is
held to be unavailable from the Company or the U.S. Placement Agents, as the
case may be, the Company and the U.S. Placement Agents shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other
26
<PAGE>
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting any contribution received by any person entitled hereunder to
contribution from any person who may be liable for contribution) to which the
Company and one or more of the U.S. Placement Agents may be subject in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the U.S. Placement Agents on the other from the U.S.
Offering or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 6 hereof, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company on the one hand and the U.S. Placement Agents
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the
Company and the U.S. Placement Agents shall be deemed to be in the same
proportion as (x) the total proceeds from the U.S. Offering (before deducting
Company expenses) received by the Company, as set forth in the table on the
cover page of the Prospectus, bear to the fee received by such U.S. Placement
Agent hereunder. The relative fault of the Company and the U.S. Placement
Agents shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact related to information
supplied by the Company or the U.S. Placement Agents and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the U.S. Placement Agents 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 U.S. Placement Agents were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above.
The amount paid or payable by an indemnified party as a result of the loss,
claim, liability, expense or damage, or action in respect thereof, referred to
above in this Section 7 shall be deemed to include for purposes of this Section
7 any legal or other expenses incurred by such indemnified party in connection
with investigating or defending any such action or claims. Notwithstanding the
provisions of this Section 7, in no case shall any U.S. Placement Agent be
liable or responsible for any amount in excess of the fee received by it
hereunder and 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. For purposes of this Section 7, each person, if any, who
controls a U.S. Placement Agent within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act shall have the same rights
to contribution as such U.S. Placement Agent, and each person, if any, who
controls the Company within
27
<PAGE>
the meaning of the Section 15 of the Securities Act or Section 20(a) of the
Exchange Act, each officer of the Company who shall have signed the Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, as the case may be, subject in each case to the
immediately preceding sentence of this Section 7. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section,
notify such party or parties from whom contribution may be sought, but the
omission so to notify such party or parties from whom contribution may be sought
shall not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have hereunder or otherwise than under this
Section. No party shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its written consent. The U.S.
Placement Agents' obligations to contribute pursuant to this Section 7 are
several in proportion to their respective fees and not joint.
8. Termination. This Agreement may be terminated by the U.S.
-----------
Placement Agents without liability on the part of the U.S. Placement Agents to
the Company by notifying the Company at any time if, prior to delivery and
payment for the Shares:
(a) in the absolute discretion of the U.S. Placement Agents at or
before the Closing Date (i) on or prior to such date, any domestic or
international event or act or occurrence has materially disrupted, or in
the opinion of the U.S. Placement Agents will in the future materially
disrupt, the securities markets; (ii) there has occurred any new outbreak
or material escalation of hostilities or other calamity or crisis the
effect of which on the financial markets of the United States is such as to
make it, in the judgment of the U.S. Placement Agents, inadvisable to
proceed with the offering; (iii) there shall be such a material adverse
change in general financial, political or economic conditions or the effect
of international conditions on the financial markets in the United States
is such as to make it, in the judgment of the U.S. Placement Agents,
inadvisable or impracticable to market the Shares; (iv) trading in the
Shares has been suspended by the Commission or trading generally on the New
York Stock Exchange, Inc. or on the American Stock Exchange, Inc. has been
suspended or limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for prices for
securities have been required, by said exchanges or by order of the
Commission, the National Association of Securities Dealers, Inc., or any
other governmental or regulatory authority; or (v) a banking moratorium has
been declared by any state or Federal authority, or
28
<PAGE>
(b) any of the conditions specified in Section 4 shall not have been
fulfilled when and as required by this Agreement.
The obligations of the parties under this Agreement shall be
terminated in the event that the Requisite Funds shall not have been deposited
by Investors by the close of business on the Closing Date.
9. Miscellaneous. The respective agreements, representations,
-------------
warranties, indemnities and other statements of the Company or its officers in
certificates delivered pursuant to this Agreement shall remain in full force and
effect, regardless of any investigation made by or on behalf of any U.S.
Placement Agent or any of the officers, directors or controlling persons
referred to in Sections 6 and 7 hereof, and shall survive delivery of and
payment for the Shares. The provisions of Sections 5(B), 6 and 7 shall survive
the termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the U.S.
Placement Agents and the Company and their respective successors and assigns,
and, to the extent expressed herein, for the benefit of persons controlling any
of the U.S. Placement Agents or the Company, and directors and officers of the
Company, if any, and their respective successors and assigns, and no other
person shall acquire or have any right under or by virtue of this Agreement.
The term "successors and assigns" shall not include any purchaser of Shares
merely because of such purchase.
All notices and communications hereunder shall be in writing and
mailed or delivered or by telephone or telegraph if subsequently confirmed in
writing, (a) if to the U.S. Placement Agents, c/o Oppenheimer & Co., Inc.,
Oppenheimer Tower, World Financial Center, New York, New York 10281 Attention:
Peter Crowley and (b) if to the Company, to its agent for service as such
agent's address appears on the cover page of the Registration Statement.
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
29
<PAGE>
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Very truly yours,
ALLIANCE PHARMACEUTICAL CORP.
By _____________________________
Name: Duane J. Roth
Title: Chief Executive Officer
Confirmed:
OPPENHEIMER & CO., INC.
By____________________________
Name: Peter J. Crowley
Title: Managing Director
COWEN & COMPANY
By____________________________
Name: Nancy M. Crowell
Title: Managing Director
30
<PAGE>
Schedule I
Subsidiaries
------------
Astral, Inc. (85% owned)
BioPulmonics, Inc. (100% owned)
Rosanin Corporation (100% owned)
Applications et Transfers de Technologies Advances S.A. (99% owned)
31
<PAGE>
Draft as of 4/6/95
U.S. ESCROW AGREEMENT
U.S. ESCROW AGREEMENT, dated as of April ___, 1995, by and among
Alliance Pharmaceutical Corp., a New York corporation (the "Company"),
Oppenheimer & Co., Inc., as representative (the "Representative") on behalf of
itself and Cowen & Company (each, a "U.S. Placement Agent") and Citibank, N.A.,
a national banking association incorporated under the laws of the United States
of America (the "U.S. Escrow Agent"). Capitalized terms used herein without
definition shall have the meanings assigned to them in the U.S. Placement Agency
Agreement.
WHEREAS, the Company proposes to sell an aggregate of up to 2,500,000
shares (the "Shares") of Common Stock, par value $.01 per share (the "Common
Stock") principally to institutional investors (the "U.S. Investors") within the
United States of America (the "U.S. Offering") pursuant to registration under
the Securities Act of 1933, as amended (the "Securities Act") and registration
or exemptions from registration under state securities laws [for an aggregate of
$________], all as described in the Company's registration statement on Form S-3
(Registration No. 33-58093)(together with all amendments thereof or supplements
thereto, the "Registration Statement"); and
WHEREAS, the Company concurrently proposes to sell the Shares
principally to institutional investors (the "International Investors"; together
with the U.S. Investors, the "Investors") in certain countries outside the
United States of America (the "International Offering"; together with the U.S.
Offering, the "Offerings") pursuant to the exemption from registration provided
by Regulation S under the Securities Act [for an aggregate of $ _______], all as
described in the Company's international offering memorandum (together with
amendments thereof or supplements thereto, the "International Offering
Memorandum"); and
WHEREAS, the Common Stock is being offered by the Company to Investors
whom the U.S. Placement Agents and the International Placement Agents have
introduced to the Company; and
WHEREAS, the Offerings will terminate on April 28, 1995 (the
"Termination Date") and, if subscriptions for the total number of shares of
Common Stock being offered pursuant to the Registration Statement and the
International Offering Memorandum have not been received by the Company on or
before the Termination Date, no shares of Common Stock will be sold and all
payments made by Investors will be refunded by the Escrow Agents with interest
earned thereon, if any; and
WHEREAS, with respect to all subscription payments received from U.S.
Investors, the Company proposes to establish
<PAGE>
an escrow account with the U.S. Escrow Agent at the office of its Escrow
Administration, 63 Broadway, New York, New York 10004.
NOW THEREFORE, it is agreed as follows:
1. Establishment of Escrow. The U.S. Escrow Agent hereby agrees to
-----------------------
receive and disburse the proceeds from the U.S. Offering and any interest earned
thereon in accordance herewith.
2. Deposit of Escrowed Property. The Representative shall, on
----------------------------
behalf of the U.S. Investors, from time to time, but in no event later than
12:00 noon on the date preceding the Closing Date, cause each U.S. Investor to
wire or deposit with the U.S. Escrow Agent funds or checks of the U.S. Investor
delivered in payment for Common Stock (the "Escrowed Property"). Any checks
delivered to the U.S. Escrow Agent pursuant to the terms hereof shall be made
payable to or endorsed to the order of the U.S. Escrow Agent. The U.S. Escrow
Agent upon receipt of such checks shall present such checks for payment to the
drawee-bank under such checks. Any checks not honored by the drawee-bank
thereunder after the first presentment for payment shall be returned to the
Representative, on behalf of such U.S. Investor, in the same manner notices are
delivered pursuant to Section 6. Upon receipt of funds or checks from a U.S.
Investor, the U.S. Escrow Agent shall credit such funds and the amount of such
checks to a non-interest-bearing account (the "U.S. Escrow Account") held by the
U.S. Escrow Agent. If, following the credit of the amount of any check to the
U.S. Escrow Account, such check is dishonored, the U.S. Escrow Agent shall, if
the amount of such dishonored check had been invested pursuant to Section 3,
liquidate such investments to the extent of such amount and debit the U.S.
Escrow Account for the same amount plus, if any, the amount of interest and
other income earned on any investment made in the amount of such dishonored
check.
3. Investment of Escrowed Property. The U.S. Escrow Agent, on the
-------------------------------
second business day ("business day" defined for purposes of this U.S. Escrow
Agreement as any day which is not a Saturday, a Sunday or a day on which banks
or trust companies in the City and State of New York are authorized or obligated
by law, regulation or executive order to remain closed) succeeding the credit of
any subscription proceeds to the U.S. Escrow Account pursuant to Section 2
(unless such deposit is made in federal or other immediately available or "same
day" funds, in which case, on the next succeeding business day), shall deposit
such proceeds in a Citibank, N.A. Money Market Deposit Account, pursuant to Rule
15c2-4 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended, in accordance with the terms set
forth on Exhibit A attached hereto and made a part hereof. Such proceeds shall
remain in the Citibank, N.A. Money Market Deposit Account until they are
released in accordance with the terms hereof. In no event shall the U.S. Escrow
Agent be liable for any loss
2
<PAGE>
resulting from any change in interest rates applicable to proceeds invested
pursuant to this Section. Interest on proceeds invested pursuant to this
Section shall accrue from the date of investment of such proceeds until the
termination of such investment pursuant to the terms hereof and shall be paid as
set forth in Section 5.
4. List of U.S. Investors. The Representative shall furnish or
----------------------
cause to be furnished to the U.S. Escrow Agent, at the time of each deposit of
funds or checks pursuant to Section 2, a list, substantially in the form of
Exhibit B hereto, containing, with respect to each U.S. Investor whose funds are
being deposited, its name, address and social security or taxpayer
identification number, if applicable, the number of Shares for which it has
subscribed and the subscription amount it has delivered to the U.S. Escrow
Agent, and to which is attached a completed W-9 form [(or, in the case of any
U.S. Investor who is not a United States citizen or resident, a W-8 form)] for
each listed U.S. Investor. The U.S. Escrow Agent shall notify the
Representative and the Company of any discrepancy between the subscription
amounts set forth on any list delivered pursuant to this Section 4 and the
subscription amounts received by the U.S. Escrow Agent. The U.S. Escrow Agent
is authorized to revise such list to reflect the actual subscription amounts
received and the release of any subscription amounts pursuant to Section 5.
5. Withdrawal of Subscription Amounts. (a) If the U.S. Escrow
----------------------------------
Agent shall receive a notice, substantially in the form of Exhibit C hereto (an
"Offering Termination Notice"), from the Company, the U.S. Escrow Agent shall
(i) promptly after receipt of such Offering Termination Notice and the clearance
of all checks received by the U.S. Escrow Agent as Escrowed Property, liquidate
any investments that shall have been made pursuant to Section 3 and send to each
U.S. Investor listed on the list held by the U.S. Escrow Agent pursuant to
Section 4 whose total subscription amount shall not have been released pursuant
to paragraph (b) or (c) of this Section 5, in the manner set forth in paragraph
(e) of this Section 5, a check to the order of such U.S. Investor in the amount
of the remaining subscription amount held by the U.S. Escrow Agent as set forth
on such list held by the U.S. Escrow Agent, and (ii) promptly after the fourth
business day of the month immediately following the month in which the
investments made pursuant to Section 3 were terminated pursuant to this
paragraph, send, in the manner set forth in paragraph (e) of this Section 5, a
check to the order of each such U.S. Investor in the amount of interest and
other income earned and not yet paid with respect to any investment of such U.S.
Investor's funds. The U.S. Escrow Agent shall notify the Company and the
Representative of the distribution of such funds to the U.S. Investors.
3
<PAGE>
(b) In the event that (i) the Common Stock has been subscribed for and
funds in respect thereof shall have been deposited with the U.S. Escrow Agent on
or before the Termination Date and (ii) no Offering Termination Notice shall
have been delivered to the U.S. Escrow Agent, the Company and the Representative
shall deliver to the U.S. Escrow Agent a joint notice, substantially in the form
of Exhibit D hereto (a "Closing Notice"), designating the date on which the
Common Stock is to be sold and delivered to the U.S. Investors thereof (the
"Closing Date"), which date shall not be earlier than the clearance of any
checks received by the U.S. Escrow Agent as Escrowed Property, the proceeds of
which are to be distributed on such Closing Date, and identifying the U.S.
Investors and the number of shares of Common Stock to be sold to each thereof on
such Closing Date, not less than two (2) nor more than five (5) business days
prior to such Closing Date. The U.S. Escrow Agent, after receipt of such
Closing Notice and the clearance of such checks:
(i) on or prior to the Closing Date identified in such Closing
Notice, shall liquidate any investments that shall have been made pursuant
to Section 3 to the extent of the subscription amount to be distributed
pursuant to the immediately succeeding clause (ii);
(ii) on such Closing Date, pay to the Company and the U.S.
Placement Agents, in federal or other immediately available funds and
otherwise in the manner specified by the Company in such Closing Notice, an
amount equal to the aggregate of the subscription amounts paid by the U.S.
Investors identified in such Closing Notice for the Common Stock to be sold
on such Closing Date as set forth on the list held by the U.S. Escrow Agent
pursuant to Section 4; and
(iii) promptly after the fourth business day of the month
immediately following the month in which the investments made pursuant to
Section 3 were terminated pursuant to such Closing Notice, shall send, in
the manner set forth in paragraph (e) of this Section 5, a check to the
order of each U.S. Investor identified in such Closing Notice in the amount
of interest and other income earned and not yet paid with respect to any
investment of each such U.S. Investor's funds distributed on such Closing
Date. At the time of such transfer, the U.S. Escrow Agent shall identify
in writing to the Company and the U.S. Placement Agent the amount of the
interest earned for the account of each U.S. Investor and the date such
subscription was received.
(c) If at any time and from time to time prior to the release from
escrow of any U.S. Investor's total subscription amount pursuant to paragraph
(a) or (b) of this
4
<PAGE>
Section 5, the Company shall deliver to the U.S. Escrow Agent a notice,
substantially in the form of Exhibit E hereto (a "Subscription Termination
Notice"), to the effect that any or all of the subscriptions of such U.S.
Investor have been rejected by the Company (a "Rejected Subscription"), the U.S.
Escrow Agent (i) promptly after receipt of such Subscription Termination Notice
and, if such U.S. Investor delivered a check in payment of its Rejected
Subscription, after the clearance of such check, shall liquidate, to the extent
of the sum of such U.S. Investor's Rejected Subscription amount as set forth in
the Subscription Termination Notice, any investments that shall have been made
pursuant to Section 3 and send to such U.S. Investor, in the manner set forth in
paragraph (e) of this Section 5, a check to the order of such U.S. Investor in
the amount of such Rejected Subscription amount, and (ii) promptly after the
fourth business day of the month immediately following the month in which the
investments made pursuant to Section 3 were terminated pursuant to this
paragraph, shall send to such U.S. Investor, in the manner set forth in
paragraph (e) of this Section 5, a check to the order of such U.S. Investor in
the amount of interest and other income earned and not yet paid with respect to
any investment of such U.S. Investor's Rejected Subscription amount. At the
time of such transfer, the U.S. Escrow Agent shall identify in writing to the
Company and the Representative the amount of the interest earned for the account
of each U.S. Investor and the date such subscription was received.
(d) On a date following the transfer of any interest earned for the
account of each U.S. Investor pursuant to Section 5(a), (b) or (c), but not
later than January 31, 1996, the U.S. Escrow Agent shall provide each U.S.
Investor with tax form 1099 setting forth the amount of such interest.
(e) For the purposes of this Section 5, any check that the U.S. Escrow
Agent shall be required to send to any U.S. Investor shall be sent to such U.S.
Investor by first class mail, postage prepaid, at such U.S. Investor's address
furnished to the U.S. Escrow Agent pursuant to Section 4.
6. Notices. Any notice or other communication required or permitted
-------
to be given hereunder shall be in writing and shall be (a) delivered by hand or
(b) sent by mail, registered or certified, with proper postage prepaid, and
addressed as follows:
if to the Company, to:
Alliance Pharmaceutical Corp.
3040 Science Park Road
San Diego, California 92121
Attention: Lloyd Rowland, Esq.
5
<PAGE>
with a copy to:
Stroock & Stroock & Lavan
7 Hanover Square
New York, New York 10004
Attn: Melvin Epstein, Esq.
if to the Representative, to:
Oppenheimer & Co., Inc.
World Financial Center
New York, New York 10281
Attention: Peter Crowley
with a copy to:
Morgan, Lewis & Bockius
101 Park Avenue
45th Floor
New York, New York 10178
Attention: Stephanie W. Abramson, Esq.
if to the U.S. Escrow Agent, to:
Citibank, N.A.
Corporate Trust
Escrow Administration
120 Wall Street, l3th Fl.
New York, New York 10043
Attention: Mr. Bryan Gartenberg
or to such other address as the person to whom notice is to be given may have
previously furnished to the others in the above-referenced manner. All such
notices and communications, if mailed, shall be effective when deposited in the
mails, except that notices and communications to the U.S. Escrow Agent and
notices of changes of address shall not be effective until received.
7. Concerning the U.S. Escrow Agent. To induce the U.S. Escrow
--------------------------------
Agent to act hereunder, it is further agreed by the Company and the
Representative that:
(a) The U.S. Escrow Agent shall not be under any duty to give the
Escrowed Property held by it hereunder any greater degree of care than it gives
its own similar property and shall not be required to invest any funds held
hereunder except as directed in this U.S. Escrow Agreement. Uninvested funds
held hereunder shall not earn or accrue interest.
6
<PAGE>
(b) This U.S. Escrow Agreement expressly sets forth all of the duties
of the U.S. Escrow Agent with respect to any and all matters pertinent hereto.
No implied duties or obligations shall be read into this U.S. Escrow Agreement
against the U.S. Escrow Agent. The U.S. Escrow Agent shall not be bound by the
provisions of any agreement among the other parties hereto except this U.S.
Escrow Agreement.
(c) The U.S. Escrow Agent shall not be liable, except for its own
negligence or willful misconduct and, except with respect to claims based upon
such negligence or willful misconduct that are successfully asserted against the
U.S. Escrow Agent, the other parties hereto shall jointly and severally
indemnify and hold harmless the U.S. Escrow Agent (and any successor U.S. Escrow
Agent) from and against any and all losses, liabilities, claims, actions,
damages and expenses, including reasonable attorneys' fees and disbursements,
arising out of and in connection with this U.S. Escrow Agreement. Without
limiting the foregoing, the U.S. Escrow Agent shall in no event be liable in
connection with its investment or reinvestment of any cash held by it hereunder
in good faith, in accordance with the terms hereof, including without limitation
any liability for any delays (not resulting from gross negligence or willful
misconduct) in the investment or reinvestment of the Escrowed Property, or any
loss of interest incident to any such delays.
(d) The U.S. Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing delivered
to it hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. The U.S. Escrow Agent may act in reliance upon any instrument
or signature believed by it in good faith to be genuine and may assume, if in
good faith, that any person purporting to give notice or receipt or advice or
make any statement or execute any document in connection with the provisions
hereof has been duly authorized to do so.
(e) The U.S. Escrow Agent may act pursuant to the advice of counsel
with respect to any matter relating to this U.S. Escrow Agreement and shall not
be liable for any action taken or omitted in good faith and in accordance with
such advice.
(f) The U.S. Escrow Agent does not have any interest in the Escrowed
Property deposited hereunder but is serving as escrow holder only. Any payments
of income from the U.S. Escrow Account shall be subject to withholding
regulations then in force with respect to United States taxes. The parties
hereto will provide the U.S. Escrow Agent with appropriate W-9 forms for tax
I.D., number certification, or non-resident alien certifications.
7
<PAGE>
This paragraph (f) and paragraph (c) of this Section 7 shall survive
notwithstanding any termination of this U.S. Escrow Agreement or the resignation
of the U.S. Escrow Agent.
(g) The U.S. Escrow Agent makes no representation as to the validity,
value, genuineness or the collectability of any security or other documents or
instrument held by or delivered to it.
(h) The U.S. Escrow Agent shall not be called upon to advise any party
as to the wisdom in selling or retaining or taking or refraining from any action
with respect to any securities or other property deposited hereunder.
(i) The U.S. Escrow Agent (and any successor escrow agent) at any time
may be discharged from its duties and obligations hereunder by the delivery to
it of notice of termination signed by both the Company and the Representative or
at any time may resign by giving written notice to such effect to the Company
and the Representative. Upon any such termination or resignation, the U.S.
Escrow Agent shall deliver the Escrowed Property to any successor escrow agent
jointly designated by the other parties hereto in writing, or to any court of
competent jurisdiction if no such successor escrow agent is agreed upon,
whereupon the U.S. Escrow Agent shall be discharged of and from any and all
further obligations arising in connection with this U.S. Escrow Agreement. The
termination or resignation of the U.S. Escrow Agent shall take effect on the
earlier of (i) the appointment of a successor (including a court of competent
jurisdiction) or (ii) the day that is 30 days after the date of delivery (A) to
the U.S. Escrow Agent of the other parties' notice of termination or (B) to the
other parties hereto of the U.S. Escrow Agent's written notice of resignation.
If at that time the U.S. Escrow Agent has not received a designation of a
successor escrow agent, the U.S. Escrow Agent's sole responsibility thereafter
shall be to keep the Escrowed Property safe until receipt of a designation of
successor escrow agent or a joint written disposition instruction by the other
parties hereto or any enforceable order of a court of competent jurisdiction.
(j) The U.S. Escrow Agent shall have no responsibility for the
contents of any writing of any third party contemplated herein as a means to
resolve disputes and may rely without any liability upon the contents thereof.
(k) In the event of any disagreement among or between the other
parties hereto and/or the U.S. Investors resulting in adverse claims or demands
being made in connection with the Escrowed Property, or in the event that the
U.S. Escrow Agent in good faith is in doubt as to what action it should take
hereunder, the U.S. Escrow Agent shall be entitled to retain the Escrowed
Property until the U.S. Escrow Agent shall have
8
<PAGE>
received (i) a final and non-appealable order of a court of competent
jurisdiction directing delivery of the Escrowed Property or (ii) a written
agreement executed by the other parties hereto and consented to by the U.S.
Investors directing delivery of the Escrowed Property, in which event the U.S.
Escrow Agent shall disburse the Escrowed Property in accordance with such order
or agreement. Any court order referred to in (i) above shall be accompanied by
a legal opinion of counsel for the presenting party satisfactory to the U.S.
Escrow Agent to the effect that said court order is final and non-appealable.
The U.S. Escrow Agent shall act on such court order and legal opinion without
further question.
(l) As consideration for the U.S. Escrow Agent's agreement to act as
escrow agent as herein described, the Company agrees to pay the U.S. Escrow
Agent fees determined in accordance with the terms set forth on Exhibit F
attached hereto and made a part hereof. In addition, the Company agrees to
reimburse the U.S. Escrow Agent for all reasonable expenses, disbursements and
advances incurred or made by the U.S. Escrow Agent in performance of its duties
hereunder (including reasonable fees, expenses and disbursements of its
counsel).
(m) The parties hereto irrevocably (i) submit to the jurisdiction of
any New York State or federal court sitting in New York City in any action or
proceeding arising out of or relating to this U.S. Escrow Agreement, (ii) agree
that all claims with respect to such action or proceeding shall be heard and
determined in such New York State or federal court and (iii) waive, to the
fullest extent permitted by law, the defense of an inconvenient forum. The
parties hereby consent to and grant any such court jurisdiction over the persons
of such parties and such parties and over the subject matter of any such dispute
and agree that delivery or mailing of process or other papers in connection with
any such action or proceeding in the manner provided hereinabove, or in such
other manner as may be permitted by law, shall be valid and sufficient service
thereof.
(n) No printed or other matter in any language (including, without
limitation, the Registration Statement, notices, reports and promotional
material) which mentions the U.S. Escrow Agent's name or the rights, powers, or
duties of the U.S. Escrow Agent shall be issued by the other parties hereto or
on such parties' behalf unless the U.S. Escrow Agent shall first have given its
specific written consent thereto. The U.S. Escrow Agent hereby consents to the
use of its name and the reference to the escrow arrangement in the Registration
Statement and International Offering Memorandum.
9
<PAGE>
8. Miscellaneous.
-------------
(a) This U.S. Escrow Agreement shall be binding upon and inure solely
to the benefit of the parties hereto and their respective successors and
assigns, heirs, administrators and representatives, and the U.S. Investors and
shall not be enforceable by or inure to the benefit of any other third party
except as provided in paragraph (i) of Section 7 with respect to the termination
of, or resignation by, the U.S. Escrow Agent. No party may assign any of its
rights or obligations under this U.S. Escrow Agreement without the written
consent of the other parties.
(b) This U.S. Escrow Agreement shall be construed in accordance with
and governed by the internal laws of the State of New York (without reference to
its rules as to conflicts of law).
(c) This U.S. Escrow Agreement may be modified only by a writing
signed by all of the parties hereto and consented to by the U.S. Investors
adversely affected by such modifications. No waiver hereunder shall be
effective unless in a writing signed by the party to be charged.
(d) This U.S. Escrow Agreement shall terminate upon the payment
pursuant to Section 5 of all amounts held in the U.S. Escrow Account.
(e) The section headings herein are for convenience of reference only
and shall not affect the construction thereof. Unless otherwise indicated,
references to Sections are to Sections contained herein.
(f) This U.S. Escrow Agreement may be executed in one or more
counterparts each of which shall constitute an original but all such separate
counterparts shall together constitute one and the same instrument.
10
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this U.S. Escrow
Agreement to be executed as of the day and year first above written.
ALLIANCE PHARMACEUTICAL CORP.
By: ______________________________
Name:
Title:
OPPENHEIMER & CO., INC.
COWEN & COMPANY
BY: Oppenheimer & Co., Inc., as
Representative of the U.S. Placement Agents
By: ______________________________
Name:
Title:
CITIBANK, N.A.
By: ______________________________
Name:
Title:
11
<PAGE>
EXHIBIT A
Citibank, N.A. Insured Money Market Deposit Accounts
Deposits/Withdrawals may be made to the Citibank, N.A. Money Market
Deposit Account ("MMDA") established under the U.S. Escrow Agreement to which
this Exhibit is attached only through the U.S. Escrow Account. All transaction
and balance reporting of the MMDA will be included as part of the U.S. Escrow
Account Statement. Activity in the MMDA will be reflected as the equivalent of
dollars on deposit in a Citibank, N.A. Money Market Deposit Account.
Deposits/Withdrawals to the MMDA will be made only as permitted by the U.S.
Escrow Agreement to which this Exhibit is attached. The MMDA has certain
regulatory restrictions as well as some minimum requirements:
1. By regulation, Citibank, N.A. is required to reserve the right to
require seven days' prior notice of any withdrawals of funds from an account;
provided, however, that, if Citibank, N.A. elects to exercise its right to
require seven days' prior notice, it shall exercise such right as to all such
accounts established.
2. A daily balance of $10,000 must be maintained on deposit in the
MMDA. If the MMDA should fall below $10,000 on any day, Citibank, N.A. will be
authorized to transfer the remaining balance to the U.S. Escrow Account.
3. Rates will be determined by Citibank, N.A. and can be determined
by calling your custody account officer.
4. Balances up to $100,000 (total on deposit at Citibank, N.A.) are
FDIC-insured.
A-1
<PAGE>
EXHIBIT B
SUMMARY OF CASH RECEIVED
NEW PARTICIPANT DEPOSIT
<TABLE>
<CAPTION>
Date: _______________________________
Deposit Date: List Number: ________________________
Investment Date: Page ____ of ________________________
Batch Number: Approved By: ________________________
JOB#: _______________________________
For Bank use only
TITLE: _______________________________________________________
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------
NUMBER OF TAX ID NO./ FOR BANK
NAME DEPOSIT SHARES ADDRESS SOC.SEC. NO. USE ONLY
- --------------------------------------------------------------------------------------------------------------------
TAX CODE
EXEMPT(Y/N)
W-9(YR) NRA
W-8(YR)
1008(87)
- --------------------------------------------------------------------------------------------------------------------
Broker Misc. Misc. II Misc. III TAX CODE
EXEMPT(Y/N)
W-2(YR) NRS
W-8(YR)
1008(87)
- --------------------------------------------------------------------------------------------------------------------
Broker Misc. Misc. II Misc. III TAX CODE
EXEMPT(Y/N)
W-2(YR) NRS
W-8(YR)
1008(87)
- --------------------------------------------------------------------------------------------------------------------
Broker Misc. Misc. II Misc. III TAX CODE
EXEMPT(Y/N)
W-2(YR) NRS
W-8(YR)
1000(87)
- --------------------------------------------------------------------------------------------------------------------
Broker Misc. Misc. II Misc. III
</TABLE>
B-1
<PAGE>
EXHIBIT C
[Form of Offering Termination Notice]
Citibank, N.A.
Corporate Trust
Escrow Administration
120 Wall Street, l3th Fl.
New York, New York 10043
Attention: Mr. Bryan Gartenberg
Dear Mr. Gartenberg:
Pursuant to Section 5(a) of the U.S. Escrow Agreement dated as of April
__, 1995 among Alliance Pharmaceutical Corp. (the "Company"), Oppenheimer & Co.,
Inc. and you, the Company hereby notifies you of the termination of the
Offerings and directs you to make payments to U.S. Investors as provided for in
Section 5(a) of the U.S. Escrow Agreement.
Very truly yours,
ALLIANCE PHARMACEUTICAL CORP.
By: _______________________________
Name:
Title:
C-1
<PAGE>
EXHIBIT D
[Form of Closing Notice]
__________ __, 1995
Citibank, N.A.
Corporate Trust
Escrow Administration
120 Wall Street, l3th Fl.
New York, New York 10043
Attention: Mr. Bryan Gartenberg
Dear Mr. Gartenberg:
Pursuant to Section 5(b) of the U.S. Escrow Agreement dated as of __________
__, 1995, (the "U.S. Escrow Agreement") among Alliance Pharmaceutical Corp. (the
"Company"), Oppenheimer & Co., Inc. and you, the Company hereby certifies that
it has received subscriptions for all the shares of Common Stock and the Company
will sell and deliver the Common Stock to the U.S. Investors thereof at a
closing to be held on __________ __, 1995 (the "Closing Date"). The names of
the U.S. Investors concerned, the number of shares subscribed for by each of
such U.S. Investors and the related subscription amounts are set forth on
Schedule I annexed hereto.
Please accept these instructions as standing instructions for the closing to
be held on the Closing Date. The parties hereto certify that they do not wish
to have a call back regarding these instructions.
We hereby request that the aggregate subscription
amount be paid to the U.S. Placement Agents and us as follows:
1. To the Company, $________________;
2. To Oppenheimer & Co., Inc., on behalf of the U.S. Placement
Agents, $_______________; and
3. To the U.S. Escrow Agent, $______________.
D-1
<PAGE>
These instructions may be executed in any number of counterparts, each of
which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
Very truly yours,
ALLIANCE PHARMACEUTICAL CORP.
By: _____________________________
Name:
Title:
OPPENHEIMER & CO., INC.
By: ______________________________
Name:
Title:
D-2
<PAGE>
SCHEDULE I
----------
Name of U.S. Number of Subscription
Investor Shares Amount
- ------------ --------- ------------
<PAGE>
EXHIBIT E
[Form of Subscription Termination Notice]
Citibank, N.A.
Corporate Trust
Escrow Administration
120 Wall Street, l3th Fl.
New York, New York 10043
Attention: Mr. Bryan Gartenberg
Dear Mr. Gartenberg:
Pursuant to Section 5(c) of the U.S. Escrow Agreement dated as of
__________ __, 1995 among Alliance Pharmaceutical Corp. (the "Company"),
Oppenheimer & Co., Inc. and you, the Company hereby notifies you that the
following subscription(s) have been rejected:
Amount of Dollar
Subscribed Amount of
Name of U.S. Shares Rejected
Investor Rejected Subscription
- ------------ ---------- ------------
Very truly yours,
ALLIANCE PHARMACEUTICAL CORP.
By: ____________________________
Name:
Title:
E-1
<PAGE>
EXHIBIT F
A. A fee of $5,000 representing a minimum administration fee shall be paid upon
execution of the U.S. Escrow Agreement to which this Exhibit is attached.
B. A fee equal to:
(1) 10 Basis Points or the first $5,000,000 of any part thereof,
(2) 6 Basis Points on the next $5,000,000
(3) 3 Basis Points on the next $90,000,000
(4) 1/2 Basis Points on amount over $100,000,000 or Escrowed Property
received by the U.S. Escrow Agent prior to the Closing Date pursuant to
the terms of the Offerings. The initial fee paid at the time of
execution will be deducted from the Escrow Administration fee as
calculated pursuant to the above schedule.
C. A fee for record-keeping equal to the following:
(1) $4.00 for each check issued by the U.S. Escrow Agent
(2) $9.00 for each participant (hard copy input of
U.S. Investor information) and
(3) $2.00 for each 1099 form issued
(4) $5.00 for each interest calculation
(5) $20.00 for each cancellation, correction or withdrawal of Escrowed
Property made by the U.S. Escrow Agent pursuant to Section 6(d) of the
U.S. Escrow Agreement to which this Exhibit is attached shall be paid
when billed by the U.S. Escrow Agent.
Capitalized terms not otherwise defined shall have the meanings subscribed
thereto in the U.S. Escrow Agreement to which this Exhibit is attached.
F-1
