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Exhibit 1
18 September 2000
Dr. T. J. Williams
Chief Executive Officer
Photogen Technologies, Inc
7327 Oak Ridge Highway
Knoxville, TN 37931
USA
Dear Dr. Williams,
The purpose of this letter agreement (the "Agreement") is to set forth
the terms and conditions pursuant to which Rochelle S.A. ("Rochelle") shall
serve as exclusive placement agent in connection with the proposed offering
(the "Offering") of equity securities (the "Securities") of Photogen
Technologies, Inc. (the "Company") pursuant to a registration statement. The
gross proceeds from the Offering will be up to U.S. Dollars $40,000,000. All
references to dollars shall be to U.S. dollars. The terms of such offering
and the Securities shall be as agreed to between the Company, Rochelle and
the purchasers thereof.
Upon the terms and subject to the conditions of this Agreement, the
Parties hereto agree as follows:
1. APPOINTMENT
(a) Subject to the terms and conditions of this Agreement hereinafter set
forth, the Company hereby retains Rochelle, and Rochelle hereby agrees
to act as the Company's exclusive placement agent and financial
advisor in connection with the Offering, effective as of the date
hereof. The Company expressly acknowledges and agrees that Rochelle's
obligations hereunder are on a reasonable best efforts basis only and
that the execution of this Agreement does not constitute a commitment
by Rochelle to purchase the Securities and does not ensure the
successful placement of the Securities or any portion thereof or the
success of Rochelle with respect to securing any other financing on
behalf of the Company. Rochelle shall not commence any selling
efforts until the registration statement has been declared effective
by the SEC.
(b) Except as set forth below in this Section 1 or Exhibit D hereto,
during the effectiveness of this Agreement neither the Company nor any
of its subsidiaries or affiliates shall directly or indirectly,
through any officer, director, employee, agent or otherwise (including
without limitation, through any placement agent, broker, investment
banker, attorney or accountant retained by the Company or any of it's
subsidiaries or affiliates) solicit, initiate or encourage the
submission of any proposal or offer (an "Investment Proposal") from
any person or entity (including any of such person's or entity's
officers, directors, employees, agents and other representatives)
relating to any issuances of the Company's or any of it's
subsidiaries' equity securities (including debt securities with any
equity
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feature) or relating to any other transaction having a similar
effect or result on the Company's or any of its subsidiaries'
capitalization or participate in any discussions or negotiations
regarding, or furnish to any other person or entity any information
with respect to or otherwise cooperate in any way with, or assist or
participate in, facilitate or encourage any effort or attempt by any
other person or entity to do or seek to do any of the foregoing. The
Company shall immediately cease and cause to be terminated any and all
contacts, discussions and negotiations with third parties relating to
any Investment Proposal. The Company shall not provide or release any
information with respect to this Agreement or the Offering except as
required by law.
(c) Notwithstanding anything to the contrary contained herein, in the
event that Rochelle shall not provide to the Company, if so requested,
within five months after the effective date of the registration
statement one or more investors willing to invest in the aggregate at
least $5,000,000 in the Offering and a minimum $1,000,000 per month
each and every month thereafter during the term of this Agreement on
substantially the same terms as agreed to between the Company,
Rochelle and investors, Rochelle shall become a non-exclusive
placement agent and the Company shall have the right to either
terminate this Agreement without liability to Rochelle or solicit and
pursue other Investment Proposals for the balance of the unsold
Securities under said registration statement, PROVIDED THAT, any such
Investment Proposal shall be subject to Rochelle's right of first
refusal under Section 4 hereof.
(d) The obligations of the parties hereto are subject to the disclosures
in Exhibit D hereto.
2. FEES AND COMPENSATION
(a) In consideration of the services rendered by Rochelle in connection
with the Offering, the Company agrees to pay Rochelle the following
fees and other compensation: (i) a fee payable upon the initial and
each subsequent closing of the sale of Securities pursuant to the said
registration statement equal to 5% of the gross proceeds to the
Company at each such closing, and (ii) $35,000 non-accountable expense
allowance payable upon the engagement of Rochelle by the Company
hereunder.
(b) All fees payable hereunder shall be paid to Rochelle out of an
attorney escrow account at the closing or by such other means
acceptable to Rochelle. Should Rochelle provide an investor acceptable
to the Company and such investor is willing to invest on substantially
the same terms as agreed to between the Company, Rochelle and such
investor hereunder, and the Company were to terminate this Agreement
before the earlier of: (i) the funding of $40 million, (ii) September
18, 2001 (the "Termination Date"'), for reasons other than (A) a
breach of this Agreement by Rochelle, or (B) pursuant to the
provisions of
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Section 1(c) hereof, the Company will pay $150,000 to Rochelle as a
"breakup fee".
3. TERMS OF RETENTION
(a) Unless extended or terminated in writing by the parties hereto in
accordance with the provisions hereof, this Agreement shall remain in
effect until the earlier of the Termination Date of September 18, 2001
or the funding of $40 million hereunder.
(b) Notwithstanding anything herein to the contrary the obligation to pay
the Fees and Compensation and Expenses described in Section 2, if any,
and the obligations set forth in paragraphs 2, 6 and 8 of Exhibit A
and all of Exhibits B, C and D attached hereto, each of which exhibits
is incorporated herein by reference, shall survive any termination or
expiration of this Agreement. It is expressly understood and agreed by
the parties hereto that any private financing of equity or debt or
other capital raising activity of the Company within 24 months of the
termination or expiration of this Agreement, with any investor who
makes an investment hereunder shall result in fees and compensation
being due and payable by the Company to Rochelle under the same terms
of section 2 above.
4. RIGHT OF FIRST REFUSAL
Upon completion of the Offering (I.E., full funding of the $40 million),
Rochelle shall have an irrevocable right of first refusal for a period of
one year to provide all financing arrangements for the Company (other than
conventional banking arrangements, borrowing and commercial debt financing
and discrete unrelated transactions of not more than $250,000 where no
investment banking or similar fee is being paid). Rochelle shall exercise
such right in writing within five (5) business days of receipt of a written
term sheet describing such proposed transaction in reasonable detail and
Rochelle shall close that transaction forthwith on the same terms of said
term sheet. The right of first refusal shall not apply to (i) an
underwritten public offering conducted by a nationally recognized
investment banking firm, (ii) the acquisition by the Company of an entity
or any property (including the assumption of liabilities) by merger or
otherwise through the use of cash or Securities of the Company, or (iii)
any non-convertible debt financing, leasing or bank lines of credit,
including incidental warrants. Failure to exercise a right of first
refusal on any one occasion shall not eliminate this right on future
occasions.
5. INFORMATION.
The Company recognizes and confirms that in completing its engagement
hereunder, Rochelle will be using and relying on information filed by the
Company with the Securities and Exchange Commission and on data, material
and other information furnished to Rochelle by the Company or the Company's
affiliates and agents. It is understood and agreed that in performing under
this engagement, Rochelle will rely upon the accuracy and completeness of,
and is not assuming any responsibility for
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independent verification of such publicly available information and the
other information so furnished. Notwithstanding the foregoing, It is
understood that Rochelle will conduct a due diligence investigation of the
Company and the Company will cooperate in all respects with such
investigation as a condition of Rochelle's obligations hereunder.
6. REGISTRATION.
Promptly following execution of this Agreement, the Company shall prepare
and file with the U.S. Securities and Exchange Commission, a registration
statement with respect to the Offering. From time to time in connection
with any particular sale of Securities, the Company will, at its own
expense file for and use its reasonable best efforts to obtain any
registration or qualification required to sell any Securities under the
Blue Sky laws of any applicable jurisdictions, as reasonably requested by
Rochelle.
7. NO GENERAL SOLICITATION.
The Securities will be offered only by approaching prospective purchasers
and investors on an individual basis. No general solicitation or general
advertising in any form will be used in connection with the Offering of the
Securities. From and after the filing of the registration statement the
Company and Rochelle shall each pre-clear any proposed press release with
the other prior to releasing the same.
8. CLOSING.
The closing of the sale of the Securities shall be subject to customary
closing conditions, including the provision at closing by the Company of
officers' certificates, opinion of counsel and "cold comfort" letters from
the Company's auditors.
9. ROCHELLE.
Rochelle is a corporation organized under the laws of Nevis with its
principal office located in London, England. Rochelle is not a registered
broker/dealer under the laws of the United States or any state thereof.
Accordingly, it will act as placement agent regarding the Securities of the
Offering in jurisdictions outside of the United States and then only in
compliance with all applicable securities and other laws.
10. MISCELLANEOUS
This Agreement together with the attached Exhibits A through D constitutes
the entire understanding and agreement between the parties with respect to
its subject matter and therefore no agreements or understandings with
respect to the subject matter hereof which are not contained in this
Agreement are effective. This Agreement may be modified only in a writing
signed by the parties hereto, subsequent to the date hereof. This
Agreement may be executed in one or more counterparts, each of which shall
be deemed an original but all of which together will constitute one and the
same instrument. In addition, signatures delivered by facsimile shall be
effective and binding upon the parties upon transmission by facsimile and
confirmation of receipt.
If the foregoing correctly sets forth our agreement, please confirm this by
signing and returning to us the duplicate of this letter.
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We appreciate this opportunity to be of service and are looking forward to
working with you on this matter.
Very truly yours
Rochelle S.A.
By: /s/ J.E. Martin for Dungate Ltd. - Director of
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Rochelle S.A.
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Name: J.E. Martin for Dungate Ltd.
Title: Corporate Director
Agreed and accepted
as of the date first written above
By Photogen Technologies, Inc.
By: /s/ Taffy J. Williams
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Name: Taffy J. Williams, Ph.D.
Title: President and Chief Executive Officer
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EXHIBIT A
STANDARD TERMS AND CONDITIONS
1. The Company shall promptly provide Rochelle with all material information
about the Company which information shall be accurate in all material
respects at the time furnished.
2. Rochelle shall keep all information obtained from the Company strictly
confidential except (a) information which is otherwise publicly available
or previously known to, or obtained by Rochelle independently of the
Company and without breach of Rochelle's agreement with the Company; (b)
Rochelle may disclose such information to its employees and attorneys and
to its other advisors and financial sources on a need to know basis only
and shall ensure that all such employees, attorneys advisors and financial
sources will keep such information strictly confidential; and (c) pursuant
to any order of a court of competent jurisdiction or other governmental
body or as may otherwise be required by law (and Rochelle shall advise the
Company of any such order or requirement and cooperate in the Company's
efforts to obtain confidential treatment).
3. The Company recognizes that in order for Rochelle to perform properly its
obligations in a professional manner, it is necessary that Rochelle be
informed of and, to the extent practicable, participate in meetings and
discussions between the Company and any investor relating to the matters
covered by the terms of Rochelle's engagement.
4 The Company agrees that any report or opinion, oral or written delivered to
it by Rochelle is prepared solely for its confidential use and shall not be
reproduced, summarized, or referred to in any public document or given or
otherwise divulged to any other person without Rochelle's prior written
consent, except as may be required by applicable law or regulation.
5 No fee payable to Rochelle pursuant to any other agreement with the Company
or payable by the Company to any lender or investor brought to the Company
by Rochelle, shall reduce or otherwise affect any fee payable by the
Company to Rochelle hereunder.
6 The Company and Rochelle each represents and warrants to the other that;
(a) it has full right, power and authority to enter into this Agreement and
to perform all of its obligations hereunder; (b) this Agreement has been
duly authorized and executed and constitutes a valid and binding agreement
of it enforceable in accordance with its terms; and (c) the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby does not conflict with or result in a breach of (i) its
certificate of incorporation or bylaws or (ii) any agreement to which it is
a party or by which any of its property or assets is bound.
7 Nothing contained in this Agreement shall be construed to place Rochelle
and the Company in the relationship of partners or joint venturers. Neither
Rochelle nor the Company shall represent itself as the agent or
representative of the other for any reason
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whatsoever nor shall either have the power to obligate or bind the other
in any manner whatsoever. Rochelle in performing its services hereunder
shall at all times be an independent contractor.
8 This Agreement has been and is made solely for the benefit of Rochelle and
the Company and each of the persons, agents, employees, officers, directors
and controlling persons referred to in Exhibit B and their respective
heirs, executors, personal representatives, successors and assigns and
nothing contained in this Agreement shall confer any rights upon nor shall
this Agreement be construed to create any rights in, any person who is not
party to such Agreement other than as set forth in this paragraph.
9 The rights and obligations of either party under this Agreement may not be
assigned without the prior written consent of the other party hereto and
any other purported assignment shall be null and void.
10 All communications hereunder except as may be otherwise specifically
provided herein, shall be in writing and shall be mailed, hand delivered or
when sent via facsimile confirmed, to the party to whom it is addressed at
the following addresses or such other addresses as such party may advise
the other in writing:
TO THE COMPANY:
Photogen Technologies, Inc
7327 Oak Ridge Highway
Knoxville, TN 37931
USA
Attention: Dr. T. J. Williams
Tel: (865) 769-4011
Fax: (865) 539-9654
COPIES TO:
Theodore W. Grippo, Esq.
Grippo & Elden
227 West Monroe Street
Suite 3600
Chicago, IL 60606
USA
Tel: (312) 704-7720
Fax: (312) 558-1195
TO ROCHELLE S.A.:
Rochelle S.A.
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38 Hertford Street
London
W1Y 7TG
United Kingdom
Attention: Mr. James Martin
Tel: +44 (0207) 355 2051
Fax: +44 (0207) 355 4975
All notices hereunder shall be effective upon receipt by the party to which it
is addressed.
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EXHIBIT B
INDEMNIFICATION
The Company agrees that it shall indemnify and hold harmless, Rochelle, its
stockholders, directors, officers, employees, agents, affiliates and
controlling persons within the meaning of section 20 of the Securities
Exchange Act of 1934 and section 15 of the Securities Act of 1933, each as
amended (any and all of whom are referred to as an "Indemnified Party") from
and against any and all losses, claims damages, liabilities or expenses, and
all actions in respect thereof (including but not limited to, all legal or
other expenses reasonably incurred by an Indemnified Party in connection with
the investigation, preparation, defense or settlement of any claim action or
proceeding whether or not resulting in any liability) incurred by an
Indemnified Party; (a) arising out of, or in connection with, any actions
taken or omitted to be taken by the Company, its affiliates, employees or
agents, or any untrue statement or alleged untrue statement of a material
fact contained in any of the financial or other information contained in the
registration statement and/or final prospectus furnished to Rochelle by or on
behalf of the Company or the omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; or (b)
with respect to, caused by, or otherwise arising out of any transaction
contemplated by the Agreement or Rochelle's performing the services
contemplated hereunder PROVIDED HOWEVER, the Company will not be liable under
clause (b) hereof to the extent and only to the extent, that any loss, claim,
damage, liability or expense is finally judicially determined to have
resulted primarily from Rochelle's negligence or bad faith in performing such
services.
If the indemnification provided for herein is conclusively determined (by an
entry of final judgment by a court of competent jurisdiction and the
expiration of the time or denial of the right to appeal) to be unavailable or
insufficient to hold any Indemnified Party harmless in respect to any losses,
claims, damages, liabilities or expenses referred to therein, then the
Company shall contribute to the amounts paid or payable by such Indemnified
Party in such proportion as is appropriate and equitable under all
circumstances taking into account the relative benefits received by the
Company on the one hand and Rochelle on the other, from the transaction or
proposed transaction under the Agreement or, if allocation on that basis is
not permitted under applicable law, in such proportion as is appropriate to
reflect not only the relative benefits received by the Company on the one
hand and Rochelle on the other, but also the relative fault of the Company
and Rochelle: PROVIDED HOWEVER, in no event shall the aggregate contribution
of Rochelle and or any indemnified Party be in excess of net compensation
actually received by Rochelle and or such Indemnified Party pursuant to this
Agreement.
The Company shall not settle or compromise or consent to the entry of any
judgment in or otherwise seek to terminate any pending or threatened action,
claim, suit or proceeding in which any Indemnified Party is or could be a
party and as to which indemnification or contribution could have been sought
by such Indemnified Party hereunder (whether or not such Indemnified Party is
a party thereto) unless such consent or termination includes an express
unconditional release of such Indemnified Party, reasonably satisfactory in
form and substance to such Indemnified Party from all losses, claims,
damages, liabilities or expenses arising out of such action, claim, suit or
proceeding.
The foregoing indemnification and contribution provisions are not in lieu of,
but in addition to, any rights which any Indemnified Party may have at common
law hereunder or otherwise and shall remain in full force and effect
following the expiration or termination of Rochelle's engagement and shall be
binding on any successors or assigns of the Company and successors or assigns
to all or substantially all of the Company's business or assets.
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EXHIBIT C
JURISDICTION
The Company hereby irrevocably: (a) submits to the jurisdiction of any court
of the State of New York or any federal court sitting in the City of New
York, State of New York for the purpose of any suit, action or other
proceeding arising out of the Agreement between the Company and Rochelle
which is brought by or against the Company or Rochelle; (b) agrees that all
claims in respect of any suit, action or proceeding may be heard and
determined in any such court; and (c) to the extent that the Company has
acquired, or hereafter may acquire, any immunity from jurisdiction of any
such court or from any legal process therein the Company hereby waives to the
fullest extent permitted by law such immunity.
The Company waives and the Company agrees not to assert in any such suit,
action or proceeding, in each case, to the fullest extent permitted by
applicable law any claim that: (a) the Company is not personally subject to
the jurisdiction of any such court; (b) the Company is immune from any legal
process (whether through service or notice, attachment prior to judgment,
attachment in the aid of execution, execution or otherwise) with respect to
it or its property; (c) any such suit action or proceeding is brought in an
inconvenient forum; (d) the venue of any such suit, action or proceeding is
improper; or (e) this Agreement may not be enforced in or by any such court.
Any process against the Company in, or in connection with, any suit, action
or proceeding filed in the United States District Court for the Southern
District of New York or any other court of the State of New York sitting in
the City of New York arising out of or relating to this Agreement or any
transaction or Agreement contemplated hereby, may be served on the Company
personally, or by first class mail or overnight courier (with the same effect
as though served upon the Company personally) addressed to the Company at the
address set forth in the Agreement between the Company and Rochelle.
Nothing in these provisions shall affect any party's right to serve process
in any manner permitted by Law or limit its rights to bring a proceeding in
the competent courts of any jurisdiction or jurisdictions or to enforce in
any lawful manner a judgment obtained in one jurisdiction in any other
jurisdiction.
This Agreement shall be construed by and construed in accordance with the
laws of the State of New York, without regard to conflicts of law
principles.
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EXHIBIT D
DISCLOSURES
A. FINANCIAL ADVISOR COMMITMENTS. The Company is subject to agreements with
the Trout Group/Aqua Partners LLC and Farcap Group, LLC. Rochelle agrees
that the Company may confer with those parties and any other financial
advisors during the term of this Agreement on all financial matters
(including investor and shareholder relations matters and matters excluded
from Rochelle's right of first refusal by Sections 4(i), (ii) and (iii));
provided, however, that so long as Rochelle is an exclusive placement agent
pursuant to this Agreement, including any right of first refusal period,
the sale of Securities of the Company, other than those so excluded above,
will be placed through Rochelle.
B. REGISTRATION RIGHTS. Rochelle acknowledges that the Company is obligated
to provide a number of its shareholders with piggyback or joining rights
regarding future registered offerings of the Company's Securities. Those
joining rights are subject to denial if such joining rights, in the
determination of the underwriter, would adversely affect the contemplated
offering. In addition, the Company is subject to the following demand
registration rights:
Farcap Group, LLC has one demand registration right with
respect to 500,000 shares subject to a warrant; provided,
that the Company may deny to effect a demand registration if
its Board determines that it would not be in the Company's
best interest to effect a registration at that time.
Elan International Services, Ltd. has demand registration
rights with respect to 461,538 shares of common stock and
for any shares of common stock issuable upon conversion of
the Series A Preferred Stock or the Convertible Note, or
upon exercise of the Warrant; provided that the number of
shares to be registered will be reduced to the extent the
underwriter determines that the marketability of the
offering would be adversely affected and the registration
demand may be denied and postponed if the Company determines
that it would have an adverse effect on other financing
activities of the Company.
The holders of the Company's Series B Preferred Stock have
demand registration rights with respect to the shares of
common stock into which the Series B Preferred is
convertible; provided that the number of shares to be
registered will be reduced to the extent the underwriter
determines that the marketability of the offering would be
adversely affected and the registration demand may be denied
and postponed if the Company determines that it would have
an adverse effect on other financing activities of the
Company.
The Company has not received any notice from the foregoing shareholders
demanding registration of any of the Company's Securities.
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