<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 30, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CALYPTE BIOMEDICAL CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 3826 06-1226727
(State or other jurisdiction (Primary Standard Industrial (I.R.S. employer
of Classification Code Number) identification
incorporation or organization) number)
</TABLE>
1440 FOURTH STREET, BERKELEY, CALIFORNIA 94710,
(510) 749-5100
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
------------------------
WILLIAM A. BOEGER
President, Chief Executive Officer and Chairman of the Board of Directors
Calypte Biomedical Corporation
1440 Fourth Street
Berkeley, California 94710
(510) 749-5100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
COPIES TO:
BRUCE W. JENETT, ESQ.
Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
(650) 324-7000 (phone)
(650) 324-0638 (fax)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
------------------------
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act of 1933, as amended, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. / / ____
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, as amended, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / / ____
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TITLE OF SHARES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.001 par value 3,798,000 $2.8905 $10,978,119 $3,051
- ---------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated in accordance with Rule 457(c) for the purpose of computing the
amount of the registration fee based on the average of the high and low
prices of the Company's Common Stock on the Nasdaq SmallCap Market on March
24, 1999.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT 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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED MARCH 30, 1999
PROSPECTUS
CALYPTE BIOMEDICAL CORPORATION
3,798,000 SHARES OF COMMON STOCK
------------------
The stockholders of Calypte Biomedical Corporation identified on page 10 may
offer and sell the shares covered by this prospectus from time to time. The
selling stockholders will receive all of the proceeds from the sale of the
shares and will pay all underwriting discounts and selling commissions, if any,
applicable to the sale of the shares. Calypte will pay the expenses of
registration of the sale of the shares.
Our common stock trades on the Nasdaq SmallCap Market under the symbol
"CALY". On March 26, 1999, the last reported sale price of our common stock on
the Nasdaq SmallCap Market was $2.97 per share.
BEGINNING ON PAGE 2, WE HAVE LISTED SEVERAL "RISK FACTORS" WHICH YOU SHOULD
CONSIDER. YOU SHOULD READ THE ENTIRE PROSPECTUS CAREFULLY BEFORE YOU MAKE YOUR
INVESTMENT DECISION.
------------------------
The Securities and Exchange Commission and state regulatory authorities have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.
------------------------
The Date of this Prospectus is , 1999
<PAGE>
RISK FACTORS
YOU SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS, ALONG WITH THE
OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS, IN
DECIDING WHETHER TO INVEST IN OUR SHARES. THESE FACTORS, AMONG OTHERS, MAY CAUSE
ACTUAL RESULTS, EVENTS OR PERFORMANCE TO DIFFER MATERIALLY FROM THOSE EXPRESSED
IN ANY FORWARD-LOOKING STATEMENTS MADE IN THIS PROSPECTUS.
UNCERTAIN MARKET ACCEPTANCE OF OUR NEW METHOD OF DETERMINING THE PRESENCE OF
HIV ANTIBODIES. Our products incorporate a new method of determining the
presence of HIV antibodies. There can be no assurance that we will obtain:
- any significant degree of market acceptance among physicians, patients or
health care payors; or
- recommendations and endorsements by the medical community which are
essential for market acceptance of the products.
We have FDA approval to market our urine HIV-1 screening and confirmatory test
in the United States and in July, 1998 we began marketing this product. However,
to date this product has only generated limited revenues and not achieved
significant market penetration. The failure of our products to obtain market
acceptance would have a material adverse effect on us.
WE HAVE LITTLE EXPERIENCE SELLING AND MARKETING OUR HIV-1 URINE-BASED
SCREENING TEST. We have little experience marketing and selling our products
either directly or through our distributors. The success of our products
depends upon alliances with third-party distributors. There can be no
assurance that:
- our direct selling efforts will be effective;
- our distributors will successfully market our products; or
- if our relationships with distributors terminate, we will be able to
establish relationships with other distributors on satisfactory terms, if
at all.
Any disruption in our distribution, sales or marketing network could have a
material adverse effect on us.
WE HAVE SUSTAINED LOSSES IN THE PAST AND WE EXPECT TO SUSTAIN LOSSES IN
THE FUTURE. We have incurred losses in each year since our inception. Our
net loss for the year ended December 31, 1998 was $8.5 million and our
accumulated deficit as of December 31, 1998 was $56.8 million. We expect
operating losses to continue as we continue our marketing and sales
activities for our first FDA-approved product and conduct additional research
and development for subsequent products.
The report of KPMG LLP covering the December 31, 1998, consolidated
financial statements contains an explanatory paragraph that states that our
recurring losses from operations and accumulated deficit raise
substantial doubts about our ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that
might result from the outcome of that uncertainty.
OUR QUARTERLY RESULTS MAY FLUCTUATE DUE TO CERTAIN REGULATORY, MARKETING AND
COMPETITIVE FACTORS OVER WHICH WE HAVE LITTLE OR NO CONTROL. The factors listed
below, some of which we can not control, may cause our revenues and results of
operations to fluctuate significantly:
- actions taken by the FDA or foreign regulatory bodies relating to our
products;
- the extent to which our products gain market acceptance;
- the timing and size of distributor purchases; and
- introductions of alternative means for testing for HIV by competitors.
WE MAY NOT BE ABLE TO OBTAIN ADDITIONAL FINANCING THAT WE WILL NEED IN
THE NEXT TWELVE MONTHS. We believe that we will need to raise more money in
the next twelve months to continue to finance our operations. We may not be
able to obtain additional financing on acceptable terms, or at all. Any
failure to raise additional financing will likely place us in significant
financial jeopardy.
The report of KPMG LLP covering the December 31, 1998, consolidated
financial statements contains an explanatory paragraph that states that our
recurring losses from operations and accumulated deficit raise
substantial doubts about our ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that
might result from the outcome of that uncertainty.
WE DEPEND UPON THE VIABILITY OF THREE PRODUCTS--OUR HIV-1 URINE-BASED
SCREENING TEST AND OUR URINE AND BLOOD-BASED SUPPLEMENTAL TESTS. Our HIV-1
urine-based screening test and our urine and blood-based supplemental tests
are our only products. Accordingly, we may have to cease operations if our
tests fail to achieve market acceptance or generate significant revenues.
OUR PRODUCTS DEPEND UPON RIGHTS TO TECHNOLOGY THAT WE HAVE LICENSED FROM
THIRD PARTY PATENT HOLDERS AND THERE CAN BE NO ASSURANCE THAT
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THE RIGHTS WE HAVE UNDER THESE LICENSING AGREEMENTS ARE SUFFICIENT OR THAT WE
CAN ADEQUATELY PROTECT THOSE RIGHTS. We currently have the right to use
patent and proprietary rights which are material to the manufacture and sale
of our HIV-1 urine-based screening test under licensing agreements with New
York University, Cambridge Biotech Corporation, Repligen, and the Texas A&M
University System.
WE RELY ON SOLE SOURCE SUPPLIERS THAT WE CANNOT QUICKLY REPLACE FOR CERTAIN
COMPONENTS CRITICAL TO THE MANUFACTURE OF OUR PRODUCTS. Any delay or
interruption in the supply of these components could have a material adverse
effect on us by significantly impairing our ability to manufacture products in
sufficient quantities, particularly as we increase our manufacturing activities
in support of commercial sales.
WE HAVE LIMITED EXPERIENCE IN MANUFACTURING OUR PRODUCTS AND LITTLE
EXPERIENCE IN MANUFACTURING OUR PRODUCTS IN COMMERCIAL QUANTITIES. We may
encounter difficulties in scaling-up production of new products, including
problems involving:
- production yields;
- quality control and assurance;
- raw material supply; and
- shortages of qualified personnel.
THE SUCCESS OF OUR PLANS TO ENTER INTERNATIONAL MARKETS MAY BE LIMITED OR
DISRUPTED DUE TO RISKS RELATED TO INTERNATIONAL TRADE AND MARKETING AND THE
CAPABILITIES OF OUR DISTRIBUTORS. We anticipate that international distributor
sales will generate a significant portion of our revenues for the next several
years. We believe that our urine-based test can provide significant benefits in
countries that do not have the facilities or personnel to safely and effectively
collect and test blood samples. The following risks may limit or disrupt our
international sales:
- the imposition of government controls;
- export license requirements;
- political instability;
- trade restrictions;
- changes in tariffs;
- difficulties in managing international operations; and
- fluctuations in foreign currency exchange rates.
Some of our distributors have limited international marketing experience.
There can be no assurance that these distributors will be able to market
successfully our products in foreign markets.
WE FACE INTENSE COMPETITION IN THE MEDICAL DIAGNOSTIC PRODUCTS MARKET AND
RAPID TECHNOLOGICAL ADVANCES BY COMPETITORS. Competition in our diagnostic
market is intense and we expect it to increase. Within the United States, our
competitors include a number of well-established manufacturers of HIV tests
using blood samples, plus at least one system for the detection of HIV
antibodies using oral fluid samples. Many of our competitors have significantly
greater financial, marketing and distribution resources than we do. Several of
these competitors may have already submitted applications to the FDA for
approval of their over-the-counter products. Our competitors may succeed in
developing or marketing technologies and products that are more effective than
ours.
These developments could render our technologies or products obsolete or
noncompetitive or otherwise have a material adverse effect on us.
OUR ABILITY TO MARKET OUR PRODUCT DEPENDS UPON OBTAINING AND MAINTAINING FDA
AND FOREIGN REGULATORY APPROVALS. Numerous governmental authorities in the
United States and other countries regulate our products. The FDA regulates our
products under federal statutes and regulations related to pre-clinical and
clinical testing, manufacturing, labeling, distribution, sale and promotion of
medical devices in the United States.
If we fail to comply with FDA regulations, or the FDA believes that we are
not in compliance with such regulations, the FDA can:
- detain or seize our products;
- issue a recall of our products;
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<PAGE>
- prohibit marketing and sales of our products; and
- assess civil and criminal penalties against us, our officers or our
employees.
We also plan to sell our products in certain foreign countries where they
may be subject to similar local regulatory requirements. The imposition of any
of the sanctions described above could have a material adverse effect on us.
The regulatory approval process in the United States and other countries is
expensive, lengthy and uncertain. We may not obtain necessary regulatory
approvals or clearances in a timely manner, if at all. We may lose previously
obtained approvals or clearances or fail to comply with regulatory requirements.
The occurrence of any of these events would have a material adverse effect on
Calypte.
In addition, we are in the process of moving manufacturing from our
Berkeley, California facility to our facility in Alameda, California and we
have filed an establishment license application for the Alameda facility with
the FDA. Before we begin to manufacture our product at the Alameda facility,
we must obtain FDA approval for that facility. Delays in receiving the FDA's
approval or other difficulties which we encounter in scaling-up our
manufacturing capacity to meet demand could have a material adverse effect on
us.
WE HAVE RECEIVED A WARNING LETTER FROM THE FDA REGARDING THE SUFFICIENCY
OF OUR MANUFACTURING RECORDS AND PRODUCTION PROCEDURES AND WE MUST SATISFY
THE FDA'S CONCERNS IN ORDER TO AVOID REGULATORY ACTION AGAINST US. On
November 19, 1998, we received a Warning Letter from the FDA following an
inspection of our manufacturing facility in Berkeley, California. On December
11, 1998 we responded to the Warning Letter in writing to each of the alleged
deficiencies cited in the Warning Letter. Subsequently the Company received a
letter from the FDA in which the FDA requested further responses from the
Company with regard to certain of the alleged deficiencies. The Company is in
the process of responding to such letter. If the FDA is not satisfied with
our responses and our corrective actions, it could take regulatory actions
against us including license suspension, revocation, and/or denial, seizure
and/or injunction, and/or civil penalties or criminal sanctions. Any such FDA
action is likely to have a material adverse effect upon our ability to
conduct operations. In addition, failure to satisfy the FDA as to the Warning
Letter may adversely affect receiving approval for the Alameda facility.
AS A SMALL MANUFACTURER OF A MEDICAL DIAGNOSTIC PRODUCT, WE ARE EXPOSED TO
PRODUCT LIABILITY AND RECALL RISKS FOR WHICH INSURANCE COVERAGE IS EXPENSIVE,
LIMITED AND POTENTIALLY INADEQUATE. Calypte manufactures medical diagnostic
products which subject it to risks of product liability claims or product
recalls, particularly in the event of false positive or false negative reports.
A product recall or a successful product liability claim or claims which exceed
our insurance coverage could have a material adverse effect on us. We maintain
a $10,000,000 claims made policy of product liability
4
<PAGE>
insurance. However, product liability insurance is expensive. In the future we
may not be able to obtain coverage on acceptable terms, if at all. Moreover, our
insurance coverage may not adequately protect us from liabilities which we incur
in connection with clinical trials or sales of our products.
OUR CHARTER DOCUMENTS MAY INHIBIT A TAKEOVER. Certain provisions of our
Certificate of Incorporation and Bylaws could:
- discourage potential acquisition proposals;
- delay or prevent a change in control of Calypte;
- diminish stockholders' opportunities to participate in tender offers for
our common stock, including tender offers at prices above the then current
market price; or
- inhibit increases in the market price of our common stock that could
result from takeover attempts.
WE HAVE ADOPTED A STOCKHOLDER RIGHTS PLAN THAT HAS CERTAIN ANTI-TAKEOVER
EFFECTS. On December 15, 1998, the Board of Directors of Calypte declared a
dividend distribution of one preferred share purchase right for each
outstanding share of Common Stock of the Company. The dividend is payable to
the stockholders of record on January 5, 1999 with respect to each share of
Common Stock issued thereafter until a subsequent "distribution date" defined
in a Rights Agreement and, in certain circumstances, with respect to shares
of Common Stock issued after the Distribution Date.
The rights have certain anti-takeover effects. The rights will cause
substantial dilution to a person or group that attempts to acquire the Company
without conditioning the offer on the rights being redeemed or a substantial
number of rights being acquired. However, the rights should not interfere
with any tender offer, or merger, which is approved by us because the rights
do not become exercisable in the event of an offer or other acquisition
exempted by Calypte's Board of Directors.
AN INVESTORS' ABILITY TO TRADE OUR COMMON STOCK MAY BE LIMITED BY TRADING
VOLUME. The trading volume in our common shares has been relatively limited. A
consistently active trading market for our common stock may not develop.
WE MAY BE REMOVED FROM THE NASDAQ SMALLCAP MARKET IF WE FAIL TO MEET CERTAIN
MAINTENANCE CRITERIA. The Nasdaq Stock Market inquired on one occasion whether
we continue to meet the net capital surplus maintenance criterion for trading on
the Nasdaq SmallCap Market. We currently meet the capital surplus requirement
but our ability to continue to do so will depend on whether we are able to
maintain a net capital surplus of at least $1,000,000. The public trading volume
of our common stock and the ability of our stockholders to sell their shares
could be significantly impaired if we fail to meet the maintenance criteria and
are removed from the Nasdaq SmallCap Market. In that case, our common stock
would trade on either the OTC bulletin board, a regional exchange or in the pink
sheets, which would likely result in an even more limited trading volume.
THE PRICE OF CALYPTE'S COMMON STOCK HAS BEEN HIGHLY VOLATILE DUE TO SEVERAL
FACTORS WHICH WILL CONTINUE TO EFFECT THE PRICE OF OUR STOCK. Our common stock
has traded as low as $.50 and as high as $4.43 between mid-October 1998 and
mid-March 1998. Some of the factors leading to this volatility include:
- price and volume fluctuations in the stock market at large which do not
relate to our operating performance;
- fluctuations in our operating results;
- announcements of technological innovations or new products which we or our
competitors make;
- FDA and international regulatory actions;
- availability of reimbursement for use of our products from private health
insurers, governmental health administration authorities and other
third-party payors;
- developments with respect to patents or proprietary rights;
- public concern as to the safety of products that we or others develop;
- changes in health care policy in the United States or abroad; and
- changes in stock market analysts' recommendations regarding Calypte, other
medical products companies or the medical product industry generally.
- fluctuations in market demand for and supply of our products.
CALYPTE AND THE PRICE OF CALYPTE SHARES MAY BE ADVERSELY EFFECTED BY THE
PUBLIC SALE OF A SIGNIFICANT NUMBER OF THE SHARES ELIGIBLE FOR FUTURE SALE.
All outstanding shares of our common stock are freely tradable. Sales of
common stock in the public market could materially adversely affect the
market price of our common stock. Such sales also may inhibit our ability to
obtain future equity or equity-related financing on acceptable terms.
OUR RESEARCH AND DEVELOPMENT OF HIV URINE TESTS INVOLVES THE CONTROLLED USE
OF HAZARDOUS MATERIALS. There can be no assurance that our safety procedures
for handling and disposing of hazardous materials such as azide will comply with
applicable regulations. In addition, we can
5
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not eliminate the risk of accidental contamination or injury from these
materials. We may be held liable for damages from such an accident and that
liability could have a material adverse effect on us.
WE MAY NOT BE ABLE TO RETAIN OUR KEY EXECUTIVES AND RESEARCH AND DEVELOPMENT
PERSONNEL. As a small company with only 50 employees, our success depends on the
services of key employees in executive and research and development positions.
The loss of the services of one or more of such employees could have a material
adverse effect on us.
WE HAVE NOT COMPLETED OUR YEAR 2000 COMPLIANCE PROGRAM SO THE POTENTIAL
COSTS AND COMPLICATIONS ASSOCIATED WITH YEAR 2000 COMPLIANCE CANNOT BE
DETERMINED AT THIS TIME. Calypte has a formal Year 2000 Program focusing on
five key readiness areas: 1) hardware, addressing information technology; 2)
software, addressing business, research, financial, inventory planning,
production control, product distribution and customer support; 3) firmware,
addressing built-in microprocessors that control production and non-production
equipment; 4) third party suppliers of critical inventory; and 5) third party
service providers.
Calypte established a Year 2000 Task Force in 1998. The task force is
systematically examining each of the five key readiness areas by 1)
identifying items with Year 2000 compliance concerns; 2) assessing the risk
and impact of noncompliance for each item identified; and 3) correcting
non-compliant items and testing the corrections to ensure readiness at both
component and system levels. Calypte is in the process of contacting key
suppliers to identify any concerns which may arise due to such suppliers'
potential non-compliance. The task force will develop contingency plans if it
discovers areas where there is a substantial possibility that Year 2000
compliance will not be achieved. Calypte has identified items with Year 2000
compliance concerns in three readiness areas: software, third party suppliers
of critical inventory and third party service providers. We expect to
complete risk assessment in each area for our California and Maryland
facilities by May 1999, and the correction, testing and the development of
contingency plans will follow. Until we have completed our risk assessment
and developed any necessary contingency plans, we will not be in a position
to identify our most reasonably likely worst case Year 2000 scenario. We have
presently completed correction and testing in the Hardware readiness area for
our California facilities and that area is now Year 2000 compliant in our
California facilities. As of December 31, 1998, Calypte had spent a total of
approximately $2300 on its Year 2000 program and has made limited
expenditures related to its Year 2000 program since then. Through March 15,
1999, we have not incurred any unexpected Year 2000 related costs and we will
provide an updated total of Year 2000 program expenditures in our Form 10-Q
Report for the quarter ended March 31, 1999.
We estimate that total Year 2000 costs to upgrade systems for our
California and Maryland facilities will range from $24,000 to $35,000 with the
majority of costs to be incurred in the next six months. At this time we do
not anticipate that Calypte will incur significant operating expenses or be
required to invest heavily in computer system improvements because our
manufacturing process does not rely heavily on automation and our existing
computer hardware in our California facility has proven to be Year 2000
compliant. However, Calypte is continuing to assess and develop alternatives
that will require refinement of its cost estimate over time. There can be no
assurance that there will not be a delay in, or increased costs associated
with, our Year 2000 compliance program. Since our program is ongoing, all
potential Year 2000 complications have not yet been identified. Therefore,
the potential impact of possible complications on Calypte's financial
condition and results of operations cannot be determined at this time. If
computer systems used by Calypte or its suppliers or the product integrity of
products provided to Calypte by suppliers fail or experience significant
difficulties related to the Year 2000, Calypte's operations and financial
condition could be adversely effected.
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You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. The selling stockholders are offering to sell, and
seeking offers to buy, shares of our common stock only in jurisdictions where
offers and sales are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the time of
delivery of this prospectus or of any sale of the shares.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly, and current reports, proxy statements, and other
documents with the Securities and Exchange Commission. You may read and copy any
document we file at the SEC's public reference room at Judiciary Plaza Building,
450 Fifth Street, NW, Room 1024, Washington, D.C. 20549. You should call
1-800-SEC-0330 for more information on the public reference room. The SEC
maintains an internet site at http://www.sec.gov where certain information
regarding issuers (including Calypte) may be found.
This prospectus is part of a registration statement that we filed with the
SEC (Registration No. 333-______). The registration statement contains more
information than this prospectus regarding Calypte and its common stock,
including certain exhibits and schedules. You can get a copy of the registration
statement from the SEC at the address listed above or from its internet site.
DOCUMENTS INCORPORATED BY REFERENCE
The SEC allows us to "incorporate" into this prospectus information we file
with the SEC in other documents. This means that we can disclose important
information to you by referring to other documents that contain that
information. The information may include documents filed after the date of this
prospectus which update and supersede the information you read in this
prospectus. We incorporate by reference the documents listed below, except to
the extent information in those documents is different from the information
contained in this prospectus, and all future documents filed with the SEC under
Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 until
we terminate the offering of these shares.
<TABLE>
<CAPTION>
SEC FILING
(FILE NO. 0-20985) PERIOD/FILING DATE
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<S> <C>
Annual Report on Form 10-K Year ended December 31, 1998
Current Report on Form 8-K March 5, 1999
Current Report on Form 8-K January 4, 1999
Description of common stock contained in July 10, 1996
Registration Statements on Form 8-A December 16, 1998
</TABLE>
You may request a copy of these documents, at no cost, by writing to:
Calypte Biomedical Corporation
1440 Fourth Street
Berkeley, California 94710
Attention: President
Telephone: (510) 749-5100.
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FORWARD-LOOKING INFORMATION
Statements made in this prospectus or in the documents incorporated by
reference herein that are not statements of historical fact are forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, and
Section 21E of the Securities Exchange Act of 1934. A number of risks and
uncertainties, including those discussed under the caption "Risk Factors" above
and the documents incorporated by reference herein could affect such
forward-looking statements and could cause actual results to differ materially
from the statements made.
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CAPITALIZATION
The following table sets forth the actual capitalization of Calypte at
December 31, 1998. The table also sets forth the actual capitalization pro
forma and as adjusted for the sale of the 3,398,000 shares that purchasers in
the Common Stock Purchase Agreement dated March 26, 1999 agreed to buy at a
price of $2.25 per share, and includes the application of the net proceeds
receivable upon closing of the sale (after deduction of estimated commissions
and estimated offering expenses).
<TABLE>
<CAPTION>
DECEMBER 31, 1998
-----------------------
PRO FORMA
AND AS
ACTUAL(1) ADJUSTED
---------- -----------
(IN THOUSANDS, EXCEPT
SHARE AND PER SHARE
DATA)
<S> <C> <C>
Long-term portion of capital lease obligations.......................................... $ 23 $ 23
Mandatorily Redeemable Series A Preferred Stock, $0.001 par value; no shares authorized; 2,096 2,096
100,000 shares issued and outstanding; aggregate redemption and liquidation value of
$1,000 plus cumulative dividends......................................................
Stockholders' equity (deficit):
Preferred Stock, $0.001 par value, 5,000,000 shares authorized; no shares issued and -- --
outstanding, actual and as adjusted.................................................
Common Stock, $0.001 par value, 30,000,000 shares authorized; 13,870,453 shares issued
and outstanding, as of December 31, 1998; 17,268,453 shares issued and outstanding,
as adjusted......................................................................... 14 17
Common Stock Subscribed................................................................. 3 3
Additional paid-in capital.............................................................. 61,476 68,529
Deferred compensation................................................................... (107) (107)
Accumulated deficit..................................................................... (56,755) (56,755)
---------- -----------
Total stockholders' equity.............................................................. $ 4,631 $ 11,687
---------- -----------
---------- -----------
Total capitalization.................................................................... $ 6,750 $ 13,806
---------- -----------
---------- -----------
</TABLE>
- ------------------------
(1) Includes 400,000 shares of Common Stock issued to Cambridge Biotech
Corporation as partial consideration for the purchase of certain assets
related to the Western Blot tests. Such shares may be offered
pursuant to this prospectus by Cambridge Biotech Corporation, one of the
selling stockholders.
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SELLING STOCKHOLDERS
The following table sets forth the names of the selling stockholders, the
number of shares of common stock owned beneficially by the selling
stockholders as of March 25, 1999 and the number of shares that may be
offered pursuant to this prospectus. This information is based upon
information provided by the selling stockholders. There are currently no
agreements, arrangements or understandings with respect to the sale of any of
the shares. The shares are being registered to permit public secondary
trading of the shares, and the selling stockholders may offer the shares for
resale from time to time. The percentages of ownership set forth in the table
are based on 16,992,069 shares of Common Stock outstanding as of March 25,
1999, and assume the sale and issuance of 3,398,000 shares of Common Stock
pursuant to the Common Stock Purchase Agreement dated March 26, 1999 through
which the selling stockholders, with the exception of Cambridge Biotech
Corporation, acquired the shares that may be offered pursuant to this
prospectus. The individuals named in parentheses in the table have certain
affiliations with the selling stockholder listed immediately above such
individual. However, such individuals disclaim beneficial ownership of the
shares.
As set forth in note 1 below, eight of the selling stockholders are
employees and/or shareholders of Pacific Growth Equities, Inc. Pacific Growth
Equities was the underwriter for Calypte's initial public offering and the
placement agent for the sale of the shares sold through the Common Stock
Purchase Agreement dated March 28, 1999 to certain of the selling
stockholders. Calypte has agreed to pay Pacific Growth Equities approximately
$535,000 upon the closing of the sale for certain investment advisory
services and for placement agent fees in connection with sales to certain
purchasers, as well as for other advisory services unconnected to the
offering. In addition, Calypte has agreed to reimburse Pacific Growth
Equities for its reasonable out-of-pocket expenses incurred in connection
with the offering, including the reasonable fees and expenses of Pacific
Growth Equities' counsel, up to a maximum of $50,000.
<TABLE>
<CAPTION>
COMMON STOCK COMMON STOCK
BENEFICIALLY OWNED COMMON BENEFICIALLY OWNED
PRIOR TO OFFERING STOCK AFTER OFFERING
--------------------- TO BE --------------------
HOLDER NUMBER PERCENT SOLD NUMBER PERCENT
- ---------------------------------------------------- ---------- --------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Atlas II, LP 800,000 3.92% 100,000 700,000 3.43%
(Richard Jacinto, General Partner)
Bergen Fonds ASA 60,000 * 60,000 -- *
Berta, Julie (1) 35,000 * 20,000 15,000 *
Berta, Peter L. (1) 85,000 * 80,000 5,000 *
Cambridge Biotech Corporation (2) 400,000 1.96% 400,000 -- *
Chiang, Kuo-Yu 200,000 * 200,000 -- *
Clarion Group (3) 871,220 4.27% 250,000 621,220 3.05%
(Morton A. Cohen)
Coleman, Jr., John C. (1) 18,400 * 10,000 8,400 *
Corfman, James S. & Carole G. Corfman 100,000 * 100,000 -- *
Endeavor Asset Management, L.P. 50,000 * 50,000 -- *
(Chad Comiteau, General Partner)
Fidelity National Title Insurance Co. of New York 50,000 * 50,000 -- *
(Stuart G. Gauld, Vice President)
Hollis Capital 50,000 * 50,000 -- *
(Paul J. Siegal, Principal)
JTH Assoc. Partnership 75,000 * 75,000 -- *
(Thomas H. Robinson, General Partner)
Kamin, Anthony 10,000 * 10,000 -- *
Lancaster Investment Partners, L.P. 150,000 * 150,000 -- *
(Robert A. Berlacher, Managing General Partner)
Marcuard Cook & Cie S.A. 100,000 * 100,000 -- *
Massocca, Stephen J. (1) 123,500 * 98,000 25,500 *
Murray Family Trust 25,000 * 25,000 -- *
(John Murray & Coralie Eddy Murray, Trustees) (2)
Osgood, Richard H. (1) 25,000 * 25,000 -- *
Padou, Donald (1) 10,000 * 10,000 -- *
Porter Partners, L 108,200 * 100,000 8,200 *
(Jeffrey H. Porter, General Partner)
Rosenbach, Gary 50,000 * 50,000 -- *
Schreuder, Fredrik C. 50,000 * 50,000 -- *
Special Situations Funds (4) 1,060,000 5.20% 1,060,000 -- *
(Austin Marxe, Managing Director)
Toney, C. Fred (1) 25,000 * 25,000 -- *
Trellus Partners, LP 100,000 * 100,000 -- *
(Adam Usdan, President)
Veritas SG Investment Trust 200,000 * 200,000 -- *
(Von Ziegesar, CEO)
W Calypte LLC (5) 156,000 * 150,000 6,000 *
(David Gregory Williams, Manager Member)
Zehe, LP 200,000 * 200,000 -- *
(Edward W. Antoian, General Partner)
---------------------------------------------------------
TOTALS 5,187,320 25.44% 3,798,000 1,389,320 6.81%
- -------------------------------------------------------
</TABLE>
* Less than 1%
(1) Stockholder is an employee and/or shareholder of Pacific Growth Equities.
(2) Stockholder acquired shares in connection with acquisition by Calypte of
assets related to the Western Blot tests
(3) Includes 100,000 shares held by Clarion Capital Corporation, 117,000
shares held by Clarion Partners, LP and 33,000 shares held by Clarion
Offshore Fund, Ltd.
(4) Includes 560,000 shares held by Special Situations Fund LP III, 300,000
shares held by Special Situations Private Equity Fund, LP and 200,000
shares held by Special Situations Cayman Fund LP
(5) W Calypte LLC is not affiliated with the registrant, Calypte Biomedical
Corporation.
10
<PAGE>
PLAN OF DISTRIBUTION
The selling stockholders may offer their shares at various times in one or
more of the following transactions:
- on the Nasdaq SmallCap Market (or any other exchange on which the shares
may be listed);
- in the over-the-counter market;
- in negotiated transactions other than on such exchanges;
- by pledge to secure debts and other obligations;
- in connection with the writing of non-traded and exchange-traded call
options, in hedge transactions, in covering previously established short
positions and in settlement of other transactions in standardized or
over-the-counter options; or
- in a combination of any of the above transactions.
The selling stockholders may sell their shares at market prices prevailing
at the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices. The selling stockholders may use
broker-dealers to sell their shares. The broker-dealers will either receive
discounts or commissions from the selling stockholders, or they will receive
commissions from purchasers of shares.
Under certain circumstances the selling stockholders and any broker-dealers
that participate in the distribution may be deemed to be "underwriters" within
the meaning of the Securities Act. Any commissions received by such
broker-dealers and any profits realized on the resale of shares by them may be
considered underwriting discounts and commissions under the Securities Act. The
selling stockholders may agree to indemnify such broker-dealers against certain
liabilities, including liabilities under the Securities Act. In addition,
Calypte has agreed to indemnify the selling stockholders with respect to the
shares offered hereby against certain liabilities, including certain liabilities
under the Securities Act. Alternatively, Calypte may contribute toward amounts
paid due to such liabilities.
Under the rules and regulations of the Exchange Act, any person engaged in
the distribution of the resale of shares may not simultaneously engage in market
making activities with respect to the Calypte's common stock for a period of two
business days prior to the commencement of such distribution. The selling
stockholders will also be subject to applicable provisions of the Exchange Act
and regulations under the Exchange Act which may limit the timing of purchases
and sales of shares of Calypte's common stock by the selling stockholders.
11
<PAGE>
The selling stockholders will pay all commissions, transfer taxes, and other
expenses associated with the sale of securities by them. The shares offered
hereby are being registered pursuant to contractual obligations of Calypte, and
Calypte has paid the expenses of the preparation of this prospectus. We have not
made any underwriting arrangements with respect to the sale of shares offered
hereby.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares by the
selling stockholders.
LEGAL MATTERS
Heller Ehrman White & McAuliffe of Palo Alto, California, our counsel in
connection with the offering, has issued an opinion about the validity of the
securities being offered.
EXPERTS
The consolidated financial statements of Calypte Biomedical Corporation
and subsidiary as of December 31, 1998 and 1997, and for each of the years in
the three-year period ended December 31, 1998, have been incorporated by
reference herein and in the registration statement in reliance upon the
report of KPMG LLP, independent certified public accountants, incorporated by
reference herein, and upon the authority of said firm as experts in
accounting and auditing.
The report of KPMG LLP covering the December 31, 1998, consolidated
financial statements contains an explanatory paragraph that states that the
Company's recurring losses from operations and accumulated deficit raise
substantial doubts about the entity's ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that
might result from the outcome of that uncertainty.
12
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the various expenses in connection with
the sale and distribution of the securities being registered. All of the
amounts shown are estimates except the Securities and Exchange Commission
registration fee.
<TABLE>
<CAPTION>
<S> <C>
Securities and Exchange Commission
Registration Fee . . . . . . . . . . . . . . . . . . . . . . . $ 3,051
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . 30,000
Accounting fees and expenses. . . . . . . . . . . . . . . . . . . . . 15,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,011
-------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 54,062
-------
-------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law permits a
corporation to include in its charter documents, and in agreements between
the corporation and its directors and officers, provisions expanding the
scope of indemnification beyond that specifically provided by the current law.
Article VIII of the Registrant's Certificate of Incorporation provides
for the indemnification of directors to the fullest extent permissible under
Delaware law.
Article VI of the Registrant's Bylaws provides for the indemnification
of officers, directors and third parties acting on behalf of the corporation
if such person acted in good faith and in a manner reasonably believed to be
in and not opposed to the best interest of the corporation, and, with respect
to any criminal action or proceeding, the indemnified party had no reason to
believe his conduct was unlawful.
Calypte has entered into indemnification agreements with its directors
and executive officers, in addition to indemnification provided for in
Calypte's Bylaws, and intends to enter into indemnification agreements with
any new directors and executive officers in the future.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------------------------
<C> <S>
4.1 Common Stock Purchase Agreement between Calypte and the selling stockholders, dated March 26, 1999
5.1 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe (filed as part of Exhibit 5.1)
23.2 Consent of KPMG LLP, Independent Auditors
24.1 Power of Attorney (See page II-3)
</TABLE>
- ------------------------
II-1
<PAGE>
ITEM 17. UNDERTAKINGS
A. 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 paragraphs A(1)(i) and A(1)(ii) do not apply if 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 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.
B. The undersigned registrant hereby undertakes that, for purposes of
determining liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed 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.
C. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the city of Berkeley, State of
California, on March 26, 1999.
CALYPTE BIOMEDICAL CORPORATION
By: /s/ WILLIAM A. BOEGER
--------------------------------------
William A. Boeger
PRESIDENT, CHIEF EXECUTIVE OFFICER AND
CHAIRMAN OF THE BOARD OF DIRECTORS
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement on Form S-3 has been signed below by the
following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------------------ ------------------------------------ -------------------
<C> <S> <C>
WILLIAM A. BOEGER President, Chief Executive Officer
------------------------------------------- and Chairman of Board of Directors
William A. Boeger (Principal Executive Officer) March 26, 1999
HOWARD B. URNOVITZ, PH.D.*
------------------------------------------- Chief Science Officer and Director
Howard B. Urnovitz, Ph.D. March 26, 1999
Chief Operating Officer, Vice
/s/ JOHN J. DIPIETRO* President--Finance, Chief Financial
------------------------------------------- Officer and Secretary (Principal
John J. DiPietro Financial and Accounting Officer) March 26, 1999
DAVID COLLINS*
------------------------------------------- Director
David Collins March 26, 1999
JULIUS R. KREVANS, M.D.*
------------------------------------------- Director
Julius R. Krevans, M.D. March 26, 1999
MARK NOVITCH, M.D.*
------------------------------------------- Director
Mark Novitch, M.D. March 26, 1999
ZAFAR I. RANDAWA, PH.D.*
------------------------------------------- Director
Zafar I. Randawa, Ph.D. March 26, 1999
PAUL FREIMAN*
------------------------------------------- Director
Paul Freiman March 26, 1999
/s/ WILLIAM A. BOEGER
-------------------------------------------
*William A. Boeger
(Attorney-in-Fact)
</TABLE>
II-2
<PAGE>
CALYPTE BIOMEDICAL CORPORATION
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ------------- -----------------------------------------------------------------------------------------------------
<C> <S>
4.1 Common Stock Purchase Agreement between Calypte and the selling stockholders, dated March 26, 1999
5.1 Opinion of Heller Ehrman White & McAuliffe
23.1 Consent of Heller Ehrman White & McAuliffe (filed as part of Exhibit 5)
23.2 Consent of KPMG LLP, Independent Auditors
24.1 Power of Attorney (See page II-3)
</TABLE>
- ------------------------
<PAGE>
Exhibit 4.1
CALYPTE BIOMEDICAL CORPORATION
COMMON STOCK
PURCHASE AGREEMENT
March 26, 1999
<PAGE>
NOTICE TO PURCHASERS IN ALL STATES:
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION
OF THE ISSUER AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE
SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING
AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF
THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON
TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR
RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE
PERIOD OF TIME.
<PAGE>
COMMON STOCK
PURCHASE AGREEMENT
This Agreement ("Agreement") is made as of March 26, 1999 (the
"Effective Date"), by and among Calypte Biomedical Corporation, a Delaware
corporation (the "Company"), and each of those persons and entities,
severally and not jointly, listed as a Purchaser on the Schedule of
Purchasers attached as Exhibit A hereto. Such persons and entities are
hereinafter collectively referred to herein as "Purchasers" and each
individually as a "Purchaser."
AGREEMENT
In consideration of the mutual covenants contained in this Agreement,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Company and each Purchaser (severally and not jointly)
hereby agree as follows:
SECTION 1. AUTHORIZATION OF SALE OF THE SECURITIES.
Subject to the terms and conditions of this Agreement, the Company has,
or before the Closing (as defined below) will have, authorized the sale and
issuance of up to 3,398,000 shares of its Common Stock (the "Common Stock").
The shares of Common Stock sold hereunder shall be referred to herein as the
"Shares" or the "Securities."
SECTION 2. AGREEMENT TO SELL AND PURCHASE THE SECURITIES.
2.1 SALE OF SHARES. At the Closing (as defined in Section 3), the
Company will sell to each Purchaser, and each Purchaser will purchase from
the Company, at a purchase price of two dollars and twenty-five cents ($2.25)
per Share, the number of Shares set forth next to such Purchaser's name on
the Schedule of Purchasers attached hereto as Exhibit A (the "Schedule of
Purchasers").
2.2 SEPARATE AGREEMENT. Each Purchaser shall severally, and not
jointly, be liable for only the purchase of the Shares that appear on Exhibit
A hereto and that relate to such Purchaser. The Company's agreement with
each of the Purchasers is a separate agreement, and the sale of Shares to
each of the Purchasers is a separate sale. The obligations of each Purchaser
hereunder are expressly not conditioned on the purchase by any or all of the
other Purchasers of the Shares such other Purchasers have agreed to purchase.
<PAGE>
SECTION 3. CLOSING AND DELIVERY.
3.1 Closing. The Closing of the purchase and sale of the Shares
pursuant to this Agreement (the "Closing") shall be held as soon as
practicable after the effectiveness of the Registration Statement, as set
forth in Section 9.1(a) hereof, to be filed with the Securities and Exchange
Commission (the "SEC" or the "Commission"), and satisfaction or waiver of all
other conditions to Closing set forth in Sections 7 and 8 hereof, at the
offices of Heller Ehrman White & McAuliffe, 525 University Avenue, Palo Alto,
California 94301, or on such other date and place as may be agreed to by the
Company and the Purchasers.
The Company shall give at least one (1) business day prior written
notice to the Purchasers, in a manner provided for in Section 11 hereof, of
the date, time and location of the Closing. At or prior to the Closing, each
Purchaser shall execute any related agreements or other documents required to
be executed hereunder, dated as of the date of the Closing (the "Closing
Date").
3.2 DELIVERY OF THE SHARES AT THE CLOSING. At the Closing, the
Company shall deliver to each Purchaser stock certificates registered in the
name of such Purchaser, or in such nominee name(s) as designated by such
Purchaser, representing the number of shares of Common Stock to be purchased
by such Purchaser at the Closing as set forth in the Schedule of Purchasers
against payment of the purchase price for such shares. The name(s) in which
the stock certificates are to be issued to each Purchaser are set forth in
the Stock Certificate Questionnaire in the form attached hereto as Appendix I,
as completed by each Purchaser.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY.
Except as set forth on the Schedule of Exceptions attached hereto
as Exhibit B, the Company hereby represents and warrants as of the date
hereof to, and covenants with, the Purchasers as follows:
4.1 ORGANIZATION AND STANDING. The Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of Delaware, has full corporate power and authority to own or lease
its properties and conduct its business as presently conducted, and is duly
qualified as a foreign corporation and in good standing in all jurisdictions
in which the character of the property owned or leased or the nature of the
business transacted by it makes qualification necessary (except where the
failure to be so qualified would not have a material adverse effect on the
business, properties, financial condition or results or operations of the
Company). The Company has no subsidiaries or equity interest in any other
entity.
2
<PAGE>
4.2 CORPORATE POWER; AUTHORIZATION. The Company has all requisite
corporate power, and has taken all requisite corporate action, to execute and
deliver this Agreement, sell and issue the Shares and carry out and perform
all of its obligations under this Agreement. This Agreement constitutes the
legal, valid and binding obligation of the Company, enforceable in accordance
with its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights generally, (ii) as limited by equitable
principles generally, including any specific performance, and (iii) as to
those provisions of Section 9.3 relating to indemnity or contribution. The
execution and delivery of this Agreement does not, and the performance of
this Agreement and the compliance with the provisions hereof and the
issuance, sale and delivery of the Shares by the Company will not conflict
with, or result in a breach or violation of the terms, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of any lien pursuant to the terms of, the Certificate of
Incorporation or Bylaws of the Company or any statute, law, rule applicable
to the Company or regulation or any state or federal order, judgment or
decree applicable to the Company or any indenture, mortgage, lease or other
agreement or instrument to which the Company or any of its properties is
subject, where such conflict, breach or violation would have a material
adverse effect on the Company.
4.3 ISSUANCE AND DELIVERY OF THE SHARES. The Shares, when issued
and paid for in compliance with the provisions of this Agreement, will be
validly issued, fully paid and nonassessable. The issuance and delivery of
the Shares is not subject to preemptive, co-sale, right of first refusal or
any other similar rights of the shareholders of the Company or any liens or
encumbrances.
4.4 SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company has filed in
a timely manner all documents that the Company was required to file with the
SEC under Sections 13, 14(a) and 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), during the twelve (12) months
preceding the date of this Agreement. As of their respective filing dates
(or, if amended prior to the date of this Agreement, when amended), all
documents filed by the Company with the SEC (the "SEC Documents") complied in
all material respects with the requirements of the Exchange Act. None of the
SEC Documents as of their respective dates contained any untrue statement of
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Documents (the "Financial
Statements") comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the
SEC with respect thereto. The Financial Statements have been prepared in
accordance with generally accepted accounting principles consistently applied
and fairly present the financial position of the Company at the dates thereof
and
3
<PAGE>
the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal, recurring
adjustments).
4.5 INTELLECTUAL PROPERTY. Company owns or possesses adequate
rights to use all material patents, patent rights, inventions, trade secrets
and know-how described or referred to in the SEC Documents as owned or used
by it or that are necessary for the conduct of its business as presently
conducted and as described in the SEC Documents. Except as set forth in the
SEC Documents, the Company has not received any notice of, nor has any
knowledge of, any infringement of or conflict with asserted rights of others
with respect to any patent, patent right, invention, trade secret or know-how
that, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the
business, properties, financial condition or results or operations of the
Company.
4.6 CAPITALIZATION. All of the Company's outstanding shares of
capital stock have been duly authorized and validly issued and are fully paid
and nonassessable, have been issued in compliance with all federal and state
securities laws, and were not issued in violation of or subject to any
preemptive right or other rights to subscribe for or purchase securities.
The actual authorized and outstanding capital stock of the Company as of the
date hereof is as set forth in Exhibit B. Except as set forth in Exhibit B,
there are no outstanding options to purchase, or any preemptive rights or
other rights to subscribe for or to purchase, any securities or obligations
convertible into, or any contracts or commitments to issue or sell shares of
the company's capital stock or any such options, rights, convertible
securities or obligations.
4.7 LITIGATION. There is no pending or, to the Company's
knowledge, threatened, action, suit or other proceeding to which the Company
is a party or to which its property or assets are subject.
4.8 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, or local governmental authority on the part
of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement except for (a) compliance with
the securities and blue sky laws in the states and other jurisdictions in
which shares of Common Stock are offered and/or sold, which compliance will
be effected in accordance with such laws, and (b) the filing of a
registration statement and all amendments thereto with the SEC as
contemplated by Section 9.1 of this Agreement.
4.9 NO MATERIAL ADVERSE CHANGE. Since December 31, 1998, there
have not been any changes in the assets, liabilities, financial condition or
operations of the
4
<PAGE>
Company from that reflected in the Financial Statements except changes which
have not been, either individually or in the aggregate, materially adverse.
4.10 LISTING; MAINTENANCE OF LISTING. The Company's Common Stock
is traded on the Nasdaq SmallCap Market. For so long as the Company is
obligated to keep in effect the Registration Statement provided for in
Section 9 hereof, the Company will use its reasonable best efforts to
maintain its listing on the Nasdaq SmallCap Market, the Nasdaq National
Market or a national securities exchange, as defined in the Exchange Act.
SECTION 5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS.
5.1 REPRESENTATIONS AND WARRANTIES. Each Purchaser, severally and
not jointly, represents and warrants to and covenants with the Company that:
(a) Purchaser, taking into account the personnel and
resources it can practically bring to bear on the purchase of the Securities
contemplated hereby, either alone or together with the advice of such
Purchaser's purchaser representative, is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in shares presenting an investment decision like that involved in
the purchase of the Securities, including investments in securities issued by
the Company, and has requested, received, reviewed and considered, either
alone or with such Purchaser's purchaser representative, all information
Purchaser deems relevant (including the SEC documents) in making an informed
decision to purchase the Securities.
(b) Purchaser is acquiring the Securities being acquired by
Purchaser pursuant to this Agreement in the ordinary course of its business
and for its own account for investment only and with no present intention of
distributing any of such Securities or any arrangement or understanding with
any other persons regarding the distribution of such Securities, except in
compliance with Section 5.1(c).
(c) Purchaser will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the securities
purchased hereunder except in compliance with the Securities Act of 1933, as
amended (the "Securities Act"), applicable blue sky laws, and the rules and
regulations promulgated thereunder.
(d) Purchaser has completed or caused to be completed the
Stock Certificate Questionnaire and the Registration Questionnaire, attached
hereto as Appendix I and Appendix II, respectively, for use in preparation of
the Registration Statement to be filed by the Company, and the answers
thereto are true and correct as of the date hereof and will be true and
correct as of the effective date of the applicable
5
<PAGE>
Registration Statement (provided that Purchaser shall be entitled to update
such information by providing notice thereof to the Company prior to the
effective date of such Registration Statement).
(e) Purchaser has, in connection with its decision to
purchase the Securities, relied with respect to the Company and its affairs
solely upon the SEC Documents, the representations and warranties of the
Company contained herein and oral statements of the Company's management made
at meetings with the Purchaser.
(f) Purchaser is an "accredited investor" within the meaning
of Rule 501 of Regulation D promulgated under the Securities Act or a
Qualified Institutional Buyer within the meaning of Rule 144A promulgated
under the Securities Act.
(g) Purchaser has full right, power, authority and capacity
to enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution,
delivery and performance of this Agreement. Upon the execution and delivery
of this Agreement by Purchaser, this Agreement shall constitute a valid and
binding obligation of Purchaser, enforceable in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditors' rights generally, (ii) as limited by equitable principles
generally, including any specific performance, and (iii) as to those
provisions of Section 9.3 relating to indemnity or contribution.
5.2 RESTRICTION ON SHORT SALES. Purchaser represents and warrants
to and covenants with the Company that Purchaser has not engaged and will not
engage in any short sales of the Company's Common Stock prior to the
effectiveness of the Registration Statement, except to the extent that any
such short sale is fully covered by shares of Common Stock of the Company
other than the Shares.
5.3 NO ADVICE PROVIDED. Purchaser understands that nothing in
this Agreement or any other materials presented to Purchaser in connection
with the purchase and sale of the Shares constitutes legal, tax or investment
advice and that no independent legal counsel has reviewed these documents and
materials on Purchaser's behalf. Purchaser has consulted such legal, tax and
investment advisors as it, in its sole discretion, has deemed necessary or
appropriate in connection with its purchase of the Shares.
SECTION 6. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement,
all covenants, agreements, representations and warranties made by the Company
and each Purchaser herein and in the certificates for the securities
delivered pursuant hereto shall
6
<PAGE>
survive the execution of this Agreement, the delivery to the Purchasers of
the securities being purchased and the payment therefor.
SECTION 7. CONDITIONS TO COMPANY'S OBLIGATIONS AT THE CLOSING.
The Company's obligation to complete the sale and issuance of the
Securities and deliver shares of Common Stock to each Purchaser,
individually, as set forth in the Schedule of Purchasers shall be subject to
the following conditions to the extent not waived by the Company:
7.1 RECEIPT OF PAYMENT. The Company shall have received payment,
by check or wire transfer of immediately available funds, in the full amount
of the purchase price for the number of Shares being purchased by such
Purchaser at the Closing as set forth in the Schedule of Purchasers.
7.2 REGISTRATION STATEMENT EFFECTIVE. The Registration Statement
filed by the Company pursuant to Section 9 shall have become effective, and
no stop order suspending the effectiveness thereof shall have been issued and
no proceedings therefor shall be pending or threatened by the Securities and
Exchange Commission, ("the Commission").
7.3 REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties made by such Purchaser in Section 5 hereof shall be true and
correct when made, and shall be true and correct on the Closing Date.
SECTION 8. CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING.
Each Purchaser's obligation to accept delivery of the Shares and to pay
for the Shares shall be subject to the following conditions to the extent not
waived by such Purchaser:
8.1 REGISTRATION STATEMENT EFFECTIVE. The Registration Statement
required pursuant to Section 9 shall have become effective, and no stop order
suspending the effectiveness thereof shall have been issued and no
proceedings therefor shall be pending or threatened by the Commission.
8.2 REPRESENTATIONS AND WARRANTIES CORRECT. The representations
and warranties made by the Company in Section 4 hereof shall be true and
correct when made, and shall be true and correct on the Closing Date.
8.3 LEGAL OPINION. Purchasers shall have received from Heller
Ehrman White & McAuliffe, counsel to the Company, an opinion letter addressed
to the
7
<PAGE>
Purchasers, dated as of the Closing Date, covering the matters set forth in
Exhibit C hereto, subject to customary assumption and qualifications.
8.4 TERMINATION. This Agreement may be terminated by any
Purchaser with respect to such Purchaser only if the Closing has not
transpired by June 30, 1999.
SECTION 9. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT.
9.1 REGISTRATION PROCEDURES AND EXPENSES. The Company is
obligated to do the following:
(a) As soon as practicable following the Effective Date and
in any event no later than ten (10) days following the Effective Date, the
Company shall prepare and file with the Commission one or more registration
statements in order to register with the Commission the resale by the
Purchasers, from time to time, of the Shares through Nasdaq or the facilities
of any national securities exchange on which the Company's Common Stock is
then traded, or in privately-negotiated transactions (a "Registration
Statement"). The Company shall use its best efforts to cause such
Registration Statement to be declared effective as soon thereafter as
reasonably possible.
(b) The Company shall prepare and file with the Commission
(i) such amendments and supplements to the Registration Statement and the
prospectus used in connection therewith, (ii) such SEC Reports and (iii) such
other filings required by the Commission, in each case as may be necessary to
keep the Registration Statement continuously effective and not misleading
until the earliest of (A) the second anniversary date of the Closing, (B) such
date as all of the Shares have been resold or (C) such time as all of the
Shares held by the Purchasers can be sold within a given three-month period
pursuant to Rule 144 under the Securities Act. Notwithstanding the
foregoing, following the effectiveness of the Registration Statement, the
Company may, at any time, suspend the effectiveness of the Registration
Statement for up to no longer than 30 days, as appropriate (a "Suspension
Period"), by giving notice to the Purchasers, if the Company shall have
determined that the Company may be required to disclose any material
corporate development. The Company will use its best efforts to minimize the
length of any Suspension Period. Notwithstanding the foregoing, the Company
may not suspend the effectiveness of the Registration Statement more than
twice in any twelve (12) month period. Each Purchaser agrees that, upon
receipt of any notice from the Company of a Suspension Period, such Purchaser
will not sell any Shares pursuant to the Registration Statement until (i) such
Purchaser is advised in writing by the Company that the use of the applicable
prospectus may be resumed, (ii) such Purchaser has received copies of any
additional or supplemental or amended prospectus, if applicable, and (iii) such
Purchaser
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<PAGE>
has received copies of any additional or supplemental filings which are
incorporated or deemed to be incorporated by reference in such prospectus.
(c) In order to facilitate the public sale or other
disposition of all or any of the shares by each Purchaser, the Company shall
furnish to each Purchaser with respect to the Shares registered under the
Registration Statement such number of copies of prospectuses, prospectus
supplements and preliminary prospectuses as such Purchaser reasonably
requests in conformity with the requirements of the Securities Act.
(d) The Company shall file any documents required of the
Company for normal blue sky clearance in states specified in writing by each
Purchaser; provided, however, that the Company shall not be required to
qualify to do business or consent to service of process in any jurisdiction
in which it is not now so qualified or has not so consented.
(e) Other than fees and expenses, if any, of counsel or other
advisers to the Purchasers, which fees and expenses shall be borne by the
Purchasers, the Company shall bear all expenses (exclusive of any brokerage
fees, underwriting discounts and commissions) in connection with the
procedures in paragraphs (a) through (d) of this Section 9.1.
(f) With a view to making available to the Purchasers the
benefits of Rule 144 promulgated under the Securities Act ("Rule 144") and
any other rule or regulation of the SEC that may at any time permit a
Purchaser to sell Shares to the public without registration or pursuant to
registration, the Company covenants and agrees to: (i) make and keep public
information available, as those terms are understood and defined in Rule 144,
until the earlier of (A) the second anniversary of the Closing Date or (B) such
date as all of the Shares shall have been resold; (ii) file with the SEC in a
timely manner all reports and other documents required of the Company under
the Exchange Act; and (iii) furnish to any Purchaser upon request, as long as
the Purchaser owns any Shares, (A) a written statement by the Company that it
has complied with the reporting requirements of the Exchange Act, (B) a copy
of the most recent annual or quarterly report of the Company, and (C) such
other information as may be reasonably requested in order to avail any
Purchaser of any rule or regulation of the SEC that permits the selling of
any such Shares without registration under the Securities Act.
9.2 TRANSFER OF SECURITIES AFTER REGISTRATION. Each Purchaser
agrees that such Purchaser will not effect any disposition of the Shares that
would constitute a sale within the meaning of the Securities Act, except:
(i) pursuant to the Registration Statement, in which
case such Purchaser shall submit the certificates evidencing the Shares to
the Company's transfer agent, accompanied by a separate "Purchaser's
Certificate" (A) in the form of
9
<PAGE>
Appendix III attached hereto, (B) executed by such Purchaser or by an officer
of, or other authorized person designated by, such Purchaser, and (C) to the
effect that (1) the Shares have been sold in accordance with the Registration
Statement and (2) the requirement of delivering a current prospectus has been
satisfied; or
(ii) in a transaction exempt from registration under the
Securities Act, in which case such Purchaser shall, prior to effecting such
disposition, submit to the Company an opinion of counsel in form and
substance reasonably satisfactory to the Company to the effect that the
proposed transaction is in compliance with the Securities Act.
9.3 INDEMNIFICATION. As used in this Section 9.3 the following
terms shall have the following respective meanings:
(a) "Selling Shareholder" shall mean a Purchaser of
Securities under this Agreement and any transferee of such a Purchaser who is
entitled to resell Shares pursuant to the Registration Statement;
(b) "Registration Statement" shall include any final
prospectus, exhibit, supplement or amendment included in or relating to the
Registration Statement referred to in Section 9.1; and
(c) "Untrue Statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
The Company agrees to indemnify and hold harmless each Selling
Shareholder from and against any losses, claims, damages or liabilities to
which such Selling Shareholder may become subject (under the Securities Act
or otherwise) insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of, or are based upon,
any Untrue Statement on or after the effective date of the Registration
Statement, or on or after the date of any prospectus or prospectus supplement
or the date of any sale by Purchaser thereunder, or arise out of any failure
by the Company to fulfill any undertaking included in the Registration
Statement and the Company will reimburse such Selling Shareholder for any
reasonable legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim;
provided, however, that the Company shall not be liable to such Selling
Shareholder in any such case to the extent that such loss, claim, damage or
liability arises out of, or is based upon, an Untrue Statement made in such
Registration Statement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Selling
Shareholder specifically for use in preparation of the Registration
Statement, or the failure of such Selling Shareholder to comply with
10
<PAGE>
the covenants and agreements contained in Section 9.1 or 9.2 hereof
respecting sale of the Shares or any statement or omission in any Prospectus
that is corrected in any subsequent prospectus that was delivered to the
Selling Shareholder prior to the pertinent sale or sales by the Selling
Shareholder.
Each Purchaser, severally and not jointly, agrees to indemnify and hold
harmless the Company (and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, each officer of the
Company who signs the Registration Statement and each director of the
Company) from and against any losses, claims, damages or liabilities to which
the Company (or any such officer, director or controlling person) may become
subject (under the Securities Act or otherwise), insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, any failure to comply with the covenants and
agreements contained in Section 9.1 or 9.2 hereof respecting sale of the
Shares, or any Untrue Statement contained in the Registration Statement on or
after the effective date thereof, or in any prospectus supplement as of its
issue date or date of any sale by Purchaser thereunder, if such Untrue
Statement was made in reliance upon and in conformity with written
information furnished by or on behalf of such Purchaser specifically for use
in preparation of the Registration Statement, and such Purchaser will
reimburse the Company (or such officer, director or controlling person), as
the case may be, for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding
or claim; provided that in no event shall any indemnity by a Purchaser under
this Section 9.3 exceed the gross proceeds received by such Purchaser from
the sale of Shares covered by such Registration Statement.
Promptly after receipt by any indemnified person of a notice of a claim
or the beginning of any action in respect of which indemnity is to be sought
against an indemnifying person pursuant to this Section 9.3, such indemnified
person shall notify the indemnifying person in writing of such claim or of
the commencement of such action, and, subject to the provisions hereinafter
stated, in case any such action shall be brought against an indemnified
person and such indemnifying person shall have been notified thereof, such
indemnifying person shall be entitled to participate therein, and, to the
extent it shall wish, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified person. After notice from the indemnifying
person to such indemnified person of its election to assume the defense
thereof, such indemnifying person shall not be liable to such indemnified
person for any legal expenses subsequently incurred by such indemnified
person in connection with the defense thereof; provided, however, that if
there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the
same counsel to represent both the indemnified person and such indemnifying
person or any affiliate or associate thereof, the indemnified person shall be
entitled to retain its own counsel at the expense of such indemnifying
person; provided, however, that no indemnifying person shall be
11
<PAGE>
responsible for the fees and expenses of more than one separate counsel for
all indemnified parties.
9.4 TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions
precedent imposed by Section 4, Section 5 or this Section 9 upon the
transferability of the Shares shall cease and terminate as to any particular
number of the Shares when such Shares shall have been sold or otherwise
disposed of in accordance with the intended method of disposition set forth
in the Registration Statement covering such Shares or at such time as an
opinion of counsel satisfactory to the Company shall have been rendered to
the effect that such conditions are not necessary in order to comply with the
Securities Act.
9.5 INFORMATION AVAILABLE. So long as the Registration Statement
is effective covering the resale of Shares owned by the Purchasers, the
Company will furnish to the Purchasers:
(a) upon request of any Purchaser, as soon as practicable
after available (but in the case of the Company's Annual Report to
Shareholders, within 150 days after the end of each fiscal year of the
Company), one copy of (i) its Annual Report to Shareholders (which Annual
Report shall contain financial statements audited in accordance with
generally accepted auditing standards certified by a national firm of
certified public accountants); (ii) its Annual Report on Form 10-K; (iii) its
quarterly reports on Form 10-Q (the foregoing, in each case, excluding
exhibits); (iv) its Proxy Statement; and (v) its current reports on Form 8-K,
if any;
(b) upon the request of any Purchaser, all exhibits excluded
by the parenthetical to subparagraph (a)(iii) of this Section 9.5, in the
form generally available to the public; and
(c) upon the reasonable request of any Purchaser, an adequate
number of copies of the prospectuses and supplements to supply to any other
party requiring such prospectuses.
9.6 CHANGES IN PURCHASER INFORMATION. Each Purchaser agrees to
promptly notify the Company of any changes in the information set forth in
the Registration Statement regarding Purchaser or such Purchaser's plan of
distribution set forth in such Registration Statement.
SECTION 10. BROKER'S FEE.
The Company and each Purchaser (severally and not jointly) hereby
represent that, except for amounts to be paid to the Placement Agent by the
Company as described in Section 12.8 hereof, there are no brokers or finders
entitled to compensation in
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<PAGE>
connection with the sale of the Shares, and shall indemnify each other for
any such fees for which they are responsible.
SECTION 11. NOTICES.
All notices, requests, consents and other communications hereunder shall
be in writing, shall be sent by confirmed facsimile or mailed by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, and shall be deemed given when so sent in the case
of facsimile transmission, or when so received in the case of mail or
courier, and addressed as follows:
(a) if to the Company, to:
Calypte Biomedical Corporation
1440 Fourth Street
Berkeley, California 94710
Attention: President and Chief Executive Officer
Facsimile: (510) 814-8408
with a copy so mailed to:
Heller Ehrman White & McAuliffe
525 University Avenue
Palo Alto, California 94301
Attention: Bruce W. Jenett, Esq.
Facsimile: (650) 324-0638
or to such other person at such other place as the Company shall
designate to the Purchasers in writing; and
(b) if to the Purchasers, at the address as set forth at the
end of this Agreement, or at such other address or addresses as may have been
furnished to the Company in writing.
SECTION 12. MISCELLANEOUS.
12.1 WAIVERS AND AMENDMENTS. Neither this Agreement nor any
provision hereof may be changed, waived, discharged, terminated, modified or
amended except upon the written consent of the Company and holders of at
least a majority of the Shares.
12.2 HEADINGS. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not
be deemed to be part of this Agreement.
13
<PAGE>
12.3 SEVERABILITY. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
12.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California as applied
to contracts entered into and performed entirely in California by California
residents, without regard to conflicts of law principles.
12.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.
12.6 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto.
12.7 ENTIRE AGREEMENT. This Agreement and other documents
delivered pursuant hereto, including the exhibits, constitute the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.
12.8 PAYMENT OF FEES AND EXPENSES. Each of the Company and the
Purchasers shall bear its own expenses and legal fees incurred on its behalf
with respect to this Agreement and the transactions contemplated hereby (the
"Offering"); provided, that the Company shall reimburse the placement agent
retained by it in connection with the Offering (the "Placement Agent") for
certain fees and expenses incurred by the Placement Agent in connection with
the Offering. Purchasers acknowledge that the Placement Agent will receive
compensation. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled
to reasonable attorney's fees, costs and necessary disbursements in addition
to any other relief to which such party may be entitled.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year
first above written.
CALYPTE BIOMEDICAL CORPORATION
By: /s/ William Boeger
------------------------------
14
<PAGE>
Name: William Boeger
Title: President and Chief Executive Officer
PURCHASER
Purchaser Name: /s/ PURCHASERS
---------------------------
By: _______________________________________
Name: ____________________________________
Title: ____________________________________
Address: ____________________________________
____________________________________
____________________________________
Facsimile: ____________________________________
15
<PAGE>
APPENDIX I
CALYPTE BIOMEDICAL CORPORATION
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to ___________________________
be registered in (this is the name that will
appear on your stock certificate(s)). You
may use a nominee name if appropriate:
2. The relationship between the Purchaser ___________________________
of the Securities and the Registered
Holder listed in response to item 1
above:
3. The mailing address, telephone and facsimile ___________________________
number of the Registered Holder listed
in response to item 1 above: ___________________________
Telephone: ________________
Facsimile: ________________
4. The Social Security Number or Tax ___________________________
Identification Number of the Registered
Holder listed in the response to item 1
above:
Signature: ______________________________
Print Name: _____________________________
Title: __________________________________
<PAGE>
APPENDIX II
CALYPTE BIOMEDICAL CORPORATION
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Please state your or your organization's name exactly as it should
appear in the Registration Statement:
2. Please provide the following information, as of March 25, 1999:
Number of Shares that you are purchasing Number of shares of Common Stock
and seek to include in the Registration that you already beneficially
Statement own or that you are purchasing
and do NOT seek to include in
the Registration Statement
----------- -----------
----------- -----------
3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or its
affiliates other than as disclosed in the Proxy Statement in connection with
the Company's 1998 Annual Meeting of Shareholders?
Yes ___ No ___
If yes, please indicate the nature of any such relationships: _________
________________________________________________________________________________
Signature: ______________________________
Print Name: _____________________________
Title: __________________________________
<PAGE>
APPENDIX III
PURCHASER'S CERTIFICATE OF RESALE OF THE SHARES
The undersigned, an officer of, or other person duly authorized by
______________________________________ [fill in official name of individual or
institution] hereby certifies that he/she [said institution] is the Purchaser
of the Shares evidenced by the attached stock certificate(s) and as such,
sold such Shares on ________________ [date] in accordance with registration
statement number _________________________________ [fill in the number of or
otherwise identify registration statement] and the requirement of delivering
a current prospectus and current annual, quarterly and reports (Forms 10-K,
10-Q, and 8-K) by the Company has been complied with in connection with such
sale.
Print or Type:
Name of Purchaser (Individual or Institution): _________________________________
Name of Individual representing Purchaser
(if an Institution): _________________________________
Title of Individual representing Purchaser
(if an Institution): _________________________________
Signature by:
Individual Purchaser or Individual
representing Purchaser: _________________________________
<PAGE>
EXHIBIT 5.1
24073-0001
March 29, 1999
Calypte Biomedical Corporation
1440 Fourth Street
Berkeley, California 94710
REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as counsel to Calypte Biomedical Corporation, a
Delaware corporation (the "Company"), in connection with the Registration
Statement on Form S-3 (the "Registration Statement") to be filed with the
Securities and Exchange Commission on or about March 29, 1999, for the
purpose of registering under the Securities Act of 1933, as amended,
3,798,000 shares of its Common Stock, $.001 par value (the "Shares"). Of the
shares being registered, 3,398,000 Shares are issuable pursuant to the Common
Stock Purchase Agreement, of the shares being registered, dated March 26,
1999, (the "Common Stock Agreement") among the Company and the purchasers
named therein and 400,000 shares have been issued pursuant to the Asset
Purchase Agreement dated November 18, 1998 between the Company and Cambridge
Biotech Corporation (the "Cambridge Agreement").
In connection with this opinion, we have assumed the authenticity
of all records, documents and instruments submitted to us as originals, the
genuineness of all signatures, the legal capacity of natural persons and the
conformity to the originals of all records, documents and instruments
submitted to us as copies. We have based our opinion upon our review of the
following records, documents and instruments:
(a) The Certificate of Incorporation of the Company certified by the
Secretary of State of the State of Delaware as of October 28,
1998 and certified to us by the Vice President of Finance, Chief
Financial Officer and Secretary of the Company as being complete
and in full force and effect as of the date of this opinion;
(b) The By-laws of the Company certified to us by the Vice President
of Finance, Chief Financial Officer and Secretary of the Company
as being complete and in full force and effect as of the date of
this opinion;
<PAGE>
Page 2
(c) Records certified to us by an officer of the Company as
constituting all records of proceedings and actions of the Board
of Directors of the Company relating to the issuance of the
Shares;
(d) A letter from ChaseMellon Shareholder Services L.L.C., the
Company's Transfer Agent, dated March 26, 1999 as to the number
of shares of Common Stock that were outstanding as of March
25, 1999;
(e) The Registration Statement;
(f) The Common Stock Agreement; and
(g) The Cambridge Agreement.
This opinion is limited to the federal law of the United States of
America and the General Corporation Law of the State of Delaware. We
disclaim any opinion as to any other statute, rule, regulation, ordinance,
order or other promulgation of any other jurisdiction or any regional or
local governmental body.
Our opinion expressed herein assumes that the Common Stock
Agreement and the Cambridge Agreement were duly authorized, executed and
delivered by the parties thereto in the form that we have reviewed as of the
date of this opinion, and that the full consideration stated in the Common
Stock Agreement and the Cambridge Agreement and set by Board of Directors
when authorizing the issuance of the Shares will be paid and/or transferred.
Based upon the foregoing and our examination of such questions of
law as we have deemed necessary or appropriate for the purpose of this
opinion and assuming that (i) the Registration Statement becomes and remains
effective during the period when the Shares are offered and sold; (ii) the
Shares are issued in accordance with the terms of the Common Stock Agreement,
the Cambridge Agreement and the resolutions authorizing their issuance; (iii)
appropriate stock certificates evidencing the Shares are executed and
delivered; and (iv) all applicable securities laws are complied with, it is
our opinion that the Shares are duly authorized and validly issued, and are
fully paid and nonassessable.
This opinion is rendered to you in connection with the Registration
Statement and is solely for your benefit. This opinion may not be relied
upon by you for any other purpose, or relied upon by any other person, firm,
corporation or other entity for any purpose, without our prior written
consent. We disclaim any obligation to advise
<PAGE>
Page 3
you of any change of law that occurs, or any facts which we become aware
after the date of this opinion.
<PAGE>
Page 4
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
/s/ Heller, Ehrman, White & McAuliffe
--------------------------------------
HELLER, EHRMAN, WHITE & MCAULIFFE
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Calypte Biomedical Corporation:
We consent to the incorporation by reference herein of our report dated
February 5, 1999, relating to the consolidated balance sheets of Calypte
Biomedical Corporation and subsidiary as of December 31, 1998, and 1997, and
the related consolidated statements of operations, stockholders' equity
(deficit), and cash flows for each of the years in the three-year period
ended December 31, 1998, which report appears in the December 31, 1998,
annual report on Form 10-K of Calypte Biomedical Corporation, and to the
reference to our firm under the heading "Experts" in the prospectus.
Our report dated February 5, 1999 contains an explanatory paragraph that
states that the Company has suffered recurring losses from operations and has
an accumulated deficit, which raise substantial doubt about its ability to
continue as a going concern. The consolidated financial statements do not
include any adjustments that might result from the outcome of that uncertainty.
San Francisco, California
March 29, 1999
