Exhibit 10.1
9,171,429 SHARES
HALOZYME THERAPEUTICS, INC.
SHARES OF COMMON STOCK
($0.001 PAR VALUE)
PLACEMENT AGENT AGREEMENT
December 12, 2005
SG COWEN & CO., LLC
RODMAN & RENSHAW, LLC
ROTH CAPITAL PARTNERS, LLC
c/o SG Cowen & Co., LLC
1221 Avenue of the Americas
New York, New York 10020
Dear Sirs:
Halozyme Therapeutics, Inc., a Nevada corporation (the "COMPANY"),
proposes to sell to the Purchasers, pursuant to the terms of this Placement
Agent Agreement (this "AGREEMENT") and the Subscription Agreements in the form
of Exhibit A attached hereto (the "SUBSCRIPTION AGREEMENTS") entered into with
the Purchasers identified therein (each a "PURCHASER" and, collectively, the
"PURCHASERS"), an aggregate of 9,171,429 shares of Common Stock, $0.001 par
value (the "COMMON STOCK"), of the Company. The aggregate of 9,171,429 shares so
proposed to be sold is hereinafter referred to as the "STOCK." The Company
hereby confirms its agreement with the placement agents named on Schedule I
attached hereto (the "PLACEMENT Agents"), as set forth below. SG Cowen & Co.,
LLC is acting as the representative of the Placement Agents and in such capacity
is hereinafter referred to as the "REPRESENTATIVE." Certain terms used herein
are defined in Section 14 hereof.
1. AGREEMENT TO ACT AS PLACEMENT AGENTS; PLACEMENT OF SECURITIES. On the basis
of the representations, warranties and agreements of the Company and its
Subsidiary (as defined below) herein contained, and subject to all the terms and
conditions of this Agreement:
(a) The Company hereby authorizes the Placement Agents to act as its
exclusive agents to solicit offers for the purchase of all or part of
the Stock from the Company in connection with the proposed offering of
the Stock (the "OFFERING"). Until the Closing Date (as defined in
Section 3 hereof), the Company shall not, without the prior consent of
the Representative, solicit or accept offers to purchase the Stock
otherwise than through the Placement Agents.
(b) The Placement Agents agree, as agents of the Company, to use their
commercially reasonable efforts to solicit offers to purchase the Stock
from the Company on the terms and subject to the conditions set forth
in the Base Prospectus (as defined below) and the Prospectus Supplement
(as defined below). The Placement Agents shall make commercially
reasonable efforts to assist the Company in obtaining performance by
each Purchaser whose offer to purchase Stock has been solicited by the
Placement Agents and accepted by the Company, but the Placement Agents
shall not, except as otherwise provided in this Agreement, be obligated
to disclose the identity of any potential purchaser or have any
liability to the Company in the event any such purchase is not
consummated for any reason. Under no circumstances will the Placement
Agents be obligated to purchase any Stock for its own account and, in
soliciting purchases of Stock, the Placement Agents shall act solely as
the Company's agent and not as principals. Notwithstanding the
foregoing and except as otherwise provided in Section 1(c), it is
understood and agreed that the Placement Agents (or their affiliates)
may, solely at their discretion and without any obligation to do so,
purchase Stock as principals.
(c) Subject to the provisions of this Section 1, offers for the
purchase of Stock may be solicited by the Placement Agents as agents
for the Company at such times and in such amounts as the Placement
Agents deem advisable. Each Placement Agent shall communicate to the
Company, orally or in writing, each reasonable offer to purchase Stock
received by it as agent of the Company. The Company shall have the sole
right to accept offers to purchase the Stock and may reject any such
offer, in whole or in part. Each Placement Agent shall have the right,
in its discretion reasonably exercised, without notice to the Company,
to reject any offer to purchase Stock received by it, in whole or in
part, and any such rejection shall not be deemed a breach of its
agreement contained herein.
(d) The purchases of the Stock by the Purchasers shall be evidenced by
the execution of the Subscription Agreements by each of the parties
thereto.
(e) As compensation for services rendered, on the Closing Date the
Company shall pay to the Placement Agents by wire transfer of
immediately available funds to an account or accounts designated by the
Representative, an amount equal to seven percent (7%) of the gross
proceeds received by the Company from the sale of the Stock on such
Closing Date.
(f) No Stock which the Company has agreed to sell pursuant to this
Agreement shall be deemed to have been purchased and paid for, or sold
by the Company, until such Stock shall have been delivered to the
Purchaser thereof against payment by such Purchaser. If the Company
shall default in its obligations to deliver Stock to a Purchaser whose
offer it has accepted, the Company shall indemnify and hold the
Placement Agents harmless against any loss, claim or damage arising
from or as a result of such default by the Company.
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2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ITS SUBSIDIARY. The Company
and its Subsidiary represent and warrant to, and agrees with, the several
Placement Agents and the Purchasers that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and has
filed with the Securities and Exchange Commission (the "COMMISSION") a
registration statement on such form (Registration File No. 333-125731),
which became effective as of June 17, 2005, for the registration under
the Securities Act of the Stock. Such registration statement meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act
and complies with said Rule. The Company will file with the Commission
pursuant to Rule 424(b) under the Securities Act, and the rules and
regulations (the "RULES AND REGULATIONS") of the Commission promulgated
thereunder, a supplement to the form of prospectus included in such
registration statement relating to the placement of the Stock and the
plan of distribution thereof and has advised the Representative of all
further information (financial and other) with respect to the Company
required to be set forth therein. Such registration statement,
including the exhibits thereto, as amended at the date of this
Agreement, is hereinafter called the "REGISTRATION STATEMENT"; such
prospectus in the form in which it appears in the Registration
Statement is hereinafter called the "BASE PROSPECTUS"; and the
supplemented form of prospectus, in the form in which it will be filed
with the Commission pursuant to Rule 424(b) (including the Base
Prospectus as so supplemented) is hereinafter called the "PROSPECTUS
SUPPLEMENT." Any reference herein to the Registration Statement, the
Base Prospectus or the Prospectus Supplement shall be deemed to refer
to and include the documents incorporated by reference therein,
including all exhibits thereto (the "INCORPORATED DOCUMENTS") pursuant
to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), on or before the date of
this Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be; and any reference herein to
the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, the Base Prospectus or the Prospectus
Supplement shall be deemed to refer to and include the filing of any
document under the Exchange Act after the date of this Agreement, or
the issue date of the Base Prospectus or the Prospectus Supplement, as
the case may be, deemed to be incorporated therein by reference. All
references in this Agreement to financial statements and schedules and
other information which is "contained," "included," "described," "set
forth" or "stated" in the Registration Statement, the Base Prospectus
or the Prospectus Supplement (and all other references of like import)
shall be deemed to mean and include all such financial statements and
schedules and other information which is or is deemed to be
incorporated by reference in the Registration Statement, the Base
Prospectus or the Prospectus Supplement, as the case may be. No stop
order suspending the effectiveness of the Registration Statement or the
use of the Base Prospectus or the Prospectus Supplement has been
issued, and no proceeding for any such purpose is pending or has been
initiated or, to the Company's knowledge, is threatened by the
Commission. For purposes of this Agreement, "FREE WRITING PROSPECTUS"
has the meaning set forth in Rule 405 under the Securities Act and the
"TIME OF SALE PROSPECTUS" means the
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preliminary prospectus, if any, together with the free writing
prospectuses, if any, used in connection with the Offering, including
any documents, incorporated by reference therein.
(b) The Registration Statement (and any further documents to be filed
with the Commission) contains all exhibits and schedules as required by
the Securities Act. Each of the Registration Statement and any
post-effective amendment thereto, at the time it became effective,
complied in all material respects with the Securities Act and the
Exchange Act and the applicable Rules and Regulations and did not and,
as amended or supplemented, if applicable, will not, contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading. The Base Prospectus, the Time of Sale Prospectus, if any,
and the Prospectus Supplement, each as of its respective date, comply
in all material respects with the Securities Act and the Exchange Act
and the applicable Rules and Regulations. Each of the Base Prospectus,
the Time of Sale Prospectus, if any, and the Prospectus Supplement, as
amended or supplemented, did not and will not contain as of the date
thereof any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
The Incorporated Documents, when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange
Act and the applicable Rules and Regulations, and none of such
documents, when they were filed with the Commission, contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the Base
Prospectus, the Time of Sale Prospectus, if any, or Prospectus
Supplement, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange
Act and the applicable Rules and Regulations, as applicable, and will
not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein not misleading.
Notwithstanding the foregoing, the Company makes no representations or
warranties as to information, if any, contained in or omitted from the
Time of Sale Prospectus, if any, or the Prospectus Supplement or any
amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of any Placement Agent specifically for use in the
Registration Statement, the Time of Sale Prospectus, if any, or the
Prospectus Supplement, which information the parties hereto agree is
limited to the Placement Agents' Information as defined in Section 16.
No post-effective amendment to the Registration Statement reflecting
any facts or events arising after the date thereof which represent,
individually or in the aggregate, a fundamental change in the
information set forth therein is required to be filed with the
Commission. There are no documents required to be filed with the
Commission in connection with the transaction contemplated hereby that
(x) have not been filed as required pursuant to the Securities Act or
(y) will not be filed within the requisite time period. There are no
contracts or other documents required to be described in the Base
Prospectus, the Time of Sale Prospectus, if any, or Prospectus
Supplement, or to be filed as exhibits or
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schedules to the Registration Statement, which have not been described
or filed as required.
(c) The Company is eligible to use free writing prospectuses in
connection with the Offering pursuant to Rules 164 and 433 under the
Securities Act. Any free writing prospectus that the Company is
required to file pursuant to Rule 433(d) under the Securities Act has
been, or will be, filed with the Commission in accordance with the
requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free writing prospectus
that the Company has filed, or is required to file, pursuant to Rule
433(d) under the Securities Act or that was prepared by or behalf of or
used by the Company complies or will comply in all material respects
with the requirements of the Securities Act and the applicable rules
and regulations of the Commission thereunder. The Company will not,
without the Representative's consent, prepare, use or refer to, any
free writing prospectus.
(d) The Company has delivered, or will as promptly as practicable
deliver, to the Representative complete conformed copies of the
Registration Statement and of each consent and certificate of experts
filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits) and the Base Prospectus, the Time of Sale
Prospectus, if any, and the Prospectus Supplement, as amended or
supplemented, in such quantities and at such places as the
Representative reasonably requests. Neither the Company nor any of its
directors and officers has distributed and none of them will
distribute, prior to the completion of the distribution of Stock, any
offering material in connection with the offering and sale of the Stock
other than the Base Prospectus, the Time of Sale Prospectus, if any,
the Prospectus Supplement, the Registration Statement, copies of the
documents incorporated by reference therein and any other materials
permitted by the Securities Act.
(e) Each of the Company and Halozyme, Inc., a wholly-owned subsidiary
of the Company (the "SUBSIDIARY"), have been duly organized and are
validly existing as corporations or other legal entities in good
standing (or the equivalent thereof, if any) under the laws of their
respective jurisdictions of incorporation, are duly qualified to do
business and are in good standing (or the equivalent thereof, if any)
as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the
failure to be so qualified and in good standing or have such power or
authority would not have, singularly or in the aggregate, a material
adverse effect on the condition (financial or otherwise), results of
operations, business, properties or prospects of the Company and its
Subsidiary taken as a whole (a "MATERIAL ADVERSE EFFECT").
(f) The Stock to be issued and sold by the Company hereunder and under
the Subscription Agreements has been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and validly issued, fully paid and nonassessable and free
of any preemptive or
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similar rights. The Stock conforms to the description thereof contained
in the Base Prospectus, the Prospectus Supplement and the Time of Sale
Prospectus, if any.
(g) The Company has an authorized capitalization as set forth in the
Base Prospectus, the Prospectus Supplement and the Time of Sale
Prospectus, if any, all of the issued and outstanding shares of capital
stock of the Company have been duly and validly authorized and issued,
are fully paid and non-assessable, have been issued in compliance with
federal and state securities laws, and conform to the description
thereof contained in the Base Prospectus, the Prospectus Supplement and
the Time of Sale Prospectus, if any. None of the outstanding shares of
Common Stock was issued in violation of any preemptive rights, rights
of first refusal or other similar rights to subscribe for or purchase
securities of the Company. There are no authorized or outstanding
options, warrants, preemptive rights, rights of first refusal or other
rights to purchase, or equity or debt securities convertible into or
exchangeable or exercisable for, any capital stock of the Company that
have been granted by the Company other than: (i) those accurately
described in the Base Prospectus or ii) those issued pursuant to
existing stock option plans. The description of the Company's stock
option, stock bonus and other stock plans or arrangements, and the
options or other rights granted thereunder, as described in the Base
Prospectus, completely, accurately and fairly present the information
required to be shown with respect to such plans, arrangements, options
and rights.
(h) All the outstanding shares of capital stock of the Subsidiary have
been duly authorized and validly issued, are fully paid and
non-assessable and, except to the extent set forth in the Base
Prospectus, are owned directly by the Company, free and clear of any
claim, lien, encumbrance, security interest, defect or restriction upon
voting or transfer or any other claim of any kind ("LIENS").
(i) The Company has the full right, power and authority to enter into
this Agreement and each of the Subscription Agreements and to perform
and to discharge its obligations hereunder and thereunder; and each of
this Agreement and each of the Subscription Agreements has been duly
authorized, executed and delivered by the Company, and constitutes a
valid and binding obligation of the Company enforceable in accordance
with its terms, except as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally and except as enforceability may
be subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and
except as the indemnification agreements of the Company herein may be
legally unenforceable.
(j) The execution, delivery and performance of this Agreement and the
Subscription Agreements by the Company and the consummation of the
transactions contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other
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agreement or instrument to which the Company or its Subsidiary is a
party or by which the Company or its Subsidiary is bound or to which
any of the property or assets of the Company or its Subsidiary is
subject, except any such conflicts, breaches or violations which would
not reasonably be expected to have a Material Adverse Effect, nor will
such actions result in any violation of the provisions of the charter
or bylaws of the Company or its Subsidiary or any statute, law, rule or
regulation or any judgment, order or decree of any court or
governmental agency or body having jurisdiction over the Company or its
Subsidiary or any of their properties or assets.
(k) There is no franchise, contract, lease, instrument or other
document of a character required by the Securities Act or the Rules and
Regulations to be described in the Base Prospectus or the Prospectus
Supplement, or to be filed as an exhibit to the Registration Statement,
which is not described or filed as required; and all statements
summarizing any such franchises, contracts, leases, instruments or
other documents or legal matters contained in the Registration
Statement are accurate and complete in all material respects, except as
redacted pursuant to confidential treatment requests. Other than as
described in the Base Prospectus, no such franchise, contract, lease,
instrument or other document has been suspended or terminated for
convenience or default by the Company or its Subsidiary or any of the
other parties thereto, neither the Company or its Subsidiary has sent
or received any communication regarding intent not to renew any such
franchise, contract, lease, instrument or other document, and neither
the Company nor its Subsidiary has received notice or any other
knowledge of any such pending or threatened suspension, termination or
non-renewal, except for such pending or threatened suspensions,
terminations or non-renewals that would not reasonably be expected to,
singularly or in the aggregate, have a Material Adverse Effect.
(l) All existing minute books of the Company and its Subsidiary,
including all existing records of all meetings and actions of the board
of directors (including, Audit, Compensation, Nominating and Governance
and other board committees) and stockholders of the Company through the
date of the latest meeting and action (collectively, the "CORPORATE
RECORDS") have been made available to the Placement Agents and counsel
for the Placement Agents. All such Corporate Records are complete and
accurately reflect, in all material respects, all transactions referred
to in such Corporate Records. There are no material transactions,
agreements or other actions of the Company or its Subsidiary that are
not properly approved and/or recorded in the Corporate Records.
(m) No consent, approval, authorization, filing with or order of or
registration with, any court or governmental agency or body is required
in connection with the transactions contemplated herein or in the
Subscription Agreements, except such as have been obtained or made (or
will be timely obtained or made) under the Securities Act or the
Exchange Act and such as may be required under the securities, or blue
sky, laws of any jurisdiction in connection with the offer and sale of
the Stock by the Company in the manner contemplated herein and in the
Base Prospectus and the Prospectus Supplement.
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(n) Except as described in the Base Prospectus, (i) no person has the
right, contractual or otherwise, to cause the Company to issue or sell
to it any shares of Common Stock or shares of any other capital stock
or other equity interests of the Company, (ii) no person has any
preemptive rights, resale rights, rights of first refusal or other
rights to purchase from the Company any shares of Common Stock or
shares of any other capital stock or other securities of the Company,
and (iii) except as provided herein, no person has the right to act as
an underwriter, placement agent or financial advisor to the Company in
connection with and as a result of the offer and sale of the Stock, in
the case of each of the foregoing clauses (i), (ii) and (iii), whether
as a result of the filing or effectiveness of the Registration
Statement or the sale of the Stock as contemplated thereby or
otherwise; no person has the right, contractual or otherwise, to cause
the Company to register under the Securities Act any shares of Common
Stock or shares of any other capital stock or other securities of the
Company, or to include any such shares or interests in the Registration
Statement or the offering contemplated thereby, whether as a result of
the filing or effectiveness of the Registration Statement or the sale
of the Stock as contemplated thereby or otherwise, except for persons
and entities who have had their shares already registered under the
Securities Act, who have expressly waived such right or who have been
given timely and proper notice and have failed to exercise such right
within the time or times required under the terms and conditions of
such right, and the Company is not required to file any registration
statement for the registration of any securities of any person or
register any such securities pursuant to any other registration
statement filed by the Company under the Securities Act for a period of
at least 180 days after the date hereof.
(o) The financial statements, together with the related notes and
schedules, of the Company included in the Base Prospectus, the
Prospectus Supplement or the Registration Statement, the Time of Sale
Prospectus, if any, or incorporated by reference therein, as the case
may be, present fairly the financial condition, results of operations
and cash flows of the Company and its consolidated subsidiary as of the
dates and for the periods indicated, comply in all material respects
with the Securities Act and the Rules and Regulations thereunder, and
have been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved; provided, however, that statements that are unaudited are
subject to year-end adjustments and do not contain notes required under
generally accepted accounting principles. No other financial statements
or supporting schedules or exhibits are required by the Securities Act
or the Rules and Regulations thereunder to be included in the Base
Prospectus, the Prospectus Supplement or the Registration Statement,
the Time of Sale Prospectus, if any, or incorporated by reference
therein, as the case may be.
(p) Except as set forth in the Base Prospectus, there is no legal or
governmental proceeding pending to which the Company or its Subsidiary
is a party or of which any property or assets of the Company or its
Subsidiary is the subject which is required to be described in the Base
Prospectus, and is not described therein, or which, singularly or in
the aggregate, if determined adversely to the Company or its
Subsidiary, might have a Material Adverse
8
Effect or would prevent or adversely affect the ability of the Company
or its Subsidiary to perform its obligations under this Agreement; and
to the best of the Company's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others.
(q) The Company and its Subsidiary have good and marketable title to
all property (real and personal) described in the Registration
Statement, the Base Prospectus and the Prospectus Supplement and the
Time of Sale Prospectus, if any as being owned by the Company or its
Subsidiary, free and clear of any Liens, except for those Liens that do
not materially interfere with the use made or proposed to be made of
such property by the Company or its Subsidiary or that would not have a
Material Adverse Effect; all the property described in the Registration
Statement, the Base Prospectus the Time of Sale Prospectus, if any, and
the Prospectus Supplement as being held under lease by the Company or
its Subsidiary is held thereby under valid, subsisting and enforceable
leases except where the failure to be valid, subsisting or enforceable
would not have a Material Adverse Effect.
(r) Neither the Company nor its Subsidiary is (i) in violation of any
provision of its charter or bylaws, (ii) in default in any respect, and
no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance
of any term, covenant, or condition of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is
a party or by which it is bound or to which any of its property or
assets is subject, or (iii) in violation in any respect of any statute,
law, rule, regulation, ordinance, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company or
its Subsidiary, or any of their properties, as applicable (including,
without limitation, those administered by the Food and Drug
Administration of the U.S. Department of Health and Human Services (the
"FDA") or by any foreign, federal, state or local governmental or
regulatory authority performing functions similar to those performed by
the FDA), except, with respect to clauses (ii) and (iii), any
violations or defaults which, singularly or in the aggregate, would not
have a Material Adverse Effect.
(s) The contracts described in the Company's regular reports on Forms
10-Q, 10-K, and 8-K as filed by the Company with the Commission or
incorporated by reference therein that are material to the Company are
in full force and effect on the date hereof, and neither the Company
nor, to the Company's knowledge, any other party to such contracts is
in breach of or default under any of such contracts which would have a
Material Adverse Effect.
(t) No labor problem or dispute with the employees of the Company or
its Subsidiary exists or, to the Company's knowledge, is threatened or
imminent, which might be expected to have a Material Adverse Effect.
Neither the Company nor its Subsidiary is aware that any key employee
of the Company or its Subsidiary or significant group of employees of
the Company or its
9
Subsidiary plans to terminate employment with the Company or its
Subsidiary.
(u) Each of the Company and its Subsidiary has fulfilled its
obligations, if any, under the minimum funding standards of Section 302
of the United States Employee Retirement Income Security Act of 1974
("ERISA") and the regulations and published interpretations thereunder
with respect to each "PLAN" (as defined in Section 3(3) of ERISA and
such regulations and published interpretations) in which employees of
the Company and its Subsidiary are eligible to participate and each
such plan is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations. No "PROHIBITED TRANSACTION" (as defined in Section 406
of ERISA, or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the "CODE")) has occurred with respect to
any employee benefit plan which could have a Material Adverse Effect.
Each of the Company and its Subsidiary has not incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than for
the payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA. Each "PENSION PLAN" (as defined in ERISA) for
which the Company or its Subsidiary would have any liability that is
intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which could cause the loss of such
qualification.
(v) The Company and its Subsidiary maintain insurance in such amounts
and covering such risks as is adequate for the conduct of its business
and the value of its properties and as is customary for companies
engaged in similar businesses in similar industries; all such insurance
is fully in force on the date hereof and will be fully in force on the
Closing Date.
(w) Each of the Company and its Subsidiary has made all filings,
applications and submissions required by, and possesses all approvals,
licenses, certificates, certifications, clearances, consents,
exemptions, marks, notifications, orders, permits and other
authorizations issued by, the appropriate federal, state or foreign
regulatory authorities (including, without limitation, the FDA, and any
other foreign, federal, state or local government or regulatory
authorities performing functions similar to those performed by the FDA)
necessary to conduct its business as presently conducted (collectively,
"PERMITS"), except for such Permits which the failure to obtain would
not have a Material Adverse Effect, and is in compliance with the terms
and conditions of all such Permits; all of such Permits held by each of
the Company and its Subsidiary are valid and in full force and effect;
there is no pending or threatened action, suit, claim or proceeding
which may cause any such Permit to be limited, revoked, cancelled,
suspended, modified or not renewed and each of the Company and its
Subsidiary has not received any notice of proceedings relating to the
limitation, revocation, cancellation, suspension, modification or
non-renewal of any such Permit which, singularly or in the aggregate,
if the subject of an unfavorable decision, ruling or finding, would
have a Material Adverse Effect, whether or not arising from
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transactions in the ordinary course of business, except as set forth in
or contemplated by the Base Prospectus.
(x) Cacciamatta Accountancy Corp., who have certified certain financial
statements of the Company and delivered their report with respect to
the audited consolidated financial statements and schedules included in
the Base Prospectus, the Prospectus Supplement or the Registration
Statement, or incorporated by reference therein, as the case may be,
are independent registered public accountants with respect to the
Company within the meaning of the Securities Act and the Rules and
Regulations.
(y) Each of the Company and its Subsidiary has filed all foreign,
federal, state and local tax returns that are required to be filed or
has requested extensions thereof (except in any case in which the
failure so to file would not have a Material Adverse Effect, except as
set forth in the Base Prospectus) and has paid all taxes required to be
paid by it and any other assessment, fine or penalty levied against it,
to the extent that any of the foregoing is due and payable, except for
any such assessment, fine or penalty that is currently being contested
in good faith or as would not have a Material Adverse Effect, except as
set forth in the Base Prospectus.
(z) The principal executive officer and principal financial officer of
the Company have made all certifications required by the Sarbanes-Oxley
Act of 2002 and the rules and regulations promulgated in connection
therewith (the "SARBANES-OXLEY ACT"), and the statements contained in
any such certification are complete and correct. The Company maintains
"disclosure controls and procedures" (as defined in Rule 13a-14(c)
under the Exchange Act), and such controls and procedures are designed
(i) to ensure that information required to be disclosed by the Company
in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time periods
specified in the Commission's rules and forms and (ii) to ensure that
information required to be disclosed by the Company in the reports that
it files or submits under the Exchange Act is accumulated and
communicated to the Company's management, including its principal
executive officer and principal financial officer, as appropriate to
allow timely decisions regarding required disclosure. The Company does
not have any material weaknesses in internal controls, and to the
Company's knowledge there has been no fraud, whether or not material,
that involves management or other employees of the Company or its
Subsidiary who have a significant role in the Company's internal
controls. The Company is otherwise in compliance in all respects with
all applicable effective provisions of the Sarbanes-Oxley Act and the
rules and regulations promulgated by the Commission (and intends to
comply with all applicable provisions that are not yet effective upon
effectiveness).
(aa) Each of the Company and its Subsidiary maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting
11
principles and to maintain accountability of assets; (iii) access to
assets is permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Except as
described in the Base Prospectus, since the end of the Company's most
recent fiscal year, there has been no change in the Company's or its
Subsidiary's internal control over financial reporting that has
materially affected, or is reasonably likely to materially affect, the
Company's internal control over financial reporting.
(bb) Each of the Company and its Subsidiary (i) is in compliance in all
material respects with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) has
received and is in compliance with all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct
its business and (iii) has not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses or
other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated by the Base Prospectus (exclusive of any supplement
thereto). Neither the Company nor its Subsidiary has been named as a
"POTENTIALLY RESPONSIBLE PARTY" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(cc) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of medical wastes,
toxic wastes, hazardous wastes or hazardous substances by the Company
or its Subsidiary (or, to the Company's knowledge, any of the Company's
or its Subsidiary's predecessors in interest) at, upon or from any of
the property now or previously owned or leased by the Company or its
Subsidiary in violation of any applicable Environmental Law which would
require remedial action under any applicable Environmental Law, except
for any violation or remedial action which would not cause, singularly
or in the aggregate with all such violations and remedial actions, a
Material Adverse Effect; there has been no material spill, discharge,
leak, emission, injection, escape, dumping or release of any kind onto
such property or of any medical wastes, toxic wastes, hazardous wastes
or hazardous substances due to or caused by the Company or its
Subsidiary or with respect to which the Company or its Subsidiary had
knowledge, except for any such spill, discharge, leak, emission,
injection, escapes, dumpings or releases which would not cause or would
not be reasonably likely to cause, singularly or in the aggregate with
all such spills, discharges, leaks, emissions, injections, escapes,
dumpings or releases, a Material Adverse Effect; and the terms
"hazardous substances," "toxic wastes," "hazardous wastes" and "medical
wastes" shall have the meanings specified in any applicable
Environmental Laws.
12
(dd) In the ordinary course of its business, the Company and its
Subsidiary periodically reviews the effect of Environmental Laws on the
business, operations and properties of each of the Company and its
Subsidiary in the course of which it identifies and evaluates
associated costs and liabilities (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws, or any permit,
license or approval, any related constraints on operating activities
and any potential liabilities to third parties). On the basis of such
review, the Company and its Subsidiary has reasonably concluded that
such associated costs and liabilities would not, singularly or in the
aggregate, have a Material Adverse Effect, whether or not arising from
transactions in the ordinary course of business, except as set forth in
or contemplated by the Base Prospectus.
(ee) Each of the Company and its Subsidiary owns, possesses, licenses
or has other rights to use all foreign and domestic patents, patent
applications, trade and service marks, trade and service mark
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, Internet domain names, know-how and other
intellectual property (collectively, the "INTELLECTUAL PROPERTY")
necessary for the conduct of the Company's business as now conducted or
as proposed in the Base Prospectus, the Prospectus Supplement and the
Time of Sale Prospectus, if any, to be conducted. Except as set forth
in the Base Prospectus, (a) there are no rights of third parties to any
such Intellectual Property; (b) to the best of the Company's knowledge,
there is no infringement by third parties of any such Intellectual
Property; (c) there is no pending or, to the best of the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging each of the Company's and the Subsidiary's rights in or to
any such Intellectual Property, and neither the Company nor its
Subsidiary is unaware of any facts which would form a reasonable basis
for any such claim; (d) there is no pending or, to the best of the
Company's knowledge, threatened action, suit, proceeding or claim by
others challenging the validity or scope of any such Intellectual
Property; (e) there is no pending or, to the best of the Company's
knowledge, threatened action, suit, proceeding or claim by others that
the Company or its Subsidiary infringe or otherwise violate any patent,
trademark, copyright, trade secret or other proprietary rights of
others, and neither the Company nor its Subsidiary is unaware of any
other fact which would form a reasonable basis for any such claim; (f)
to the Company's knowledge, there is no third-party U.S. patent or
published U.S. patent application which contains claims for which an
Interference Proceeding could be commenced against any patent or patent
application that is part of the Intellectual Property; (g) there is no
pending or, to the best of the Company's knowledge, threatened action,
suit, proceeding or claim by others claiming the ownership of and
interest in the Intellectual Property; and (h) to the best of the
Company's knowledge, the Company and its Subsidiary have taken all
steps necessary to perfect its ownership of and interest in the
Intellectual Property.
(ff) The clinical, pre-clinical and other studies and tests conducted
by or on behalf of or sponsored by the Company or its Subsidiary that
are described or referred to in the Base Prospectus or Prospectus
Supplement were and, if still pending, are being conducted in
accordance with all statutes, laws, rules and
13
regulations, as applicable (including, without limitation, those
administered by the FDA or by any foreign, federal, state or local
governmental or regulatory authority performing functions similar to
those performed by the FDA). The descriptions of the results of such
studies and tests that are described or referred to in the Base
Prospectus or Prospectus Supplement are accurate and complete in all
material respects and fairly present the published data derived from
such studies and tests, and each of the Company and its Subsidiary has
no knowledge of other studies or tests the results of which are
materially inconsistent with or otherwise call into question the
results described or referred to in the Base Prospectus, the Time of
Sale Prospectus, if any, or the Prospectus Supplement. Neither the
Company nor its Subsidiary has received any notices or other
correspondence from the FDA or any other foreign, federal, state or
local governmental or regulatory authority performing functions similar
to those performed by the FDA with respect to any ongoing clinical or
pre-clinical studies or tests requiring the termination, suspension or
modification of such studies or tests. For the avoidance of doubt, the
Company makes no representation or warranty that the results of any
studies, tests or preclinical or clinical trials conducted by or on
behalf of the Company will be sufficient to obtain governmental
approval from the FDA or any foreign, state or local governmental body
exercising comparable authority.
(gg) Each of the Company and its Subsidiary has established and
administers a compliance program (including a written compliance
policy) applicable to the Company and its Subsidiary, to assist the
Company, its Subsidiary and their directors, officers and employees of
the Company and its Subsidiary in complying with applicable regulatory
guidelines (including, without limitation, those administered by the
FDA and any other foreign, federal, state or local governmental or
regulatory authority performing functions similar to those performed by
the FDA).
(hh) Neither the Company nor its Subsidiary has failed to file with the
applicable regulatory authorities (including, without limitation, the
FDA or any foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the FDA)
any filing, declaration, listing, registration, report or submission;
all such filings, declarations, listings, registrations, reports or
submissions were in compliance with applicable laws when filed and no
deficiencies have been asserted by any applicable regulatory authority
(including, without limitation, the FDA or any foreign, federal, state
or local governmental or regulatory authority performing functions
similar to those performed by the FDA) with respect to any such
filings, declarations, listings, registrations, reports or submissions.
(ii) No relationship, direct or indirect, exists between or among the
Company or its Subsidiary on the one hand and the directors, officers,
stockholders, customers or suppliers of the Company or its Subsidiary
on the other hand which is required to be described in the Base
Prospectus or the Prospectus Supplement, and which is not so described.
(jj) To the Company's knowledge, neither the Company nor any other
person associated with or acting on behalf of the Company including,
without
14
limitation, any director, officer, agent or employee of the Company or
its Subsidiary, has, directly or indirectly, while acting on behalf of
the Company or its Subsidiary (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses, or
received or retained any funds, relating to political activity; (ii)
made any unlawful payment from corporate funds to, or received or
retained any unlawful funds from, foreign or domestic government
officials or employees or to or from foreign or domestic political
parties or campaigns; (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any other
unlawful payment or received or retained any other unlawful funds.
(kk) Neither the Company nor its Subsidiary is and, after giving effect
to the offering and sale of the Stock and the application of the
proceeds thereof as described in the Base Prospectus and the Prospectus
Supplement, will become an "INVESTMENT COMPANY" as defined in the
Investment Company Act of 1940, as amended.
(ll) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in
the Base Prospectus, the Prospectus Supplement and the Time of Sale
Prospectus, if any, has been made or reaffirmed without a reasonable
basis or has been disclosed other than in good faith.
(mm) Other than as contemplated by this Agreement, neither the Company
nor its Subsidiary is a party to any contract, agreement or
understanding with any person that would give rise to a valid claim
against the Company or its Subsidiary or the Placement Agents for a
brokerage commission, finder's fee or like payment in connection with
the offering and sale of the Stock.
(nn) Neither the Company nor its Subsidiary has sustained, since the
date of the latest audited financial statements included in the Base
Prospectus or the Registration Statement, or incorporated by reference
therein, as the case may be, any material loss or interference with its
business from fire, explosion, flood, terrorist act or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as set forth in
or contemplated by the Base Prospectus.
(oo) Except as set forth in or as otherwise contemplated by the
Registration Statement or, the Base Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement or, the Base Prospectus, there has not been (i) any material
adverse change, or any development that would reasonably be expected to
result in a material adverse change, in the business, properties,
management, financial condition or results of operations of the Company
taken as a whole, (ii) any transaction which is material to the Company
taken as a whole, (iii) any obligation, direct or contingent (including
any off-balance sheet obligations), incurred by the Company outside the
ordinary course of business, which is material to the Company taken as
a whole, (iv) any change in the capital stock (other than the issuance
of shares of Common Stock upon exercise of stock options and warrants
disclosed as outstanding in the Registration Statement and the Base
Prospectus, if any, and the grant of options under existing stock
option plans
15
described in the Registration Statement and the Base Prospectus) or
outstanding indebtedness of the Company or (v) any dividend or
distribution of any kind declared, paid or made on the capital stock of
the Company.
(pp) Any statistical and market-related data included in the
Registration Statement, the Base Prospectus, the Prospectus Supplement
or the Time of Sale Prospectus, if any, are based on or derived from
sources that the Company believes to be reliable and accurate, and the
Company has obtained the written consent to the use of such data from
such sources to the extent required.
(qq) The Stock is registered under the Exchange Act and is duly listed
and admitted and authorized for trading, subject to official notice of
issuance, on the American Stock Exchange ("AMEX") and the Company has
taken no action designed to terminate, or likely to have the effect of
terminating the registration of the Common Stock under the Exchange Act
or delisting or suspending from trading the Common Stock from AMEX, nor
has the Company received any information suggesting that the Commission
or the National Association of Securities Dealers, Inc. ("NASD") is
contemplating terminating or suspending such registration or listing.
(rr) Neither the Company, its Subsidiary nor, to the Company's
knowledge, any of the Company's or its Subsidiary's officers, directors
or affiliates has taken or will take, directly or indirectly, any
action designed or intended to stabilize or manipulate the price of any
security of the Company, or which caused or resulted in, or which might
in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the
Company.
(ss) Neither the Company, its Subsidiary, nor any of the Company's or
its Subsidiary's officers, directors or affiliates has offered, or
caused any Placement Agent to offer, Stock to any person with the
intent to influence unlawfully (i) a customer or supplier of the
Company to alter the customer's or supplier's level or type of business
with the Company or (ii) a trade journalist or publication to write or
publish favorable information about the Company or any of their
respective products or services.
(tt) There are no affiliations with the NASD among the Company's
officers, directors or, to the best of the knowledge of the Company,
any five percent or greater stockholder of the Company, except as set
forth in the Base Prospectus or otherwise disclosed in writing to the
Placement Agents.
(uu) The Company has provided the Placement Agents true, correct, and
complete copies of all documentation pertaining to any extension of
credit in the form of a personal loan made, directly or indirectly, by
the Company to any director or executive officer of the Company, or to
any family member or affiliate of any director or executive officer of
the Company that is currently outstanding; and since December 31, 2003,
the Company has not, directly or indirectly: (i) extended credit,
arranged to extend credit, or renewed any extension of credit, in the
form of a personal loan, to or for any director or executive officer of
the Company, or to or for any family member or affiliate
16
of any director or executive officer of the Company; or (ii) made any
material modification, including any renewal thereof, to any term of
any personal loan to any director or executive officer of the Company,
or any family member or affiliate of any director or executive officer,
which loan was outstanding on December 31, 2003, except as disclosed
in the Base Prospectus or the Registration Statement.
(vv) The Company has taken all necessary actions to ensure that, upon
and at all times after the AMEX shall have approved the Stock for
inclusion, it will be in compliance with all applicable corporate
governance requirements set forth in the AMEX Rules that are then in
effect and is actively taking steps to ensure that it will be in
compliance with other applicable corporate governance requirements set
forth in the AMEX Rules not currently in effect upon and all times
after the effectiveness of such requirements.
(ww) No approval of the stockholders of the Company under the rules and
regulations of any trading market, and no approval of the stockholders
of the Company thereunder is required for the Company to issue and
deliver to the Purchasers the Stock.
Any certificate signed by any officer of the Company and delivered to
the Placement Agents or counsel for the Placement Agents in connection with the
offering of the Stock shall be deemed a representation and warranty by the
Company, as to the matters covered thereby, to the Placement Agents and the
Purchasers.
3. THE CLOSING. The time and date of closing and delivery of the documents
required to be delivered to the Placement Agents pursuant to Section 6 hereof
shall be at 10:00 A.M., local time, on December 16, 2005 (the "CLOSING DATE") at
the office of DLA Piper Rudnick Gray Cary LLP located at 4365 Executive Drive,
Suite 1100, San Diego, CA 92101.
4. Further Agreements of the Company. The Company agrees with the Placement
Agents and the Purchasers:
(a) (i) to make no further amendment or supplement prior to the Closing
Date to the Registration Statement or any amendment or supplement to
the Prospectus Supplement, without the prior written consent of the
Representative, which consent shall not be unreasonably withheld; (ii)
for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Stock, to advise the Representative
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus Supplement or any amended
Prospectus Supplement has been filed and to furnish the Representative
with copies thereof; (iii) to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission and AMEX pursuant to Section 13(a), 15 or
15(d) of the Exchange Act subsequent to the date of the Prospectus
Supplement and for so long as the delivery of a prospectus is required
in connection with the offering or sale of the Stock; (iv) to advise
the Representative, promptly after it receives notices thereof, (x) of
any request by the Commission to amend the Registration Statement or to
amend or
17
supplement the Prospectus Supplement or for additional information and
(y) of the issuance by the Commission, of any stop order suspending the
effectiveness of the Registration Statement or any post-effective
amendment thereto or any order directed at any Incorporated Document or
any amendment or supplement thereto or any order preventing or
suspending the use of the Base Prospectus or the Prospectus Supplement
or any amendment or supplement thereto, of the suspension of the
qualification of the Stock for offering or sale in any jurisdiction, of
the institution or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus Supplement or for
additional information; and, (v) in the event of the issuance of any
stop order or of any order preventing or suspending the use of the Base
Prospectus or Prospectus Supplement or suspending any such
qualification, promptly to use its reasonable best efforts to obtain
the withdrawal of such order.
(b) To comply with the Securities Act and the Exchange Act, and the
Rules and Regulations thereunder, so as to permit the completion of the
distribution of the Stock as contemplated in this Agreement and the
Prospectus Supplement. If during the period in which a prospectus is
required by law to be delivered by a Placement Agents or a dealer in
connection with the distribution of Stock contemplated by the
Prospectus Supplement, any event shall occur as a result of which, in
the judgment of the Company or in the reasonable opinion of the
Placement Agents or counsel for the Placement Agents, it becomes
necessary to amend or supplement the Prospectus Supplement in order to
make the statements therein, in the light of the circumstances existing
at the time the Prospectus Supplement is delivered to a purchaser, not
misleading, or, if it is necessary at any time to amend or supplement
the Prospectus Supplement to comply with any law, the Company promptly
will prepare and file with the Commission, and furnish at its own
expense to the Representative and to dealers, an appropriate amendment
to the Registration Statement or supplement to the Prospectus
Supplement so that the Prospectus Supplement as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus Supplement will
comply with such law. Before amending the Registration Statement or
supplementing the Base Prospectus in connection with the Offering, the
Company will furnish the Representative with a copy of such proposed
amendment or supplement and will not file such amendment or supplement
to which the Representative reasonably and timely objects.
(c) To furnish promptly to the Representative and to counsel for the
Representative a copy of the Registration Statement as originally filed
with the Commission, and each amendment thereto filed with the
Commission, including all consents and exhibits filed therewith.
(d) To deliver promptly to the Representative such number of the
following documents as the Representative shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case excluding
exhibits), (ii) the Base Prospectus, (iii) the Prospectus Supplement
(not later than 10:00
18
A.M., New York time, on the Business Day following the execution and
delivery of this Agreement) and any amendment or supplement thereto
(not later than 10:00 A.M., New York City time, on the Business Day
following the date of such amendment or supplement); (iv) the Time of
Sale Prospectus, if any, and (v) any document incorporated by reference
in the Base Prospectus, the Time of Sale Prospectus, if any, or the
Prospectus Supplement. The Company will pay the expenses of printing or
other production of all documents relating to the Offering.
(e) To make generally available to its stockholders and the
Representative as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Securities Act), an earnings
statement of the Company (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158).
(f) To promptly take from time to time such actions as the
Representative may reasonably request to qualify the Stock for offering
and sale under the securities, or blue sky, laws of such jurisdictions
(including without limitation any post-filing requirements) as the
Representative may designate and to continue such qualifications in
effect for so long as required for the distribution of the Stock, and
the Company will pay the fee of the NASD in connection with its review
of the Offering, if applicable. The Company shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which it is not
so qualified or to file a general consent to service of process in any
jurisdiction.
(g) Not to directly or indirectly offer, sell, assign, transfer,
pledge, contract to sell, or otherwise dispose of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for
Common Stock for a period of 90 days from the date of the Prospectus
Supplement without the prior written consent of the Representative,
other than the Company's sale of the Stock and shares or options to
purchase shares pursuant to currently existing stock plans, currently
outstanding options, warrants or rights. The Company will cause each of
its executive officers and directors to furnish to the Placement
Agents, prior to the Closing Date, a letter, substantially in the form
of Exhibit B attached hereto, pursuant to which each such person shall
agree not to directly or indirectly offer, sell, assign, transfer,
pledge, contract to sell, or otherwise dispose of any shares of Common
Stock or securities convertible into or exercisable or exchangeable for
Common Stock for a period of 90 days from the date of the Prospectus
Supplement, without the prior written consent of the Representative. If
(i) the Company issues an earnings release or material news or a
material event relating to the Company occurs during the last 17 days
of the lock-up period, or (ii) prior to the expiration of the lock-up
period, the Company announces that it will release earnings results
during the 16-day period beginning on the last day of the lock-up
period, the restrictions imposed by this Section 4(g) shall continue to
apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news
or material event.
19
(h) Prior to the Closing Date, to furnish to the Placement Agents, as
soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company for any periods
subsequent to the periods covered by the financial statements appearing
or incorporated by reference in the Base Prospectus, the Prospectus
Supplement, the Time of Sale Prospectus, if any, or the Registration
Statement.
(i) Prior to the Closing Date, not to issue any press release or other
communication directly or indirectly or hold any press conference with
respect to the Company, its condition, financial or otherwise, or
earnings, business affairs or business prospects (except for routine
oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the
Representative is notified), without the prior written consent of the
Representative, unless in the judgment of the Company and its counsel,
and after notification to the Representative, such press release or
communication is required by law. In such event, the Company shall
consult with the Representative as to the contents of such press
release.
(j) To apply the net proceeds from the sale of the Stock as set forth
in the Prospectus Supplement under the heading "USE OF PROCEEDS."
(k) To comply in all material respects with all applicable securities
and other applicable laws, rules and regulations, including, without
limitation, the Sarbanes-Oxley Act, and use its best efforts to cause
the Company's directors and officers, in their capacities as such, to
comply with such laws, rules and regulations, including, without
limitation, the provisions of the Sarbanes-Oxley Act.
(l) To engage and maintain, at its expense, a registrar and transfer
agent for the Stock.
(m) To not take any action prior to the Closing Date which would
require the Prospectus Supplement to be amended or supplemented
pursuant to Section 4(b).
(n) To supply the Representative with copies of all correspondence to
and from, and all documents issued to and by, the Commission in
connection with the registration of the Stock under the Securities Act.
(o) The Company will use its best efforts to ensure that the Stock is
quoted on the AMEX at the Closing Date.
(p) To furnish to the Placement Agents a copy of each proposed free
writing prospectus to be prepared by or on behalf of, used by, or
referred to by the Company and not use or refer to any free writing
prospectus to which the Representative reasonably objects.
(q) Not to take any action that would result in any Placement Agent or
the Company being required to file with the Commission pursuant to Rule
433(d) under the Securities Act a free writing prospectus prepared by
or on behalf of
20
any Placement Agent that such Placement Agent otherwise would not have
been required to file thereunder.
(r) If the Time of Sale Prospectus, if any, is being used and any event
shall occur or condition exist as a result of which it is necessary to
amend or supplement the Time of Sale Prospectus in writing in order to
make the statements therein, not misleading, or if, in the opinion of
counsel to the Placement Agents, it is necessary to amend or supplement
the Time of Sale Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to
the Placement Agents upon request, either amendments or supplements to
the Time of Sale Prospectus so that the statements in the Time of Sale
Prospectus as so amended or supplemented will not, in light of the
circumstances when the Time of Sale Prospectus is delivered to a
prospective purchaser, be misleading or so that the Time of Sale
Prospectus, as amended or supplemented, will comply with law.
5. PAYMENT OF EXPENSES. The Company agrees with the Placement Agents to pay (a)
the costs incident to the authorization, issuance, sale, preparation and
delivery of the Stock to the Purchasers and any taxes payable in that
connection; (b) the costs incident to the Registration of the Stock under the
Securities Act; (c) the costs incident to the preparation, printing and
distribution of the Registration Statement, Base Prospectus and Prospectus
Supplement and any amendments and exhibits thereto or any document incorporated
by reference therein, and the costs of printing, reproducing and distributing,
this Agreement by mail, telex or other means of communication; (d) the fees and
expenses (including related fees and expenses of counsel for the Placement
Agents) incurred in connection with filings, if any, made with the NASD, if
applicable not to exceed $10,000; (e) any applicable listing or other similar
fees; (f) the fees and expenses of qualifying the Stock under the securities
laws of the several jurisdictions as provided in Section 4(f) and of preparing,
printing and distributing Blue Sky Memoranda (including related fees and
expenses of counsel to the Placement Agents); (g) all fees and expenses of the
registrar and transfer agent of the Stock; (h) fifty percent (50%) of the fees
and expenses of the Placement Agents' legal counsel; and (i) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement (including, without limitation, the fees and expenses of the
Company's counsel and the Company's independent accountants and the travel and
other expenses incurred by Company personnel in connection with any "roadshow"
including, without limitation, any expenses advanced by the Placement Agents on
the Company's behalf (which will be promptly reimbursed)).
6. CONDITIONS TO THE OBLIGATIONS OF THE PLACEMENT AGENTS AND THE PURCHASERS, AND
THE SALE OF THE STOCK. The respective obligations of each Placement Agent and
the Purchasers, and the closing of the sale of the Stock hereunder are subject
to the accuracy, when made and on the Closing Date, of the representations and
warranties on the part of the Company and its Subsidiary contained herein, to
the accuracy of the statements of the Company and its Subsidiary made in any
certificates pursuant to the provisions hereof, to the performance by the
Company and of its Subsidiary of their obligations hereunder, and to each of the
following additional terms and conditions:
21
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose
shall have been initiated or threatened by the Commission, and any
request for additional information on the part of the Commission (to be
included in the Registration Statement, the Base Prospectus, the Time
of Sale Prospectus, if any, or the Prospectus Supplement or otherwise)
shall have been complied with to the reasonable satisfaction of the
Representative. Any filings required to be made by the Company in
accordance with Section 4(a) shall have been timely filed with the
Commission.
(b) None of the Placement Agents shall have discovered and disclosed to
the Company on or prior to the Closing Date that the Registration
Statement, the Base Prospectus, the Time of Sale Prospectus, if any, or
the Prospectus Supplement or any amendment or supplement thereto
contains an untrue statement of a fact which, in the opinion of counsel
for the Placement Agents, is material or omits to state any fact which,
in the opinion of such counsel, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form, execution, delivery and validity of each of this
Agreement, the Stock, the Registration Statement, the Base Prospectus,
the Time of Sale Prospectus, if any, and the Prospectus Supplement and
all other legal matters relating to this Agreement and the transactions
contemplated hereby shall be reasonably satisfactory in all material
respects to counsel for the Placement Agents, and the Company shall
have furnished to such counsel all documents and information that they
may reasonably request to enable them to pass upon such matters.
(d) The Placement Agents shall have received from each of (i) DLA Piper
Rudnick Gray Cary US LLP, corporate counsel for the Company (ii) Hale
Lane Peek Dennison and Howard, special counsel for the Company (iii)
DLA Piper Rudnick Gray Cary US LLP, intellectual property counsel for
the Company, such counsel's written opinion, addressed to the Placement
Agents and the Purchasers and dated as of the Closing Date, in form and
substance reasonably satisfactory to the Placement Agents as set forth
in Exhibits C-1, C-2 and C-3 attached hereto, respectively.
DLA Piper Rudnick Gray Cary US LLP shall also have furnished
to the Placement Agents a written statement, addressed to the Placement
Agents and the Purchasers and dated the Closing Date, in form and
substance satisfactory to the Representative, to the effect that (x)
such counsel has acted as counsel to the Company in connection with the
preparation of the Registration Statement, (y) based on such counsel's
examination of the Registration Statement and such counsel's
investigations made in connection with the preparation of the
Registration Statement and conferences with certain officers and
employees of and with auditors for and counsel to the Company, such
counsel has no reason to believe that (I) the Registration Statement,
as of its effective date, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or
22
necessary in order to make the statements therein not misleading, or
that the Base Prospectus, the Time of Sale Prospectus, if any, or the
Prospectus Supplement contains any untrue statement of a material fact
or omits to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (II) any
document incorporated by reference in the Base Prospectus, the Time of
Sale Prospectus, if any, or the Prospectus Supplement or any further
amendment or supplement to any such incorporated document made by the
Company prior to the Closing Date, when they became effective or were
filed with the Commission, as the case may be, contained, in the case
of a registration statement which became effective under the Securities
Act, any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or, in the case of other
documents which were filed under the Exchange Act with the Commission,
any untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading;
it being understood that such counsel need express no opinion as to the
financial statements or other financial data contained in the
Registration Statement, the Base Prospectus, the Time of Sale
Prospectus, if any, or the Prospectus Supplement.
(e) The Placement Agents shall have received from Brown Raysman
Millstein Felder & Steiner LLP, such opinion or opinions, dated the
Closing Date and addressed to the Placement Agents, with respect to the
issuance and sale of the Stock, the Registration Statement, the Base
Prospectus, the Time of Sale Prospectus, if any, the Prospectus
Supplement (together with any supplement thereto) and other related
matters as the Representative may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Placement Agents and the
Purchasers a certificate, dated as of the Closing Date, executed by its
Chief Executive Officer and its Chief Financial Officer on behalf of
the Company stating that (i) such officers have carefully examined the
Registration Statement, the Base Prospectus, the Time of Sale
Prospectus, if any, and the Prospectus Supplement and, in their
opinion, the Registration Statement (including the Base Prospectus) as
of its effective date, the Time of Sale Prospectus, if any, as of each
such effective date and the Prospectus Supplement, as of each such
effective date, did not include any untrue statement of a material fact
and did not omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (ii) since
the effective date of the Registration Statement no event has occurred
which should have been set forth in a supplement or amendment to the
Registration Statement, the Base Prospectus, the Time of Sale
Prospectus, if any, or the Prospectus Supplement and that is not
already included in such document by reason of materials incorporated
by reference therein, (iii) to the best of their knowledge after
reasonable investigation, as of the Closing Date, the representations
and warranties of the Company and its Subsidiary in this
23
Agreement are true and correct and the Company and its Subsidiary have
complied with all agreements and covenants contained in this Agreement
and satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, (iv) subsequent to the date
of the most recent financial statements included or incorporated by
reference in the Base Prospectus, there has been no change in the
financial position or results of operation of the Company and its
Subsidiary that could have a Material Adverse Effect, or any material
change, or any material development including a prospective change, in
or affecting the condition (financial or otherwise), results of
operations, business or prospects of the Company taken as a whole,
except as set forth in, or contemplated by, the Base Prospectus, and
(v) the Registration Statement became effective on June 17, 2005, and
to their knowledge, as of the Closing Date (I) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been commenced or are pending before
or are contemplated by the Commission and (II) no action has been taken
by any governmental agency, body or official, and no injunction,
restraining order or order of any nature by any federal or state court
has been issued, which would prevent the issuance of the Stock.
(g) At the Execution Time, the Placement Agents shall have received
from Cacciamatta Accountancy Corp. a letter, addressed to the Placement
Agents and dated such date, in form and substance satisfactory to the
Placement Agents (i) confirming that they are independent registered
public accountants with respect to the Company within the meaning of
the Securities Act and the Rules and Regulations and (ii) stating the
conclusions and findings of such firm with respect to the financial
statements and certain financial information contained or incorporated
by reference in the Base Prospectus, the Time of Sale Prospectus, if
any, and the Prospectus Supplement.
(h) On the Closing Date, the Placement Agents shall have received a
letter (the "BRING-DOWN LETTER") from Cacciamatta Accountancy Corp.
addressed to the Placement Agents and dated the Closing Date
confirming, as of the date of the bring-down letter (or, with respect
to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Base
Prospectus, the Time of Sale Prospectus, if any, and the Prospectus
Supplement as of a date not more than three Business Days prior to the
date of the bring-down letter), the conclusions and findings of such
firm with respect to the financial information and other matters
covered by its letter delivered to the Placement Agents concurrently
with the execution of this Agreement pursuant to Section 6(g).
(i) (i) Neither the Company nor its Subsidiary shall have sustained
since the date of the latest audited financial statements included or
incorporated by reference in the Base Prospectus or the Prospectus
Supplement any loss or interference with its business from fire,
explosion, flood, terrorist act or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth in or
contemplated by the Base Prospectus, and (ii) except for the exercise
of stock options in the ordinary course of the Company's business,
since such date
24
there shall not have been any change in the capital stock or long-term
debt of the Company or its Subsidiary or any change, or any development
involving a prospective change, in or affecting the business, general
affairs, management, financial position, stockholders' equity, results
of operations or prospects of the Company or its Subsidiary, otherwise
than as set forth in or contemplated by the Base Prospectus, the effect
of which, in any such case described in clause (i) or (ii), is, in the
judgment of the Representative, so material and adverse as to make it
impracticable or inadvisable to proceed with the sale or delivery of
the Stock on the terms and in the manner contemplated by the Base
Prospectus, the Time of Sale Prospectus, if any, and the Prospectus
Supplement.
(j) The Stock is registered under the Exchange Act and, as of the
Closing Date, the Stock shall be listed and admitted and authorized for
trading on the AMEX and satisfactory evidence of such actions shall
have been provided to the Representative. The Company shall have taken
no action designed to, or likely to have the effect of terminating the
registration of the Stock under the Exchange Act or delisting or
suspending from trading the Stock from AMEX, nor has the Company
received any information suggesting that the Commission or the AMEX is
contemplating terminating such registration or listing.
(k) At the Execution Time, the Company shall have furnished to the
Representative a letter substantially in the form of Exhibit B hereto
from each executive officer and director of the Company.
(l) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the Nasdaq National Market or
the American Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum or
maximum prices or maximum ranges for prices shall have been established
on any such exchange or such market by the Commission, by such exchange
or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by
Federal or state authorities or a material disruption has occurred in
commercial banking or securities settlement or clearance services in
the United States, (iii) the United States shall have become engaged in
hostilities, or the subject of an act of terrorism, there shall have
been an escalation in hostilities involving the United States or there
shall have been a declaration of a national emergency or war by the
United States or (iv) there shall have occurred any other calamity or
crisis or any change in general economic, political or financial
conditions in the United States or elsewhere, if the effect of any such
event in clause (iii) or (iv) makes it, in the sole judgment of the
Representative, impracticable or inadvisable to proceed with the sale
or delivery of the Stock on the terms and in the manner contemplated by
the Base Prospectus and the Prospectus Supplement.
(m) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or
25
body which would, as of the Closing Date, prevent the issuance or sale
of the Stock or materially and adversely affect or potentially
materially and adversely affect the business or operations of the
Company; and no injunction, restraining order or order of any other
nature by any federal or state court of competent jurisdiction shall
have been issued as of the Closing Date which would prevent the
issuance or sale of the Stock or materially and adversely affect or
potentially materially and adversely affect the business or operations
of the Company.
(n) The Company shall have prepared and filed with the Commission a
Current Report on Form 8-K with respect to the Offering, including as
an exhibit thereto this Agreement and any other documents relating
thereto which are required to be filed therewith.
(o) The Company shall have entered into Subscription Agreements with
each of the Purchasers and such agreements shall be in full force and
effect.
(p) Prior to the Closing Date, the Company shall have furnished to the
Placement Agents such further information, certificates and documents
as the Representative may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Placement Agents.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless the Placement Agents,
their respective officers, employees, representatives and agents and
each person, if any, who controls such Placement Agents within the
meaning of the Securities Act (collectively the "PLACEMENT AGENT
INDEMNIFIED PARTIES" and each a "PLACEMENT AGENT INDEMNIFIED PARTY")
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which that Placement Agent Indemnified
Party may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of
or is based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in the Base Prospectus, the Registration
Statement, the Time of Sale Prospectus, if any, or the Prospectus
Supplement or in any amendment or supplement thereto, (ii) the omission
or alleged omission to state in the Base Prospectus, the Registration
Statement, the Time of Sale Prospectus, if any, or the Prospectus
Supplement or in any amendment or supplement thereto a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (iii) any breach of the representations and
warranties of the Company contained herein or (iv) any act or failure
to act, or any alleged act or failure to act, by any Placement Agent in
connection with, or relating in any manner to, the Stock or the
offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, damage, liability or action arising out
of or based upon matters covered by clause (i), (ii) or (iii) above;
(provided that the Company shall not be liable in the case of any
matter covered by this clause (iv) to the extent that
26
it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such act or failure to act undertaken or
omitted to be taken by such Placement Agent through its gross
negligence or willful misconduct) and shall reimburse each Placement
Agent Indemnified Party promptly upon demand for any legal or other
expenses reasonably incurred by that Placement Agent Indemnified Party
in connection with investigating or preparing to defend or defending
against or appearing as a third party witness in connection with any
such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company shall not be liable in
any such case to the extent that any such loss, claim, damage,
liability or action arises out of or is based upon an untrue statement
or alleged untrue statement in or omission or alleged omission from the
Base Prospectus, the Registration Statement, the Time of Sale
Prospectus, if any, or the Prospectus Supplement or any such amendment
or supplement in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Placement
Agent through the Representative specifically for use therein, which
information the parties hereto agree is limited to the Placement
Agents' Information (as defined in Section 16). This indemnity
agreement is not exclusive and will be in addition to any liability,
which the Company might otherwise have and shall not limit any rights
or remedies which may otherwise be available at law or in equity to
each Placement Agent Indemnified Party.
(b) Each Placement Agent, severally and not jointly, shall indemnify
and hold harmless the Company its officers, employees, representatives
and agents, each of its directors and each person, if any, who controls
the Company within the meaning of the Securities Act (collectively the
"COMPANY INDEMNIFIED PARTIES" and each a "COMPANY INDEMNIFIED PARTY")
against any loss, claim, damage or liability, joint or several, or any
action in respect thereof, to which the Company Indemnified Parties may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of or is based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Base Prospectus, the Registration Statement, the Time
of Sale Prospectus, if any, or the Prospectus Supplement or in any
amendment or supplement thereto or (ii) the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but in each
case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and
in conformity with written information furnished to the Company by or
on behalf of that Placement Agent through the Representative
specifically for use therein, and shall reimburse the Company
Indemnified Parties for any legal or other expenses reasonably incurred
by such parties in connection with investigating or preparing to defend
or defending against or appearing as third party witness in connection
with any such loss, claim, damage, liability or action as such expenses
are incurred; provided that the parties hereto hereby agree that such
written information provided by the Placement Agents consist solely of
the Placement Agents Information. This indemnity agreement is not
exclusive and will be in addition to any liability, which each of the
Placement Agents and the Purchasers might otherwise have and shall not
limit any rights
27
or remedies which may otherwise be available at law or in equity to the
Company Indemnified Parties. Notwithstanding the provisions of this
Section 7(b), in no event shall any indemnity by any Placement Agent
under this Section 7(b) exceed the total compensation received by such
Placement Agent in accordance with Section 1(e).
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced
by such failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If
any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that
it wishes, jointly with any other similarly notified indemnifying
party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 7 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that any indemnified party shall have
the right to employ separate counsel in any such action and to
participate in the defense thereof but the fees and expenses of such
counsel shall be at the expense of such indemnified party unless (i)
the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have
been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to
those available to the indemnifying party and in the reasonable
judgment of such counsel it is advisable for such indemnified party to
employ separate counsel or (iii) the indemnifying party has failed to
assume the defense of such action in accordance with the terms hereof
and employ counsel reasonably satisfactory to the indemnified party, in
which case, if such indemnified party notifies the indemnifying party
in writing that it elects to employ separate counsel at the expense of
the indemnifying party, the indemnifying party shall not have the right
to assume the defense of such action on behalf of such indemnified
party, it being understood, however, that the indemnifying party shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for all such indemnified parties, which firm
shall be designated in writing by the Representative, if the
indemnified parties under this Section 7 consist of any Placement Agent
Indemnified Party, or by the Company if the indemnified parties under
this Section 7 consist of any Company Indemnified Parties. Each
indemnified party, as a condition of the indemnity agreements
28
contained in Sections 7(a) and 7(b) shall use all reasonable efforts to
cooperate with the indemnifying party in the defense of any such action
or claim. Subject to the provisions of Section 7(d) below, no
indemnifying party shall be liable for any settlement, compromise or
consent to the entry of judgment in connection with any such action
effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if
there be a final judgment for the plaintiff in any such action (other
than a judgment entered with the consent of such indemnified party),
the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of
such settlement or judgment.
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and
expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by this Section 7
effected without its written consent if (i) such settlement is entered
into more than 45 days after receipt by such indemnifying party of the
request for reimbursement, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior
to such settlement being entered into and (iii) such indemnifying party
shall not have reimbursed such indemnified party in accordance with
such request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
Section 7(a) or 7(b), then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Placement Agents on the
other from the offering of the Stock or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the
Company on the one hand and the Placement Agents on the other with
respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Placement Agents on the
other with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Stock
purchased under this Agreement (before deducting expenses) received by
the Company bears to the total compensation received by the Placement
Agents with respect to the Stock purchased under this Agreement. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Placement
Agents on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission; provided that the parties hereto
agree that the written information furnished to the Company by the
Placement
29
Agents for use in the Prospectus Supplement consists solely of the
Placement Agents' Information. The Company and the Placement Agents
agree that it would not be just and equitable if contributions pursuant
to this Section 7(e) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this
Section 7(e) shall be deemed to include, for purposes of this Section
7(e), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section
7(e), the Placement Agents shall not be required to contribute any
amount in excess of the total compensation received by such Placement
Agent in accordance with Section 1(e) less the amount of any damages
which such Placement Agent has otherwise paid or become liable to pay
by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
(f) The Placement Agents' obligations to contribute as provided in this
Section 7(f) are several in proportion to the total compensation
received by each of the Placement Agents in accordance with Section
1(e) and not joint.
8. TERMINATION. The obligations of the Placement Agents and the Purchasers
hereunder and under the Subscription Agreements may be terminated by the
Representative, in its absolute discretion by notice given to the Company prior
to delivery (including electronic delivery) of and payment for the Stock if,
prior to that time, any of the events described in Sections 6(i) or 6(l) have
occurred or if the Purchasers shall decline to purchase the Stock for any reason
permitted under this Agreement or the Subscription Agreements.
9. REIMBURSEMENT OF PLACEMENT AGENTS' EXPENSES. If the sale of the Stock
provided for herein is not consummated because any condition to the obligations
of the Placement Agents and the Purchasers set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 8 hereof or because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Placement Agents, the Company will reimburse the Placement Agents
upon demand for all out-of-pocket expenses (including fees and disbursements of
counsel and any expenses advanced by the Placement Agents on the Company's
behalf) that shall have been incurred by the Placement Agents in connection with
this Agreement and the proposed purchase and sale of the Stock and, upon demand,
the Company shall pay the full amount thereof to Representative.
10. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Placement Agents, the
Purchasers, the Company, and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable
30
right, remedy or claim under or in respect of this Agreement, or any provisions
herein contained, this Agreement and all conditions and provisions hereof being
intended to be and being for the sole and exclusive benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Placement Agent Indemnified Parties, and
the indemnities of the Placement Agents shall also be for the benefit of the
Company Indemnified Parties.
11. ABSENCE OF FIDUCIARY RELATIONSHIP. The Company acknowledges and agrees that:
(a) each Placement Agent's responsibility to the Company is solely
contractual in nature, the Placement Agents have been retained solely
to act as placement agents in connection with the sale of the Stock and
no fiduciary, advisory or agency relationship between the Company and
the Placement Agents has been created in respect of any of the
transactions contemplated by this Agreement, irrespective of whether
any of the Placements Agents has advised or is advising the Company on
other matters;
(b) the price of the Stock set forth in this Agreement was established
by the Company following discussions and arms-length negotiations with
the Representative, the Purchasers, and the Company is capable of
evaluating and understanding, and understands and accepts, the terms,
risks and conditions of the transactions contemplated by this
Agreement;
(c) the Company has been advised that the Placement Agents and their
affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company and that the
Placement Agents have no obligation to disclose such interests and
transactions to the Company by virtue of any fiduciary, advisory or
agency relationship; and
(d) the Company waives, to the fullest extent permitted by law, any
claims it may have against the Placement Agents for breach of fiduciary
duty or alleged breach of fiduciary duty and agrees that the Placement
Agents shall have no liability (whether direct or indirect) to the
Company in respect of such a fiduciary duty claim or to any person
asserting a fiduciary duty claim on behalf of or in right of the
Company, including stockholders, employees or creditors of the Company.
12. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company, its Subsidiary and the Placement Agents, as set forth
in this Agreement or made by them respectively, pursuant to this Agreement,
shall remain in full force and effect, regardless of any investigation made by
or on behalf of the Placement Agents, the Company, the Purchasers or any person
controlling any of them and shall survive delivery of and payment for the Stock.
31
13. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Placement Agents, shall be delivered or sent by mail,
telex or facsimile transmission to SG Cowen & Co., LLC, 1221 Avenue of
the Americas, New York, New York 10020, Attention: Veronica Iuliano
(E-mail) (Fax: 212-278-7995), with a copy to: Brown Raysman Millstein
Felder & Steiner LLP, 900 Third Avenue, New York, New York 10022,
Attention: Stuart Bressman, Esq. (Fax: 212-895-2900).
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Halozyme Therapeutics, Inc., 11588 Sorrento
Valley Road, Suite 17, San Diego, CA 92121, Attention: David A. Ramsay
(Fax: (858) 259-2539, with a copy to: DLA Piper Rudnick Gray Cary US
LLP, 4365 Executive Drive, Suite 1100, San Diego, CA 92121, Attention:
Douglas J. Rein (Fax: (858) 677-1477).
14. DEFINITIONS OF CERTAIN TERMS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, a
legal holiday, a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City or any day on which the
Nasdaq National Market is not open for trading.
"EFFECTIVE DATE" shall mean each date and time that the Registration
Statement (and any post-effective amendment or amendments thereto) became or
becomes effective.
"EXECUTION TIME" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"INTERFERENCE PROCEEDING" shall have the meaning set forth in 35 U.S.C.
Section 135.
"TO THE COMPANY'S KNOWLEDGE" and words of similar import shall mean
that which the Company or its Subsidiary knows or should have known using the
exercise of reasonable due diligence.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. PLACEMENT AGENTS' INFORMATION. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the Placement Agents' Information
consists solely of the statements concerning the Placement Agents contained in
the third paragraph under the heading "Plan of Distribution" in the Prospectus
Supplement.
17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or
32
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
18. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Placement Agents.
19. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
20. CONSENT TO ACT AS REPRESENTATIVE. Rodman & Renshaw, LLC ("RR") and Roth
Capital Partners, LLC ("ROTH") each consent and agree that SG Cowen & Co., LLC
("SG COWEN") will act as Representative of the Placement Agents under this
Agreement and with respect to the sale of the Stock. Accordingly, each of RR and
Roth authorizes SG Cowen to manage the Offering and the sale of the Stock and to
take such action in connection therewith as SG Cowen in its sole discretion
deems appropriate or desirable, consistent with the provisions of each Agreement
Among Underwriters previously entered into between SG Cowen and RR, and SG Cowen
and Roth, respectively, taking into account that the Offering of the Stock will
be in the form of a best efforts placement and not a firm commitment
underwriting.
33
If the foregoing is in accordance with your understanding of the
agreement between the Company and the Placement Agents, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
HALOZYME THERAPEUTICS, INC.
By: /s/ Jonathan Lim
--------------------
Name: Jonathan Lim
Title: CEO
Accepted as of
the date first above written:
SG COWEN & CO., LLC
By: /s/ Richard E. Gormley
----------------------
Name: Richard E. Gormley
Title: Managing Director
RODMAN & RENSHAW, LLC
By: /s/ Edward Rubin
----------------------
Name: Edward Rubin
Title: Managing Director
ROTH CAPITAL PARTNERS, LLC
By: /s/ Theodore D. Roth
----------------------
Name: Theodore D. Roth
Title: Managing Director
34
SCHEDULE 1
PLACEMENT AGENTS
SG Cowen & Co., LLC
Rodman & Renshaw, LLC
Roth Capital Partners, LLC
35
EXHIBIT A
FORM OF SUBSCRIPTION AGREEMENT
36
EXHIBIT B
FORM OF LOCK-UP AGREEMENT
37
EXHIBIT C-1
LEGAL OPINION OF DLA PIPER RUDNICK GRAY CARY US LLP
38
EXHIBIT C-2
LEGAL OPINION OF HALE LANE PEEK DENNISON AND HOWARD
39
EXHIBIT C-3
LEGAL OPINION OF DLA PIPER RUDNICK GRAY CARY US LLP
40