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EXHIBIT 1.1
STEMCELLS, INC.
Up to 7,500,000 Shares
Common Stock
($0.01 Par Value)
AGENCY AGREEMENT
October 25, 2004
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AGENCY AGREEMENT
October 25, 2004
C.E. Unterberg, Towbin, LLC
350 Madison Avenue
New York, NY 10017
Shoreline Pacific, LLC
655 Montgomery Street
San Francisco, CA 94111
as Agents
Ladies and Gentlemen:
StemCells, Inc., a Delaware corporation (the "Company"), proposes,
upon
the terms and subject to the conditions set
forth in this Agreement (together
with the exhibits attached hereto (the
"Agreement")) to offer for sale (the
"Offering") up to 7,500,000 shares (the
"Shares") of Common Stock, $.01 par
value per share (the "Common Stock"), of
the Company. In connection with the
Offering, the Company desires to engage
C.E. Unterberg, Towbin, LLC ("CEUT") and
Shoreline Pacific, LLC ("SP") as its
exclusive agents (the "Agents"), upon the
terms and subject to the conditions set
forth in this Agreement. The Shares and
the Offering are described in the
Prospectus that is referred to below.
The Company has prepared and filed, in accordance with the
provisions
of the Securities Act of 1933, as amended,
and the rules and regulations
thereunder (collectively, the "Act"), with
the Securities and Exchange
Commission (the "Commission") a
registration statement under the Act on Form S-3
(File No. 333-83992) filed with the
Commission on March 8, 2002 (such
registration statement as amended
(including Amendment No. 1 thereto filed with
the Commission on July 2, 2002) or
supplemented (other than supplements relating
to offerings of securities other than the
Offering) from time to time, the
"registration statement"). The registration
statement has been declared by the
Commission to be effective under the Act.
The Company will file with the
Commission pursuant to Rule 424(b) under
the Act a final prospectus supplement
to the Basic Prospectus (as defined below),
describing the Shares and the
offering thereof, in such form as has been
provided to or discussed with, and
approved, by the Agents.
The term "Registration Statement" as used in this Agreement means
the
registration statement, at the time it
became effective and as supplemented
(other than supplements relating to
offerings of securities other than the
Offering) or amended, including (i) all
financial schedules and exhibits
thereto, and (ii) all documents
incorporated by reference or deemed to be
incorporated by reference therein, which
schedules, exhibits and documents have
been filed with the Commission pursuant to
its Electronic Data Gathering
Analysis and Retrieval System ("EDGAR").
The term "Basic Prospectus" as used in
this Agreement means the basic prospectus
dated July 3, 2002 filed with the
Commission under Rule 424(b)(2) on August
28, 2002 for use in connection with
the offer and/or sale of the Shares
pursuant to this Agreement. "Preliminary
Prospectus Supplement" shall mean any
preliminary prospectus supplement to the
Basic Prospectus that describes the Shares
and the Offering and is used prior to
filing of the Prospectus Supplement,
together with the Basic Prospectus. The
term "Prospectus Supplement" as used in
this Agreement means any final
prospectus supplement specifically relating
to the Shares, in the form filed
with, or transmitted for filing to, the
Commission pursuant to Rule 424 under
the Act. The term "Prospectus" as used in
this Agreement means the Basic
Prospectus as supplemented by the
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Prospectus Supplement except that if such
Basic Prospectus is amended or
supplemented (other than supplements
relating to offerings of securities other
than the Offering) on or prior to the date
on which the Prospectus Supplement
was first filed pursuant to Rule 424, the
term "Prospectus" shall refer to the
Basic Prospectus as so amended or
supplemented and as supplemented by the
Prospectus Supplement. Any reference herein
to the registration statement, the
Registration Statement, the Basic
Prospectus, any Preliminary Prospectus
Supplement, any Prospectus Supplement or
the Prospectus shall be deemed to refer
to and include (i) the documents
incorporated by reference therein pursuant to
Form S-3 (the "Incorporated Documents") and
(ii) the copy of the Registration
Statement, the Basic Prospectus, the
Prospectus Supplement, the Prospectus or
the Incorporated Documents filed with the
Commission pursuant to EDGAR. Any
reference herein to the terms "amend,"
"amendment" or "supplement" with respect
to the Registration Statement, the Basic
Prospectus, the Preliminary Prospectus
Supplement, the Prospectus Supplement or
the Prospectus shall be deemed to refer
to and include the filing of any document
under the Securities Exchange Act of
1934, as amended, and the rules and
regulations thereunder (collectively, the
"Exchange Act") after the effective date of
the Registration Statement, or the
date of the Basic Prospectus, the
Preliminary Prospectus Supplement or the
Prospectus Supplement, as the case may be,
deemed to be incorporated therein by
reference. As used herein, "business day"
shall mean a day on which the New York
Stock Exchange is open for trading.
The Company hereby confirms its agreement with the Agents as
follows:
1. Agreement to Act as Agents. Upon the basis of the
representations
and warranties of the Company and subject
to the terms and conditions set forth
in this Agreement and in the letter
agreement dated October 25, 2004 between the
Company and the Agents (the "Engagement
Letter"), the Company engages the
Agents, severally and not jointly, to act
as its exclusive agents, on a
reasonable "best efforts" basis, in
connection with the offer and sale by the
Company of the Shares. As compensation for
services rendered, at the time of
purchase (as defined below), the Company
shall pay to the Agents a fee (to be
divided equally between the Agents and paid
in the manner described below) equal
to 6.0% of the gross proceeds received by
the Company from the sale of the
Shares in the Offering. The Shares are
being offered and sold at a price of
$3.00 per Share.
This Agreement shall not give rise to any commitment by the Agents
or
any of their affiliates to underwrite or
purchase any of the Shares or otherwise
provide any financing. Subscription for
Shares shall be evidenced by, and the
sale of such Shares shall be made pursuant
to, purchase agreements in
substantially the form included as Exhibit
A hereto duly executed by each
purchaser of the Shares and the Company
(the "Purchase Agreements"). Persons who
agree to purchase Shares pursuant to the
Purchase Agreements that are accepted
by the Company are hereinafter referred to
as the "Purchasers."
2. Payment and Delivery. Subject to the terms and conditions hereof
and
of the Purchase Agreements, payment of the
purchase price for, and delivery of
certificates for, the Shares for which the
Company has received Purchase
Agreements acceptable to the Company shall
be made at the office of CEUT in New
York City (or at such other place as shall
be agreed upon by the Agents and the
Company), at 10:00 A.M., New York City
time, on or about October 28, 2004
(unless another time shall be agreed to by
the Agents and the Company). The time
at which such payment and delivery are made
is hereinafter sometimes called "the
time of purchase" and the date upon which
the time of purchase occurs is
hereinafter sometimes called the "Closing
Date." Subject to the terms and
conditions hereof and of the Purchase
Agreements, payment of the purchase price
for the Shares purchased by a Purchaser
shall be made to the Company in the
manner described below against delivery of
certificates for the Shares, through
the facilities of The Depository Trust
Company ("DTC") for subsequent delivery
to such Purchaser, and such Shares shall be
registered in such name or names and
shall be in such denominations, as the
Purchaser thereof may request at least
one business day before the time of
purchase.
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CEUT agrees to hold the purchase price delivered to it by persons
who
agree to purchase Shares in escrow as
contemplated by the form of Purchase
Agreement included as Exhibit A hereto.
CEUT will, from time to time upon
request of the Company, confirm to the
Company the aggregate amount of funds
delivered to it in escrow by persons who
have executed and delivered a Purchase
Agreement. Subject to the terms and
conditions hereof and of the Purchase
Agreements, at the time of purchase CEUT
shall deliver to the Company by Federal
Funds wire transfer of same day funds the
purchase price for any such Shares
payable to the Company that has been
deposited in the escrow account by the
Purchasers, reduced by the amount of the
fee payable to the Agents hereunder and
the Agents' bona fide estimate of the
amount of expense reimbursement to which
they are entitled hereunder, against
delivery of such Shares to the Purchasers
through DTC as described above. CEUT shall
concurrently deliver to SP by Federal
Funds wire transfer of same day funds the
fee payable to SP hereunder and SP's
bona fide estimate of the amount of expense
reimbursement to which SP is
entitled hereunder. As soon as practicable
after the Closing Date, the Agents
will submit to the Company their final
expense reimbursement invoices and the
Company and/or CEUT, as appropriate, will
make the necessary reconciling
payment(s).
Deliveries of the documents described in Section 5 hereof with
respect
to the purchase of the Shares shall be made
at the offices of CEUT in New York
City at 10:00 A.M., New York City time, on
the Closing Date.
3. Representations and Warranties of the Company. The Company
represents, warrants and covenants to and
agrees with the Agents that:
(a) the Registration Statement was declared effective under
the Act on July 2, 2002; no stop order of the Commission preventing
or
suspending the use of the Basic Prospectus, the Preliminary
Prospectus
Supplement, the Prospectus Supplement or the Prospectus or the
effectiveness of the Registration Statement has been issued and
no
proceedings for such purpose have been instituted or, to the
Company's
knowledge, are threatened by the Commission; the Company is
eligible to
use Form S-3 for the Offering; such Registration Statement at the
date
of this Agreement meets, and the Offering complies with, the
requirements of Rule 415 under the Act. The Registration
Statement
complied when it became effective, complies, and will comply at
the
time of purchase, and the Prospectus conformed as of its date,
conforms, and will conform at the time of purchase, in each case in
all
material respects with the requirements of the Act; any
statutes,
regulations, contracts or other documents that are required to
be
described in the Registration Statement or the Prospectus or to
be
filed as exhibits to the Registration Statement have been and will
be
so described or filed; there are no documents required to be filed
with
the Commission in connection with the transaction contemplated
hereby
that have not been filed as required pursuant to the Act or will
not be
filed within the requisite time period; and the Registration
Statement
did not at the time of effectiveness, does not and will not at the
time
of purchase contain an untrue statement of a material fact or omit
to
state a material fact required to be stated therein or necessary
to
make the statements therein not misleading, and the Prospectus did
not
as of its date, does not and will not at the time of purchase
contain
an untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the
statements
therein, in light of the circumstances under which they were made,
not
misleading; provided, however, that the Company makes no warranty
or
representation with respect to any statement contained in the
Registration Statement or the Prospectus in reliance upon and
in
conformity with information concerning an Agent and furnished
in
writing by or on behalf of such Agent to the Company expressly
for use in the Registration Statement or the Prospectus; the
Company
has not distributed and will not distribute any offering material
in
connection with the offering or sale of the Shares other than
the
Registration Statement, the then most recent Preliminary
Prospectus
Supplement or Prospectus Supplement, as applicable, the Basic
Prospectus and the Prospectus; the Company has timely filed all
reports
required of it to be filed
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pursuant to the Act and the Exchange Act and has filed all such
reports
in the manner prescribed thereby; the Incorporated Documents, when
they
were filed with the Commission (or, to the extent such documents
were
amended, as amended), conformed in all material respects to the
requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder, and none of such
documents,
when they were filed with the Commission(or, to the extent such
documents were amended, as amended), contained any untrue statement
of
a material fact or omitted to state a material fact necessary to
make
the
statements, in light of the circumstances under which they were
made, therein not misleading; and any further documents so filed
and
incorporated by reference in the Basic Prospectus or Prospectus
Supplement, when such documents are filed with the Commission,
will
comply in all material respects with the requirements of the
Exchange
Act and the applicable rules and regulations of the Commission
thereunder, 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, in light of the circumstances under which they
were
made, not misleading;
(b) as of the date of the Prospectus Supplement the Company
has, and as of the time of purchase the Company shall have, an
authorized capitalization as set forth in the Prospectus
Supplement
under the caption "Description of Capital Stock"; all of the issued
and
outstanding shares of capital stock, including the Common Stock, of
the
Company have been duly authorized and validly issued and are fully
paid
and non-assessable, have been issued in compliance with all federal
and
state securities laws and were not issued in violation of any
preemptive right, resale right, right of first refusal or
similar
right;
(c) as of October 22, 2004 there were 54,256,938 shares of
Common Stock outstanding and the Company had reserved an aggregate
of
12,255,819 shares of Common Stock for issuance upon exercise of
outstanding stock options and warrants, in each case as described
in
the Prospectus; since October 22, 2004, the Company has not issued
any
securities other than Common Stock of the Company pursuant to
the
exercise of previously outstanding options in connection with
the
Company's employee stock purchase and option plans (the
"Plans"),
options granted pursuant to the Plans in the ordinary course of
business consistent with past practice and Common Stock issued
pursuant
to the exercise of previously outstanding warrants, in each case
as
disclosed in the Prospectus; there are no authorized or
outstanding
options, warrants, preemptive rights, resale 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
or other securities of the Company other than pursuant to the
Purchase
Agreements and this Agreement and those described in the
Prospectus;
the description of the Company's stock option, stock bonus and
other
stock plans or arrangements, and the options, warrants or other
rights
granted thereunder, set forth in the Registration Statement and
the
Prospectus accurately and fairly presents the information required
by
the Act to
be disclosed therein with respect to such plans,
arrangements, options and rights; the Rights are not now and never
have
been transferable separately from the shares of Common Stock or
exercisable; no person, including any of the Company's stockholders
at
the time of the issuance of the Rights, has to the knowledge of
the
Company at any time been an Acquiring Person and no Distribution
Date
or Shares Acquisition Date has occurred or been proposed;
(d) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
State
of Delaware, with full corporate power and authority to own, lease
and
operate its properties and conduct its business as described in
the
Registration Statement and the Prospectus, to execute and deliver
this
Agreement and to issue, sell and deliver the Shares as
contemplated
herein; no governmental proceeding has been instituted in the State
of
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Delaware revoking, limiting or curtailing, or seeking to revoke,
limit
or curtail, such power and authority.
(e) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where
the
ownership or leasing of its properties or the conduct of its
business
requires such qualification, except where the failure to be so
qualified and in good standing would not, individually or in
the
aggregate, have a material adverse effect on the business,
properties,
management, condition, financial or otherwise, operations,
prospects or
results of operation of the Company and the Subsidiaries (as
hereinafter defined) taken as a whole (a "Material Adverse
Effect"); no
governmental proceeding has been instituted in any such
jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit
or
curtail, such qualification, except for such proceedings as would
not,
individually or in the aggregate, have a Material Adverse
Effect.
(f) The Company has no subsidiaries (as defined in the Act)
other than StemCells California, Inc., a California corporation
(collectively, the "Subsidiaries"); except as disclosed in the
Registration Statement or the Prospectus, the Company owns all of
the
issued and
outstanding capital stock of each of the Subsidiaries; none
of the subsidiaries is a "significant subsidiary" within the
meaning of
rule 1-02(w) of Regulation S-X or is otherwise material to the
business
or operations of the Company; other than the capital stock of
the
Subsidiaries and except as disclosed in the Registration Statement
or
the Prospectus, the Company does not own, directly or indirectly,
any
shares of stock or any other equity or long-term debt securities of
any
corporation or have any equity interest in any firm, partnership,
joint
venture, association or other entity; complete and correct copies
of
the certificate of incorporation and the bylaws of the Company and
the
Subsidiaries and all amendments thereto have been delivered to
the
Agents, and no changes therein will be made subsequent to the
date
hereof and prior to the time of purchase; each Subsidiary has been
duly
incorporated and is validly existing as a corporation in good
standing
under the laws of the jurisdiction of its incorporation, with
full
corporate power and authority to own, lease and operate its
properties
and to conduct its business as described in the Registration
Statement
or the Prospectus; each Subsidiary is duly qualified to do business
as
a foreign corporation and is in good standing in each
jurisdiction
where the ownership or leasing of its properties or the conduct of
its
business requires such qualification, except where the failure to
be so
qualified and in good standing would not, individually or in
the
aggregate, have a Material Adverse Effect; no proceeding has
been
instituted in any such jurisdiction, revoking, limiting or
curtailing,
or seeking to revoke, limit or curtail, such power and authority
or
qualification, except for any such proceedings as would not,
individually or in the aggregate, have a Material Adverse Effect;
all
of the outstanding shares of capital stock of each of the
Subsidiaries
held by the Company have been duly authorized and validly issued,
are
fully paid and non-assessable and are owned by the Company subject
to
no security interest, other encumbrance or adverse claims except
as
disclosed in the Registration Statement or the Prospectus, and
no
options, warrants or other rights to purchase, agreements or
other
obligations to issue or other rights to convert any obligation
into
shares of capital stock or ownership interests in the Subsidiaries
are
outstanding except as disclosed in the Registration Statement or
the
Prospectus;
(g) the Shares have been duly and validly authorized by the
Company and, when the Shares are issued and delivered against
payment
therefor as provided herein, the Shares will be duly and
validly
issued, fully
paid and non-assessable and will not be issued in
violation of statutory and contractual preemptive rights,
resale
rights, rights of first refusal and similar rights;
(h) the Common Stock (including the Shares) conforms in all
material respects to the description thereof contained in the
Registration Statement or the Prospectus, the certificates for
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the Shares are in due and proper form and the holders of the
Shares
will not be subject to personal liability under Delaware corporate
law
by reason of being such holders;
(i) this Agreement has been duly authorized, executed and
delivered by the Company;
(j) except as disclosed in the Registration Statement or the
Prospectus, neither the Company nor any of the Subsidiaries is
in
breach or violation of or in default under (nor has any event
occurred
which with notice, lapse of time or both would result in any breach
or
violation of, constitute a default under or give the holder of
any
indebtedness (or a person acting on such holder's behalf) the right
to
require the repurchase, redemption or repayment of all or a part
of
such indebtedness under) (i) its respective certificate of
incorporation or bylaws, (ii) any law, order, rule, regulation,
writ,
injunction, judgment or decree of any court, government or
governmental
agency or body, domestic or foreign, having jurisdiction over
the
Company or any of its Subsidiaries or over their respective
properties,
or (iii) any indenture, mortgage, deed of trust, bank loan or
credit
agreement or other evidence of indebtedness, or any license,
lease,
contract or other agreement or instrument to which the Company or
any
of the Subsidiaries is a party or by which any of them or any of
their
properties is bound, except in the case of clause (ii) and (iii)
above
where such breach, violation or default would not, individually or
in
the aggregate, have a Material Adverse Effect and in the case of
clause
(i) above for such breaches, violations or defaults with respect to
the
certificate of incorporation or bylaws of Subsidiaries of the
Company
as would not, individually or in the aggregate, have a Material
Adverse
Effect;
(k) the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby
and
thereby, including the issuance and sale of the Shares, will
not
conflict with, result in any breach or violation of or constitute
a
default under (nor constitute any event which with notice, lapse
of
time or both would result in any breach or violation of or
constitute a
default under or give the holder of any indebtedness (or a
person
acting on such holder's behalf) the right to require the
repurchase,
redemption or repayment of all or a part of such indebtedness
under)
(i) the certificate of incorporation or bylaws of the Company or
any of
the Subsidiaries, (ii) any indenture, mortgage, deed of trust,
bank
loan or credit agreement or other evidence of indebtedness, or
any
license, lease, contract or other agreement or instrument to which
the
Company or any of the Subsidiaries is a party or by which any of
them
or any of their respective properties is bound, or (iii) any
federal,
state, local or foreign statute, law, regulation or rule or any
decree,
judgment or order applicable to the Company or any of the
Subsidiaries
or any of their respect properties, except where such breach,
violation
or default would not, individually or in the aggregate, have a
Material
Adverse Effect;
(l) the Common Stock (including the Shares) is registered
under the Exchange Act and the outstanding shares of Common Stock
of
the Company are quoted on The Nasdaq SmallCap Market ("Nasdaq") and
the
Company has taken no action designed to, 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 Shares from Nasdaq,
nor
has the Company received any information suggesting that the
Commission
or (except
as disclosed in the Prospectus) Nasdaq is contemplating
terminating or suspending such registration or listing. All of
the
shares of Common Stock included in, or issuable upon exercise
or
conversion of, the Shares were described in a "Notification Form
for
Listing of Additional Shares" filed with Nasdaq. The Company
has
complied with the requirements of Rule 4350(i)(2) of the Nasdaq
Marketplace Rules in connection with the Offering;
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(m) no approval, authorization, consent or order of or filing
with any federal, state, local or foreign governmental or
regulatory
commission, board, body, authority or agency or of or with Nasdaq,
or
approval of the shareholders of the Company, is required in
connection
with the issuance and sale of the Shares or the consummation by
the
Company of the transactions contemplated hereby other than
registration
under the Act of the offer and sale of the Shares and filings
with
Nasdaq, each of which has been effected, and any necessary
qualification under the securities or blue sky laws of the
various
jurisdictions in which Shares are being offered or under the rules
and
regulations of the National Association of Securities Dealers,
Inc.;
(n) except as disclosed in the Registration Statement or the
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, and (ii) except as provided herein or in the
Engagement
Letter, no person has the right to act as an underwriter,
placement
agent or financial advisor to the Company in connection with the
offer
and sale of the Shares, in the case of each of the foregoing
clauses
(i) and (ii), whether as a result of the filing or effectiveness of
the
Registration Statement or the sale of the Shares as
contemplated
thereby or otherwise; except as disclosed in the Registration
Statement
or the Prospectus, no person has the right, contractual or
otherwise,
to cause the Company to register under the 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, whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the
Shares
as contemplated thereby or otherwise;
(o) each of the Company and the Subsidiaries has all necessary
licenses, authorizations, consents and approvals and has made
all
necessary filings required under any federal, state, local or
foreign
law, regulation or rule, in order to conduct its respective
business as
currently conducted and has conducted such business in accordance
with
such laws, regulations and rules, except where the failure to have
such
licenses, authorizations, consents and approvals or the failure
to
conduct business in accordance with such laws, rules and
regulations
would not, individually or in the aggregate, have a Material
Adverse
Effect; neither the Company nor any of the Subsidiaries is in
violation
of, or in default under, or has received notice of any
proceedings
relating to revocation or modification of, any such license,
authorization, consent or approval or any federal, state, local
or
foreign law, regulation or rule or any decree, order or
judgment
applicable to the Company or any of such Subsidiaries, except
where
such violation, default, revocation or modification would not,
individually or in the aggregate, have a Material Adverse
Effect;
(p) all legal or governmental proceedings, affiliate
transactions, contracts, licenses, agreements, leases or documents
of a
character required to be described in the Registration Statement or
the
Prospectus or to be filed as an exhibit to the Registration
Statement
have been so described or filed as required;
(q) except as disclosed in the Registration Statement or the
Prospectus, there are no actions, suits, claims, investigations
or
proceedings pending or, to the Company's knowledge, threatened to
which
the Company or any of the Subsidiaries or any of their
respective
directors or officers is or would be a party or of which any of
their
respective properties is or would be subject at law or in
equity,
before or by any federal, state, local or foreign governmental
or
regulatory commission, board, body, authority or agency, except
any
such action, suit, claim, investigation or proceeding which would
not
result in a judgment, decree or order having, individually or in
the
aggregate, a Material Adverse Effect or prevent consummation of
the
transactions contemplated hereby;
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(r) Grant Thornton LLP and Ernst & Young LLP, whose reports
on
the consolidated financial statements of the Company and the
Subsidiaries are filed with the Commission as part of the
Registration
Statement and the Prospectus, are independent public accountants
as
required by the Act and the Exchange Act;
(s) the consolidated financial statements included in the
Registration Statement or the Prospectus, together with the
related
notes and schedules, present fairly in all material respects
the
consolidated financial position of the Company and the
consolidated
Subsidiaries as of the dates indicated and the consolidated results
of
operations and cash flows of the Company and the consolidated
Subsidiaries for the periods specified and comply in all
material
respects with the requirements of the Act and have been prepared
in
conformity with generally accepted accounting principles applied on
a
consistent basis during the periods involved except as set forth in
the
notes thereto and subject, in the case of unaudited financial
statements, to normal year-end adjustments, which are not expected
to
be material in amount; any pro forma financial statements or
data
included in the Registration Statement or the Prospectus comply
with
the requirements of Regulation S-X of the Act, the assumptions used
in
the preparation of such pro forma financial statements and data
are
reasonable, the pro forma adjustments used therein are appropriate
to
give effect to the transactions or circumstances described therein
and
the pro forma adjustments have been properly applied to the
historical
amounts in the compilation of those statements and data; the
supporting
exhibits and schedules in the Registration Statement, if any,
present
fairly in all material respects the information required to be
stated
therein; the other financial and statistical data set forth in
the
Registration Statement or the Prospectus are accurately presented
and
prepared on a basis consistent with the financial statements and
books
and records of the Company; there are no financial statements
(historical or pro forma) or supporting schedules or exhibits that
are
required to be included in the Registration Statement or the
Prospectus
that are not included as required; and the Company and the
consolidated
Subsidiaries do not have any material liabilities or
obligations,
direct or contingent (including any off-balance sheet obligations),
not
disclosed in the Registration Statement or the Prospectus;
(t) except as set forth in the Registration Statement or the
Prospectus, subsequent to the respective dates as of which
information
is given in the Registration Statement and the Prospectus, there
has
not been (i) any material adverse change, or any development
involving
a prospective material adverse change, in the business,
properties,
management, condition, financial or otherwise, operations,
prospects or
results of operation of the Company and the Subsidiaries taken as
a
whole, (ii) any transaction which is material to the Company and
the
Subsidiaries taken as a whole, (iii) any obligation, direct or
contingent (including any off-balance sheet obligations), incurred
by
the Company or the Subsidiaries, which is material to the Company
and
the Subsidiaries taken as a whole, (iv) any change in the capital
stock
(other than pursuant to the exercise or conversion of outstanding
stock
options or warrants described in the Prospectus) or any material
change
in the outstanding indebtedness of the Company or the Subsidiaries
or
(v) any dividend or distribution of any kind declared, paid or made
on
any class of capital stock of the Company;
(u) neither the Company nor any of the Subsidiaries is nor,
after giving effect to the Offering as described in the
Prospectus,
will any of them be an "investment company" or an entity
"controlled"
by an "investment company," as such terms are defined in the
Investment
Company Act of 1940, as amended (the "Investment Company Act");
(v) the Company and any "employee benefit plan" (as defined
under the Employee Retirement Income Security Act of 1974, as
amended,
and the regulations and published interpretations thereunder
(collectively, "ERISA")) established or maintained by the Company
or
8
<PAGE>
its "ERISA Affiliates" (as defined below) are in compliance in
all
material respects with ERISA; "ERISA Affiliate" means, with respect
to
the Company, any member of any group of organizations described
in
Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of
1986,
as amended, and the regulations and published interpretations
thereunder (the "Code") of which the Company is a member; no
"reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occu
