ARIAD
PHARMACEUTICALS, INC.
PLACEMENT
AGENT AGREEMENT
LAZARD
CAPITAL MARKETS LLC
30 Rockefeller Plaza
New York, New York 10020
1.
Introduction .
ARIAD Pharmaceuticals, Inc., a Delaware corporation (the “
Company ”), proposes to issue and sell to the
purchasers, pursuant to the terms and conditions 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 ”), up to an aggregate of 14,378,698 units
(the “ Units ”) with each Unit consisting of
(i) one share of common stock, $0.001 par value per share (the
“ Common Stock ”) of the Company and
(ii) one warrant to purchase 0.75 shares of Common Stock (the
“ Warrants ”). The terms and conditions of the
Warrants are set forth in the form of Exhibit B
attached hereto. The Company hereby confirms that Lazard Capital
Markets LLC (the “ Placement Agent ”) acted as
the Placement Agent in accordance with the terms and conditions
hereof.
2.
Agreement to Act as
Placement Agent; Placement of Units . On the basis of
the representations, warranties and agreements of the Company
herein contained, and subject to all the terms and conditions of
this Agreement:
2.1
The Company has authorized and hereby acknowledges that the
Placement Agent has acted as its exclusive agent to solicit offers
for the purchase of all or part of the Units from the Company in
connection with the proposed offering of the Units (the “
Offering ”). Until the earlier of (i) the date
this agreement is terminated and (ii) the Closing Date (as
defined in Section 4 hereof), the Company shall not,
without the prior written consent of the Placement Agent, solicit
or accept offers to purchase Units otherwise than through the
Placement Agent. The Placement Agent may utilize the expertise of
Lazard Frères & Co. LLC in connection with the Placement
Agent’s activities.
2.2
The Company hereby acknowledges that the Placement Agent, as agent
of the Company, used its best efforts to solicit offers to purchase
the Units from the Company on the terms and subject to the
conditions set forth in the Prospectus (as defined below). The
Placement Agent shall use its best efforts to assist the Company in
obtaining performance by each Purchaser whose offer to purchase
Units was solicited by the Placement Agent and accepted by the
Company, but the Placement Agent 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 Agent be
obligated to underwrite or purchase any Units for its own account
and, in soliciting purchases of Units, the Placement Agent acted
solely as the Company’s agent and not as principal.
Notwithstanding the foregoing and except as otherwise provided in
Section 2.3 , it is understood and agreed that the Placement
Agent (or its affiliates) may, solely at its discretion and without
any obligation to do so, purchase Units as principal.
2.3
Subject to the provisions of this Section 2 , offers
for the purchase of Units were solicited by the Placement Agent as
agent for the Company at such times and in such amounts as the
Placement Agent deemed advisable. The Placement Agent communicated
to the Company, orally or in writing, each reasonable offer to
purchase Units received by it as agent of the Company. The Company
shall have the sole right to accept offers to purchase the Units
and may reject any such offer, in whole or in part. The Placement
Agent has the right, in its discretion reasonably exercised,
without notice to the Company, to reject any offer to purchase
Units received by it, in whole or in part, and any such rejection
shall not be deemed a breach of this Agreement.
2.4
The Units are being sold to the Purchasers at a price of $1.69 per
Unit. The purchases of the Units by the Purchasers shall be
evidenced by the execution of Subscription Agreements by each of
the Purchasers and the Company.
2.5
As compensation for services rendered, on the Closing Date (as
defined in Section 4 hereof), the Company shall pay to
the Placement Agent by wire transfer of immediately available funds
to an account or accounts designated by the Placement Agent, an
aggregate amount equal to five percent (5.0%) of the gross proceeds
received by the Company from the sale of the Units on such Closing
Date (the “ Placement Fee ”).
2.6
No Units which the Company has agreed to sell pursuant to this
Agreement and the Subscription Agreements shall be deemed to have
been purchased and paid for, or sold by the Company, until such
Units shall have been delivered to the Purchaser thereof against
payment by such Purchaser. If the Company shall default in its
obligations to deliver Units to a Purchaser whose offer it has
accepted, the Company shall indemnify and hold the Placement Agent
harmless against any loss, claim, damage or expense arising from or
as a result of such default by the Company in accordance with the
procedures set forth in Section 8(c) herein.
3.
Representations and
Warranties of the Company . The Company represents and
warrants to, and agrees with, the Placement Agent and the
Purchasers that:
(a)
The Company has prepared and filed in conformity with the
requirements of the Securities Act of 1933, as amended (the “
Securities Act ”), and published rules and regulations
thereunder (the “ Rules and Regulations ”)
adopted by the Securities and Exchange Commission (the “
Commission ”) a “shelf” Registration
Statement (as hereinafter defined) on Form S-3 (File
No. 333-140333), which became effective as of February 6,
2007 (the “ Effective Date ”), including a base
prospectus relating to the
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securities
registered pursuant to such Registration Statement (the “
Base Prospectus ”), and such amendments and
supplements thereto as may have been required to the date of this
Agreement. The term “ Registration Statement ”
as used in this Agreement means the registration statement
(including all exhibits, financial schedules and all documents and
information deemed to be a part of the Registration Statement
pursuant to Rule 430A of the Rules and Regulations), as
amended and/or supplemented to the date of this Agreement,
including the Base Prospectus. The Registration Statement is
effective under the Securities Act and no stop order preventing or
suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the Prospectus has been issued
by the Commission and no proceedings for that purpose have been
instituted or, to the knowledge of the Company, are threatened by
the Commission. The Company, if required by the Rules and
Regulations of the Commission, will file the Prospectus (as defined
below), with the Commission pursuant to Rule 424(b) of the Rules
and Regulations. The term “ Prospectus ” as used
in this Agreement means the Prospectus, in the form in which it is
to be filed with the Commission pursuant to Rule 424(b) of the
Rules and Regulations, or, if the Prospectus is not to be filed
with the Commission pursuant to Rule 424(b), the Prospectus in
the form included as part of the Registration Statement as of the
Effective Date, except that if any revised prospectus or prospectus
supplement shall be provided to the Placement Agent by the Company
for use in connection with the offering and sale of the Units which
differs from the Prospectus (whether or not such revised prospectus
or prospectus supplement is required to be filed by the Company
pursuant to Rule 424(b) of the Rules and Regulations), the term
“ Prospectus ” shall refer to such revised
prospectus or prospectus supplement, as the case may be, from and
after the time it is first provided to the Placement Agent for such
use. Any preliminary prospectus or prospectus subject to completion
included in the Registration Statement or filed with the Commission
pursuant to Rule 424 of the Rules and Regulations is hereafter
called a “ Preliminary Prospectus. ” Any
reference herein to the Registration Statement, any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein 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 last to occur of the Effective Date, the
date of the Preliminary Prospectus, or the date of the Prospectus,
and any reference herein to the terms “amend,”
“amendment,” or “supplement” with respect
to the Registration Statement, any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include (i) the
filing of any document under the Exchange Act after the Effective
Date, the date of such Preliminary Prospectus or the date of the
Prospectus, as the case may be, which is incorporated by reference
and (ii) any such document so filed. If the Company has filed
an abbreviated registration statement to register additional
securities pursuant to Rule 462(b) under the Rules and Regulations
(the “ 462(b) Registration Statement ”), then
any reference herein to the Registration Statement shall also be
deemed to include such 462(b) Registration Statement.
(b)
As of the Applicable Time (as defined below) and as of the Closing
Date, neither (i) any General Use Free Writing Prospectus (as
defined below) issued at or prior to the Applicable Time, and the
Pricing Prospectus (as defined below) and the information included
on Schedule A hereto, all considered together
(collectively, the “ General Disclosure Package
”), (ii) any individual Limited Use Free
Writing
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Prospectus
(as defined below) issued at or prior to the Applicable Time, nor
(iii) the bona fide electronic road show (as defined in
Rule 433(h)(5) of the Rules and Regulations), if any, that has
been made available without restriction to any person, when
considered together with the General Disclosure Package, included
or will include, any untrue statement of a material fact or omitted
or as of the Closing Date will omit, to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however , that the Company makes no
representations or warranties as to information contained in or
omitted from any Issuer Free Writing Prospectus, in reliance upon,
and in conformity with, written information furnished to the
Company by the Placement Agent specifically for inclusion therein,
which information the parties hereto agree is limited to the
Placement Agent’s Information (as defined in
Section 16 ). As used in this paragraph (b) and
elsewhere in this Agreement:
“
Applicable Time ” means 5:00 P.M., New York
time, on the date of this Agreement.
“
General Use Free Writing Prospectus ” means any
Issuer Free Writing Prospectus that is identified on
Schedule A to this Agreement.
“
Issuer Free Writing Prospectus ” means any
“ issuer free writing prospectus, ” as defined
in Rule 433 of the Rules and Regulations relating to the Units
in the form filed or required to be filed with the Commission or,
if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g) of the Rules and
Regulations.
“
Limited Use Free Writing Prospectuses ” means
any Issuer Free Writing Prospectus that is not a General Use Free
Writing Prospectus.
“
Pricing Prospectus ” means the Preliminary
Prospectus, if any, and the Base Prospectus, each as amended and
supplemented immediately prior to the Applicable Time, including
any document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof.
(c)
No order preventing or suspending the use of any Preliminary
Prospectus, any Issuer Free Writing Prospectus or the Prospectus
relating to the Offering has been issued by the Commission, and no
proceeding for that purpose or pursuant to Section 8A of the
Securities Act has been instituted or, to the knowledge of the
Company, threatened by the Commission, and each Preliminary
Prospectus (if any), at the time of filing thereof, conformed in
all material respects to the requirements of the Securities Act and
the Rules and Regulations, and did not 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 the
light of the circumstances under which they were made, not
misleading; provided, however , that the Company makes no
representations or warranties as to information contained in or
omitted from any Preliminary Prospectus, in reliance upon, and in
conformity with, written information furnished to the Company by
the Placement Agent specifically for inclusion therein, which
information the parties hereto agree is limited to the Placement
Agent’s Information (as defined in Section 16
).
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(d)
At the time the Registration Statement became effective, at the
date of this Agreement and at the Closing Date, the Registration
Statement conformed and will conform in all material respects to
the requirements of the Securities Act and the Rules and
Regulations and did not and will not contain any untrue statement
of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading; the Prospectus, at the time the Prospectus was issued
and at the Closing Date, conformed and will conform in all material
respects to the requirements of the Securities Act and the Rules
and Regulations and did not and will not contain an 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;
provided, however , that the foregoing representations and
warranties in this paragraph (d) shall not apply to
information contained in or omitted from the Registration Statement
or the Prospectus in reliance upon, and in conformity with, written
information furnished to the Company by the Placement Agent
specifically for inclusion therein, which information the parties
hereto agree is limited to the Placement Agent’s Information
(as defined in Section 16 ).
(e)
Each Issuer Free Writing Prospectus, if any, as of its issue date
and at all subsequent times through the completion of the public
offer and sale of the Units or until any earlier date that the
Company notified or notifies the Placement Agent as described in
Section 5(e) , did not, does not and will not include
any information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement, Pricing
Prospectus or the Prospectus, including any document incorporated
by reference therein and any prospectus supplement deemed to be a
part thereof that has not been superseded or modified, or includes
an untrue statement of a material fact or omitted or would omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The
foregoing sentence does not apply to statements in or omissions
from any Issuer Free Writing Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by
the Placement Agent specifically for inclusion therein, which
information the parties hereto agree is limited to the Placement
Agent’s Information (as defined in Section 16
).
(f)
The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements
of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and none of such
documents contained any untrue statement of a material fact or
omitted to state any 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; and any
further documents so filed and incorporated by reference in the
Prospectus, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain any untrue statement of a material
fact or omit to state any 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.
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(g)
The Company is not an “ineligible issuer” in connection
with the offering pursuant to Rules 164, 405 and 433 under the
Securities Act. The Company has not, directly or indirectly,
distributed and will not distribute any offering material in
connection with the Offering other than any Preliminary Prospectus,
the Prospectus and other materials, if any, permitted under the
Securities Act and consistent with Section 5(b) below.
The Company will file with the Commission all Issuer Free Writing
Prospectuses (other than a “road show,” as defined in
Rule 433(d)(8) of the Rules and Regulations), if any, in the
time and manner required under Rules 163(b)(2) and 433(d) of
the Rules and Regulations.
(h)
The Company and each of its subsidiaries (as defined in
Section 14 ) has been duly organized and is validly
existing as corporations or other legal entities in good standing
(or the foreign equivalent thereof) under the laws of their
respective jurisdictions of organization. The Company and each of
its subsidiaries is duly qualified to do business and is in good
standing as foreign corporations or other legal entities in each
jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses require such
qualification and have all power and authority (corporate or other)
necessary to own or hold their respective properties and to conduct
the businesses in which each is engaged, except where the failure
to so qualify or have such power or authority (i) would not
have, singularly or in the aggregate, a material adverse effect on
the condition (financial or otherwise), results of operations,
assets, business or prospects of the Company and its subsidiaries
taken as a whole, or (ii) impair in any material respect the
ability of the Company to perform its obligations under this
Agreement or to consummate any transactions contemplated by the
Agreement, the General Disclosure Package or the Prospectus (any
such effect as described in clauses (i) or (ii), a “
Material Adverse Effect ”). The Company owns or
controls, directly or indirectly, only the following corporations,
partnerships, limited liability partnerships, limited liability
companies, associations or other entities: ARIAD Corporation, a
Delaware corporation; (ii) ARIAD Pharma, S.A., a Greece
company; (iii) ARIAD Pharma, Ltd., a United Kingdom
company.
(i)
The Company has the full right, power and authority to enter into
this Agreement, each of the Subscription Agreements and that
certain Escrow Agreement (the “ Escrow Agreement
”) dated as of the date hereof by and among the Company, the
Placement Agent and the escrow agent named therein, and to perform
and to discharge its obligations hereunder and thereunder; and each
of this Agreement, the Escrow 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 rights to indemnity and contribution hereunder may be
limited by federal or state securities laws and except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
(j)
The shares of Common Stock to be issued and sold by the Company to
the Purchasers hereunder and under the Subscription Agreements and
the shares of Common Stock issuable upon the exercise of the
Warrants (the “ Warrant Shares ”) have been
duly
6
and
validly authorized and the Common Stock, when issued and delivered
against payment therefor as provided herein and in the Subscription
Agreements and the Warrant Shares, when issued and delivered
against payment therefore as provided in the Warrants, will be duly
and validly issued, fully paid and non-assessable and free of any
preemptive or similar rights and will conform to the description
thereof contained in the General Disclosure Package and the
Prospectus.
(k)
The Company has an authorized capitalization as set forth in the
Pricing Prospectus, and all of the issued 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 General Disclosure Package and
the Prospectus. As of December 31, 2008, there were 71,365,339
shares of Common Stock issued and outstanding, no shares of
Preferred Stock, par value $0.001 of the Company issued and
outstanding, and 7,895,428 shares of Common Stock were issuable
upon the exercise of all options, warrants and convertible
securities outstanding as of such date. Since such date, the
Company has not issued any securities, other than Common Stock of
the Company issued pursuant to the exercise of stock options
previously outstanding under the Company’s stock plans or,
the issuance of restricted Common Stock under the Company’s
stock plans, the issuance of Common Stock pursuant to employee
stock purchase plans and the issuance of Common Stock to certain
shareholders of the Company’s former majority-owned
subsidiary, ARIAD Gene Therapeutics, Inc. (“AGTI”), in
connection with the merger of AGTI with and into the Company. All
of the Company’s options, warrants and other rights to
purchase or exchange any securities for shares of the
Company’s capital stock have been duly authorized and validly
issued and were issued in compliance with US federal and state
securities laws. 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
shares of capital stock, 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 or any of its subsidiaries
other than those described above or accurately described in the
General Disclosure Package. 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 General Disclosure Package and the Prospectus, accurately and
fairly present the information required to be shown with respect to
such plans, arrangements, options and rights.
(l)
All the outstanding shares of capital stock of each subsidiary of
the Company have been duly authorized and validly issued, are fully
paid and nonassessable and, except to the extent set forth in the
General Disclosure Package or the Prospectus, are owned by the
Company directly or indirectly through one or more wholly-owned
subsidiaries, free and clear of any claim, lien, encumbrance,
security interest, restriction upon voting or transfer or any other
claim of any third party, except as set forth in the security
agreements, dated March 12, 2003 by and between the Company
and certain subsidiaries and Citizens Bank of
Massachusetts.
7
(m)
The execution, delivery and performance of this Agreement, the
Subscription Agreements and the Escrow Agreement by the Company,
the issue and sale of the Units by the Company and the consummation
of the transactions contemplated hereby and thereby will not (with
or without notice or lapse of time or both) conflict with or result
in a breach or violation of any of the terms or provisions of,
constitute a default or Debt Repayment Triggering Event (as defined
below) under, give rise to any right of termination or other right
or the cancellation or acceleration of any right or obligation or
loss of a benefit under, or give rise to the creation or imposition
of any lien, encumbrance, security interest, claim or charge upon
any property or assets of the Company or any subsidiary pursuant
to, any material indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the charter or
by-laws (or analogous governing instruments, as applicable) of the
Company or any of its subsidiaries or any law, statute, rule,
regulation, judgment, order or decree of any court or governmental
agency or body, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets. A “ Debt Repayment Triggering Event ”
means any event or condition that gives, or with the giving of
notice or lapse of time would give the holder of any note,
debenture or other evidence of indebtedness (or any person acting
on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by
the Company or any of its subsidiaries.
(n)
Except for the registration of the Common Stock and Warrants under
the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the
Exchange Act and applicable state or foreign securities laws, the
Financial Industry Regulatory Authority (“ FINRA
”) and the Nasdaq Global Market (“ Nasdaq GM
”) in connection with the offering and sale of the Units by
the Company, no consent, approval, authorization or order of, or
filing, qualification or registration with, any court or
governmental agency or body, foreign or domestic, which has not
been made, obtained or taken and is not in full force and effect,
is required for the execution, delivery and performance of this
Agreement, the Subscription Agreements and the Escrow Agreement by
the Company, the offer or sale of the Units or the consummation of
the transactions contemplated hereby or thereby.
(o)
Deloitte & Touche LLP, who have audited certain financial
statements and related schedules included or incorporated by
reference in the Registration Statement, the General Disclosure
Package and the Prospectus, and have audited the Company’s
internal control over financial reporting, is an independent
registered public accounting firm as required by the Securities Act
and the Rules and Regulations and the Public Company Accounting
Oversight Board (United States) (the “ PCAOB ”).
Except as pre-approved in accordance with the requirements set
forth in Section 10A of the Exchange Act, Deloitte &
Touche LLP has not been engaged by the Company to perform any
“prohibited activities” (as defined in Section 10A of
the Exchange Act).
8
(p)
The financial statements, together with the related notes and
schedules, included or incorporated by reference in the General
Disclosure Package, the Prospectus and in the Registration
Statement fairly present the financial position and the results of
operations, changes in stockholders’ equity, and cash flows
of the Company and its consolidated subsidiaries and other
consolidated entities at the respective dates or for the respective
periods therein specified. Such statements and related notes and
schedules have been prepared in accordance with the generally
accepted accounting principles in the United States (“
GAAP ”) applied on a consistent basis throughout the
periods involved except as may be set forth in the related notes
included or incorporated by reference in the General Disclosure
Package and except that unaudited financial statements may not
contain footnotes as required by GAAP. The financial statements,
together with the related notes and schedules, included or
incorporated by reference in the General Disclosure Package and the
Prospectus comply in all material respects with the Securities Act,
the Exchange Act, and the Rules and Regulations and the rules and
regulations under the Exchange Act. No other financial statements
or supporting schedules or exhibits are required by the Securities
Act or the Rules and Regulations to be described, or included or
incorporated by reference in the Registration Statement, the
General Disclosure Package or the Prospectus. There is no pro forma
or as adjusted financial information which is required to be
included in the Registration Statement, the General Disclosure
Package, or and the Prospectus or a document incorporated by
reference therein in accordance with the Securities Act and the
Rules and Regulations which has not been included or incorporated
as so required.
(q)
Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included
or incorporated by reference in the General Disclosure Package, any
material loss or interference with its business from fire,
explosion, flood 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 or
contemplated in the General Disclosure Package; and, since such
date, there has not been any change in the capital stock (other
than the issuance of Common Stock issued pursuant to the exercise
of stock options under the Company’s stock plans, the
issuance of restricted Common Stock under the Company’s stock
plans, the issuance of Common Stock pursuant to employee stock
purchase plans and the issuance of Common Stock to certain
shareholders of AGTI in connection with the merger of AGTI with and
into the Company) or long-term debt of the Company or any of its
subsidiaries, or any material adverse changes, or any development
involving a prospective material adverse change, in or affecting
the business, assets, general affairs, management, financial
position, prospects, stockholders’ equity or results of
operations of the Company and its subsidiaries taken as a whole,
otherwise than as set forth or contemplated in the General
Disclosure Package.
(r)
Except as set forth in the General Disclosure Package, there is no
legal or governmental action, suit, claim or proceeding pending to
which the Company or any of its subsidiaries is a party or of which
any property or assets of the Company or any of its subsidiaries is
the subject which is required to be described in the Registration
Statement, the General Disclosure Package or the Prospectus or a
document incorporated by reference therein and is not described
therein, or which, singularly or in the aggregate, if
9
determined
adversely to the Company or any of its subsidiaries, could have a
Material Adverse Effect or prevent the consummation of the
transactions contemplated hereby; and to the best of the
Company’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by
others.
(s)
Neither the Company nor any of its subsidiaries is in
(i) violation of its charter or by-laws (or analogous
governing instrument, as applicable), (ii) 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
contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement 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) violation in any respect of any
law, ordinance, governmental rule, regulation or court order,
decree or judgment to which it or its property or assets may be
subject except, in the case of clauses (ii) and (iii) of
this paragraph (s), for any violations or defaults which,
singularly or in the aggregate, would not have a Material Adverse
Effect.
(t)
The clinical trials conducted by or on behalf of or sponsored by
the Company or in which the Company or its product candidates have
participated that are described in the General Disclosure Package
and Prospectus or the results of which are referred to in the
General Disclosure Package or Prospectus were and, if still
pending, are being conducted (and with respect to such clinical
trials being conducted on behalf of the Company, are, to the
Company’s knowledge, being conducted) in all material
respects in accordance with medical and scientific research
procedures that the Company reasonably believes are appropriate.
The descriptions in the General Disclosure Package and Prospectus
of the results of such clinical trials are accurate and fairly
present the data derived from such clinical trials, and the Company
has no knowledge of any studies or tests performed by or on behalf
of the Company the results of which are materially inconsistent
with or otherwise materially call into question the results
described or referred to in the General Disclosure Package and
Prospectus. Except to the extent disclosed in the General
Disclosure Package and the Prospectus, the Company has not received
any notices or other correspondence from the United States Food and
Drug Administration (“ FDA ”) or any other
governmental agency requiring the termination, suspension or
modification of any clinical trials that are described in the
General Disclosure Package or Prospectus or the results of which
are referred to in the General Disclosure Package or
Prospectus.
(u)
The Company and each of its subsidiaries possesses all licenses,
certificates, authorizations and permits issued by, and have made
all declarations and filings with, the appropriate local, state,
federal or foreign regulatory agencies or bodies which are
necessary or desirable for the ownership of their respective
properties or the conduct of their respective businesses as
described in the General Disclosure Package and the Prospectus
(collectively, the “ Governmental Permits ”)
except where any failures to possess or make the same, singularly
or in the aggregate, would not have a Material Adverse Effect. The
Company and its subsidiaries are in compliance with all such
Governmental Permits; all such Governmental Permits are valid and
in full force and effect, except where the validity or failure to
be in full force and effect would not,
10
singularly
or in the aggregate, have a Material Adverse Effect. All such
Governmental Permits are free and clear of any restriction or
condition that are in addition to, or materially different from
those normally applicable to similar licenses, certificates,
authorizations and permits. Neither the Company nor any subsidiary
has received notification of any revocation or modification (or
proceedings related thereto) of any such Governmental Permit and
the Company has no reason to believe that any such Governmental
Permit will not be renewed.
(v)
Neither the Company nor any of its subsidiaries is or, after giving
effect to the offering of the Units and the application of the
proceeds thereof as described in the General Disclosure Package and
the Prospectus, will become an “investment company”
within the meaning of the Investment Company Act of 1940, as
amended, and the rules and regulations of the Commission
thereunder.
(w)
Neither the Company, its subsidiaries nor any of the
Company’s or its subsidiaries’ 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.
(x)
The Company and its subsidiaries own or possess the right to use
all material patents, trademarks, trademark registrations, service
marks, service mark registrations, trade names, copyrights,
licenses, inventions, software, databases, know-how, Internet
domain names, trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures, and other intellectual property (collectively, “
Intellectual Property ”) necessary to carry on their
respective businesses as currently conducted, and as proposed to be
conducted and described in the General Disclosure Package and the
Prospectus, and, except as described in the General Disclosure
Package and the Prospectus, the Company is not aware of any claim
to the contrary or any challenge by any other person to the rights
of the Company and its subsidiaries with respect to the foregoing
except for those that could not have a Material Adverse Effect. The
Intellectual Property licenses described in the General Disclosure
Package and the Prospectus are valid, binding upon, and enforceable
by or against the parties thereto in accordance to its terms. The
Company and each of its subsidiaries has complied in all material
respects with, and is not in breach nor has received any asserted
or threatened claim of breach of, any Intellectual Property
license, except for any such breach that would not, singularly or
in the aggregate, have a Material Adverse Effect, and the Company
has no knowledge of any breach or anticipated breach by any other
person to any Intellectual Property license. The Company’s
and each of its subsidiary’s businesses as now conducted and
as proposed to be conducted does not and will not infringe or
conflict with any valid patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses or other Intellectual
Property or franchise right of any person. The Company has received
no claim alleging the infringement by the Company or any of its
subsidiaries of any patent, trademark, service mark, trade name,
copyright, trade secret, license in or other intellectual property
right or franchise right of any person. The Company and each of its
subsidiaries has taken all reasonable steps to protect,
11
maintain
and safeguard its rights in all Intellectual Property, including
the execution of appropriate nondisclosure and confidentiality
agreements. The consummation of the transactions contemplated by
this Agreement will not result in the loss or impairment of or
payment of any additional amounts with respect to, nor require the
consent of any other person in respect of, the Company’s or
any of its subsidiaries’ right to own, use, or hold for use
any of the Intellectual Property as owned, used or held for use in
the conduct of its business as currently conducted. The Company and
each subsidiary has at all times complied with all applicable laws
relating to privacy, data protection, and the collection and use of
personal information collected, used, or held for use by the
Company or any subsidiary in the conduct of the Company’s or
any subsidiary’s business. No claims have been asserted or,
to the Company’s knowledge, threatened against the Company or
any subsidiary alleging a violation of any person’s privacy
or personal information or data rights and the consummation of the
transactions contemplated hereby will not breach or otherwise cause
any violation of any law related to privacy, data protection, or
the collection and use of personal information collected, used, or
held for use by the Company or any of its subsidiaries in the
conduct of the Company’s or any of its subsidiaries’
businesses. The Company and each of its subsidiaries take
reasonable measures to ensure that such information is protected
against unauthorized access, use, modification, or other
misuse.
(y)
The Company and each of its subsidiaries has good and marketable
title in fee simple to, or have valid rights to lease or otherwise
use, all items of real or personal property which are material to
the business of the Company and its subsidiaries taken as a whole,
in each case free and clear of all liens, encumbrances, security
interests, claims and defects that do not, singularly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such
property by the Company or any of its subsidiaries; and all of the
leases and subleases material to the business of the Company and
its subsidiaries, considered as one enterprise, and under which the
Company or any of its subsidiaries holds properties described in
the General Disclosure Package and the Prospectus, are in full
force and effect, and neither the Company nor any subsidiary has
received any notice of any material claim of any sort that has been
asserted by anyone adverse to the rights of the Company or any
subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such
subsidiary to the continued possession of the leased or subleased
premises under any such lease or sublease.
(z)
No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the best of the Company’s
knowledge, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of
its or its subsidiaries’ principal suppliers, manufacturers,
customers or contractors, that could reasonably be expected,
singularly or in the aggregate, to have a Material Adverse Effect.
The Company is not aware that any key employee or significant group
of employees of the Company or any subsidiary plans to terminate
employment with the Company or any such subsidiary.
(aa)
No “prohibited transaction” (as defined in
Section 406 of the Employee Retirement Income Security Act of
1974, as amended, including the regulations and
12
published
interpretations thereunder (“ERISA”), or
Section 4975 of the Internal Revenue Code of 1986, as amended
from time to time (the “Code”)) or “accumulated
funding deficiency” (as defined in Section 302 of ERISA)
or any of the events set forth in Section 4043(b) of ERISA (other
than events with respect to which the thirty (30)-day notice
requirement under Section 4043 of ERISA has been waived) has
occurred or could reasonably be expected to occur with respect to
any employee benefit plan of the Company or any of its subsidiaries
which could, singularly or in the aggregate, have a Material
Adverse Effect. Each employee benefit plan of the Company or any of
its subsidiaries is in compliance in all material respects with
applicable law, including ERISA and the Code. The Company and its
subsidiaries have not incurred and could not reasonably be expected
to incur liability under Title IV of ERISA with respect to the
termination of, or withdrawal from, any pension plan (as defined in
ERISA). Each pension plan for which the Company or any of its
subsidiaries would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified, and
nothing has occurred, whether by action or by failure to act, which
could, singularly or in the aggregate, cause the loss of such
qualification.
(bb)
The Company and its subsidiaries are in compliance with all
foreign, federal, state and local rules, laws and regulations
relating to the use, treatment, storage and disposal of hazardous
or toxic substances or waste and protection of health and safety or
the environment which are applicable to their businesses (“
Environmental Laws ”), except where the failure to
comply would not, singularly or in the aggregate, have a Material
Adverse Effect. There has been no storage, generation,
transportation, handling, treatment, disposal, discharge, emission,
or other release of any kind of toxic or other wastes or other
hazardous substances by, due to, or caused by the Company or any of
its subsidiaries (or, to the Company’s knowledge, any other
entity for whose acts or omissions the Company or any of its
subsidiaries is or may otherwise be liable) upon any of the
property now or previously owned or leased by the Company or any of
its subsidiaries, or upon any other property, in violation of any
law, statute, ordinance, rule, regulation, order, judgment, decree
or permit or which would, under any law, statute, ordinance, rule
(including rule of common law), regulation, order, judgment, decree
or permit, give rise to any liability, except for any violation or
liability which would not have, singularly or in the aggregate with
all such violations and liabilities, a Material Adverse Effect; and
there has been no disposal, discharge, emission or other release of
any kind onto such property or into the environment surrounding
such property of any toxic or other wastes or other hazardous
substances with respect to which the Company has knowledge, except
for any such disposal, discharge, emission, or other release of any
kind which would not have, singularly or in the aggregate with all
such discharges and other releases, a Material Adverse Effect. In
the ordinary course of business, the Company and its subsidiaries
conducts periodic reviews of the effect of Environmental Laws on
their business and assets, in the course of which they identify and
evaluate 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 Governmental Permits issued thereunder, any related
constraints on operating activities and any potential liabilities
to third parties). On the basis of such reviews, the Company and
its subsidiaries have reasonably concluded that such
13
associated
costs and liabilities would not have, singularly or in the
aggregate, a Material Adverse Effect.
(cc)
The Company and its subsidiaries, each (i) has timely filed
all necessary federal, state, local and foreign tax returns, and
all such returns were true, complete and correct, (ii) has
paid all federal, state, local and foreign taxes, assessments,
governmental or other charges due and payable for which it is
liable, including, without limitation, all sales and use taxes and
all taxes which the Company or any of its subsidiaries is obligated
to withhold from amounts owing to employees, creditors and third
parties, and (iii) does not have any tax deficiency or claims
outstanding or assessed or, to the best of its knowledge, proposed
against any of them, except those, in each of the cases described
in clauses (i), (ii) and (iii) of this paragraph (cc),
that would not, singularly or in the aggregate, have a Material
Adverse Effect. The Company and its subsidiaries, each has not
engaged in any transaction which is a corporate tax shelter or
which could be characterized as such by the Internal Revenue
Service or any other taxing authority. The accruals and reserves on
the books and records of the Company and its subsidiaries in
respect of tax liabilities for any taxable period not yet finally
determined are adequate to meet any assessments and related
liabilities for any such period, and since December 31, 2008,
the Company and its subsidiaries each has not incurred any
liability for taxes other than in the ordinary course.
(dd)
The Company and each of its subsidiaries carries, or is covered by,
insurance in such amounts and covering such risks as is adequate
for the conduct of their respective businesses and the value of
their respective properties and as is customary for companies
engaged in similar businesses in similar industries. The Company
has no reason to believe that it or any subsidiary will not be able
(i) to renew its existing insurance coverage as and when such
policies expire or (ii) to obtain comparable coverage from
similar institutions as may be necessary or appropriate to conduct
its business as now conducted and at a cost that would not result
in a Material Adverse Effect. Neither the Company nor any of its
subsidiaries has been denied any insurance coverage that they have
sought or for which they have applied.
(ee)
The Company and its subsidiaries each maintains a system of
internal accounting and other controls sufficient to provide
reasonable assurances 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 GAAP
and to maintain accountability for 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 existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences. Except as described in the General Disclosure
Package, since the end of the Company’s most recent audited
fiscal year, there has been (A) no material weakness in the
Company’s internal control over financial reporting (whether
or not remediated) and (B) no change in the Company’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.
14
(ff)
The minute books of the Company and each of its subsidiaries that
would be a “significant subsidiary” within the meaning
of Rule 1-02(w) of Regulation S-X under the Exchange Act
(such a significant subsidiary of the Company, a “Significant
Subsidiary”) have been made available to the Placement Agent
and counsel for the Placement Agent, and such books
(i) contain a complete summary of all meetings and actions of
the board of directors (including each board committee) and
shareholders of the Company (or analogous governing bodies and
interest holders, as applicable), and each of its Significant
Subsidiaries since the time of its respective incorporation or
organization through the date of the latest meeting and action, and
(ii) accurately in all material respects reflect all
transactions referred to in such minutes.
(gg)
There is no franchise, lease, contract, agreement or document
required by the Securities Act or by the Rules and Regulations to
be described in the General Disclosure Package and in the
Prospectus or a document incorporated by reference therein or to be
filed as an exhibit to the Registration Statement or a document
incorporated by reference therein which is not described or filed
therein as required; and all descriptions of any such franchises,
leases, contracts, agreements or documents contained in the
Registration Statement or in a document incorporated by reference
therein are accurate and complete descriptions of such documents in
all material respects. Other than as described in the General
Disclosure Package, no such franchise, lease, contract or agreement
has been suspended or terminated for convenience or default by the
Company or any of its subsidiaries or any of the other parties
thereto, and neither the Company nor any of its subsidiaries has
received notice nor does the Company have any other knowledge of
any such pending or threatened suspension or termination, except
for such pending or threatened suspensions or terminations that
would not reasonably be expected to, singularly or in the
aggregate, have a Material Adverse Effect.
(hh)
No relationship, direct or indirect, exists between or among the
Company and any of its subsidiaries on the one hand, and the
directors, officers, stockholders (or analogous interest holders),
customers or suppliers of the Com
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