Exhibit 1.1
Execution Copy
CORTEX PHARMACEUTICALS,
INC.
5,021,427 Shares
Warrants to Purchase 3,263,927
Shares
Common Stock
($0.001 Par Value)
PLACEMENT AGENCY
AGREEMENT
January 16, 2007
ROTH CAPITAL PARTNERS,
LLC
24 Corporate Plaza
Newport Beach, California 92660
Ladies and Gentlemen:
The undersigned, Cortex
Pharmaceuticals, Inc., a Delaware corporation (the “
Company ”), desires to engage Roth Capital Partners,
LLC as placement agent (the “ Placement Agent
”), as set forth herein, in connection with the issuance and
sale of the Securities (as defined below).
1. Description of Securities
.
The Company proposes, subject to the
terms and conditions stated herein, to issue and sell up to an
aggregate of (i) 5,021,427 shares (the “ Shares
”) of the Company’s common stock, $0.001 par value per
share (the “ Common Stock ”), and
(ii) 3,263,927 warrants to purchase Common Stock (the “
Warrants ”, and together with the Shares, the “
Securities ”), to certain investors (each an “
Investor ” and, collectively, the “
Investors ”), in a public offering under its
Registration Statement on Form S-3 (Registration
No. 333-138844). The shares of Common Stock issuable upon
exercise of the Warrants are hereinafter referred to as the Warrant
Shares. The Securities are more fully described in the Prospectus
hereinafter defined.
2. Agreement to Act as Placement
Agent; Delivery and Payment .
On the basis of the representations,
warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Placement Agent agrees
to act as the Company’s exclusive placement agent to assist
the Company, on a best efforts basis, in connection with the
proposed issuance and sale by the Company of the Securities to the
Investors. The Company expressly acknowledges and agrees that this
Agreement does not in any way constitute a commitment by the
Placement Agent to purchase any of the Securities and does not
ensure successful placement of the Securities or any portion
thereof. The Company shall pay to the Placement Agent concurrently
with the Closing (as defined below) 7.0% of the gross purchase
price of the Securities, excluding any consideration that may be
paid in the future upon exercise of the Warrants (the “
Placement Fee ”).
Upon satisfaction of the conditions
set forth in Section 5 hereof, the closing of the sale and
issuance of the Securities (the “ Closing ”)
shall occur at the offices of Stradling Yocca Carlson &
Rauth, 660 Newport Center Drive, Suite 1600, Newport Beach,
California, or at such other place as may be agreed upon between
the Placement Agent and the Company, at 10:00 a.m., Eastern
Standard Time, on January 19, 2007, unless a written consent
or acknowledgement to hold the Closing on January 22, 2007 is
obtained from each of the Investors and delivered to the Company
prior thereto in which case the Closing shall occur on
January 22, 2007, or at such other time and date as the
Placement Agent and the Company may agree, such time and date of
payment and delivery being herein called the “ Closing
Date .”
On the Closing Date, upon
satisfaction or waiver of all the conditions to Closing, the
Placement Agent will disburse, or cause to be disbursed, to the
Company an amount equal to the product of (x) the number of
Securities the Investors have agreed to purchase and (y) the
purchase price per Security as set forth on the cover page of the
Prospectus, less the Placement Fee and any reimbursable
expenses pursuant to Section 10 of this Agreement, and the
Company shall cause the Securities to be delivered to either the
Placement Agent, for further delivery to the Investors, or directly
to Investor in the event such Investor disburses funds directly to
the Company, which, with respect to the Shares, shall be made
through the facilities of The Depository Trust Company’s DWAC
system.
The Company acknowledges and agrees
that the Placement Agent shall act as an independent contractor,
and not as a fiduciary, and any duties of the Placement Agent with
respect to investment banking services to the Company, including
the offering of the Securities contemplated hereby (including in
connection with determining the terms of the offering), shall be
contractual in nature, as expressly set forth herein, and shall be
owed solely to the Company. Each party disclaims any intention to
impose any fiduciary or similar duty on the other. Additionally,
the Placement Agent has not advised, nor is advising, the Company
or any other person as to any legal, tax, investment, accounting or
regulatory matters in any jurisdiction with respect to the
transactions contemplated hereby. The Company shall consult with
its own advisors concerning such matters and shall be responsible
for making its own independent investigation and appraisal of the
transactions contemplated hereby, and the Placement Agent shall
have no responsibility or liability to the Company with respect
thereto. Any review by the Placement Agent of the Company, the
transactions contemplated hereby or other matters relating to such
transactions has been and will be performed solely for the benefit
of the Placement Agent and has not been and shall not be on behalf
of the Company or any other person. It is understood that the
Placement Agent has not and will not be rendering an opinion to the
Company as to the fairness of the terms of the offering.
Notwithstanding anything in this Agreement to the contrary, the
Company acknowledges that the Placement Agent may have financial
interests in the success of the offering contemplated hereby that
are not limited to the Placement Fee. The Company hereby waives and
releases, to the fullest extent permitted by law, any claims that
the Company may have against the Placement Agent with respect to
any breach or alleged breach of fiduciary duty.
It is understood that the Company
proposes to offer the Securities to the Investors upon the terms
and conditions set forth in the Registration Statement (hereinafter
defined).
3. Representations, Warranties
and Agreements of the Company .
(a) The Company represents and
warrants to and agrees with the Placement Agent as of the date
hereof and as of the Closing Date and any other date specified
below, that:
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(i) At the time of filing the
Registration Statement on Form S-3 (File No. 333-138844),
the Company met the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the “ 1933 Act
”) for a primary offering. A Registration Statement on
Form S-3 (Registration No. 333-138844) with respect to
the Securities, including a base prospectus (the “ Base
Prospectus ”), and such amendments to such registration
statement as may have been required to the date of this Agreement,
has been carefully prepared by the Company pursuant to and in
conformity with the requirements of the 1933 Act, and the rules and
regulations thereunder (the “ 1933 Act Rules and
Regulations ”) of the Securities and Exchange Commission
(the “ SEC ”) and has been filed with the SEC
under the 1933 Act. Such registration statement has been declared
effective by the SEC. Copies of such registration statement,
including any amendments thereto, each related preliminary
prospectus (meeting the requirements of Rule 430, 430A or 430B
of the 1933 Act Rules and Regulations) contained therein, and the
exhibits, financial statements and schedules thereto have
heretofore been delivered by the Company to the Placement Agent. A
final prospectus supplement containing information permitted to be
omitted at the time of effectiveness by Rule 430A or 430B of
the 1933 Act Rules and Regulations will be filed promptly by the
Company with the SEC in accordance with Rule 424(b) of the
1933 Act Rules and Regulations. The term “ Registration
Statement ” as used herein means the registration
statement as amended at the time it became effective by the SEC
under the 1933 Act (the “ Effective Date ”),
including financial statements, all exhibits and all documents
incorporated by reference therein and, if applicable, the
information deemed to be included by Rule 430A or 430B of the
1933 Act Rules and Regulations. If an abbreviated registration
statement is prepared and filed with the SEC in accordance with
Rule 462(b) under the 1933 Act (an “ Abbreviated
Registration Statement ”), the term “
Registration Statement ” as used in this Agreement
includes the Abbreviated Registration Statement. The term “
Prospectus ” as used herein means, together with the
Base Prospectus, (i) the final prospectus supplement as first
filed with the SEC pursuant to Rule 424(b) of the 1933 Act
Rules and Regulations, or (ii) if no such filing is required,
the form of final prospectus included in the Registration Statement
at the Effective Date, including, in each case, the documents
incorporated by reference therein. The term “ Preliminary
Prospectus ” as used herein shall mean a preliminary
prospectus as contemplated by Rule 430, 430A or 430B of the
1933 Act Rules and Regulations included at any time in the
Registration Statement, including the Base Prospectus and any
preliminary prospectus supplement, and including in each case the
documents incorporated by reference therein. The term “
Free Writing Prospectus ” as used herein shall have
the meaning set forth in Rule 405 of the 1933 Act Rules and
Regulations. The term “ Issuer Free Writing Prospectus
” as used herein shall have the meaning set forth in
Rule 433 of the 1933 Act Rules and Regulations. The term
“ Disclosure Package ” as used herein shall mean
the Preliminary Prospectus as most recently amended or supplemented
prior to the Initial Time of Sale (as defined below) together with
the Issuer Free Writing Prospectuses identified in
Schedule I hereto, if any, and any other Free Writing
Prospectus that the parties hereto shall hereafter expressly agree
to treat as part of the Disclosure Package. The Preliminary
Prospectus, if any, any Issuer Free Writing Prospectus required to
be filed pursuant to Rule 433(d) of the 1933 Act Rules and
Regulations and the Prospectus delivered to the Placement Agent for
use in connection with the offering of the Securities have been and
will be identical to the respective versions thereof transmitted to
the SEC for filing via the Electronic Data Gathering Analysis and
Retrieval System (“ EDGAR ”), except to the
extent permitted by Regulation S-T. For purposes of this
Agreement, the words “amend,” “amendment,”
“amended,” “supplement” or
“supplemented” with respect to the Registration
Statement, the Prospectus, any Free Writing Prospectus or the
Disclosure Package shall mean amendments or supplements to the
Registration Statement, the Prospectus, any Free Writing Prospectus
or the Disclosure Package, as the case may be, as well as documents
filed after the date of this Agreement and prior to the completion
of the distribution of the Securities and incorporated by reference
therein as described above.
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(ii) Neither the SEC nor any state
or other jurisdiction or other regulatory body has issued, and
neither is, to the knowledge of the Company, threatening to issue,
any stop order under the 1933 Act or other order suspending the
effectiveness of the Registration Statement (as amended or
supplemented) or preventing or suspending the use of any
Preliminary Prospectus, Issuer Free Writing Prospectus, the
Disclosure Package or the Prospectus or suspending the
qualification or registration of the Securities and the Warrant
Shares for offering or sale in any jurisdiction nor instituted or,
to the knowledge of the Company, threatened to institute
proceedings for any such purpose. The Preliminary Prospectus at its
date of issue and as of 10:00 a.m. Eastern Standard Time on the
date hereof (the “ Initial Time of Sale ”), the
Registration Statement at each effective date and the Initial Time
of Sale, and the Prospectus and any amendments or supplements
thereto or to the Registration Statement when they are filed with
the SEC or become effective, as the case may be, contain or will
contain, as the case may be, all statements that are required to be
stated therein by, and in all material respects conform or will
conform, as the case may be, to the requirements of, the 1933 Act
and the 1933 Act Rules and Regulations. Neither the Registration
Statement nor any amendment thereto, as of the applicable effective
date, contains or will contain, as the case may be, any untrue
statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make
the statements therein, not misleading. Neither the Preliminary
Prospectus, the Prospectus nor any supplement thereto contains, as
of the date thereof, or will contain, as the case may be, any
untrue statement of a material fact or omits or will omit to state
any 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. Neither the Disclosure
Package nor any supplement thereto, at the Initial Time of Sale,
contains or will contain, as the case may be, any untrue statement
of a material fact or omits or will omit to state any 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. Notwithstanding the foregoing, the Company
makes no representation or warranty as to information contained in
or omitted from the Registration Statement, the Disclosure Package
or the Prospectus, or any such amendment or supplement, in reliance
upon, and in conformity with, written information furnished to the
Company relating to the Placement Agent by or on behalf of the
Placement Agent expressly for use in the preparation thereof (as
provided in Section 12 hereof). There is no contract,
agreement, understanding or arrangement, whether written or oral,
or document required to be described in the Registration Statement,
Disclosure Package or Prospectus or to be filed as an exhibit to
the Registration Statement that is not described or filed as
required. The documents incorporated by reference in the Disclosure
Package or the Prospectus at the time they were filed with the SEC,
complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the “ 1934
Act ”), and the rules and regulations adopted by the SEC
thereunder (the “ 1934 Act Rules and Regulations
”). Any future documents incorporated by reference so filed,
when they are filed, will comply in all material respects with the
requirements of the 1934 Act and the 1934 Act Rules and
Regulations; no such incorporated document contained or will
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; and, when read together and
with the other information in each of the Disclosure Package and
the Prospectus, at the time the Registration Statement became
effective, at the Initial Time of Sale and at the Closing Date,
each such incorporated document did not or will not, as the case
may be, 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.
(iii) The Company is eligible to use
Issuer Free Writing Prospectuses in connection with the offering of
the Securities pursuant to Rules 164 and 433 of the
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1933 Act. Any Issuer Free Writing Prospectus
that the Company is required to file pursuant to Rule 433(d)
of the 1933 Act Rules and Regulations has been, or will be, timely
filed with the SEC in accordance with the requirements of the 1933
Act Rules and Regulations. Each Issuer Free Writing Prospectus that
the Company has filed, or is required to file, pursuant to
Rule 433(d) of the 1933 Act or that was prepared by or on
behalf of or used by the Company complies or will comply in all
material respects with the requirements of the 1933 Act Rules and
Regulations, including but not limited to legending and
recordkeeping requirements. Except for the Issuer Free Writing
Prospectuses, if any, identified in Schedule I hereto,
the Company has not prepared, used or referred to, and will not,
without your prior consent, prepare, use or refer to any Free
Writing Prospectus. Each Issuer Free Writing Prospectus, as of its
issue date and at all times through the completion of the offering
and sale of the Securities, did not, does not and will not include
any information that conflicted, conflicts or will conflict with
the information contained in the Registration Statement. The
foregoing sentence does not apply to statements in or omissions
from any Issuer Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by or
on behalf of the Placement Agents expressly for use in the
preparation thereof. The Company filed the Registration Statement
with the SEC before using any Free Writing Prospectus. The Company
has satisfied and will satisfy the conditions of Rule 433 of
the 1933 Act Rules and Regulations such that any electronic road
show need not be filed with the SEC.
(iv) This Agreement has been duly
authorized, executed and delivered by the Company and constitutes a
valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally and by
general principles of equity (the “ Exceptions
”).
(v) The Company and its Subsidiaries
(as defined below) have been duly organized and are validly
existing as corporations in good standing under the laws of the
states or other jurisdictions in which they are incorporated, with
full power and authority (corporate and other) to own, lease and
operate their properties and conduct their businesses as described
in each of the Disclosure Package and the Prospectus and, with
respect to the Company, to execute and deliver, and perform the
Company’s obligations under, this Agreement; the Company and
its Subsidiaries are duly qualified to do business as foreign
corporations in good standing in each state or other jurisdiction
in which their ownership or leasing of property or conduct of
business legally requires such qualification, except where the
failure to be so qualified, individually or in the aggregate, would
not have a Material Adverse Effect. The term “ Material
Adverse Effect ” as used herein means any material
adverse effect on the condition (financial or other), net worth,
business, affairs, management, prospects, results of operations or
cash flow of the Company and its Subsidiaries, taken as a whole.
The Company has no significant subsidiaries (as such term is
defined in Rule 1-02(w) of Regulation S-X promulgated by
the Commission) other than those subsidiaries listed on
Schedule II hereto (the “ Subsidiaries
”).
(vi) 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
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 in
each of the Disclosure Package and the Prospectus and, since the
respective dates as of which information is given in the Disclosure
Package, there has not been any change in the capital stock or
long-term debt of the Company or any
5
of its Subsidiaries or any Material Adverse
Change, or any development involving a prospective Material Adverse
Change, otherwise than as set forth in each of the Disclosure
Package and the Prospectus. The term “ Material Adverse
Change ” as used herein means any change of the Company
that has a Material Adverse Effect.
(vii) The issuance and sale of the
Securities and the execution, delivery and performance by the
Company of this Agreement, and the consummation of the transactions
herein contemplated, including the issuance of the Warrant Shares
upon due exercise of the Warrants in accordance with their terms,
will not conflict with or result in a breach or violation of any of
the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or any of
its Subsidiaries under, any 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
properties or assets of the Company or any of its Subsidiaries is
subject, except to such extent as, individually or in the
aggregate, does not have a Material Adverse Effect, nor will such
action result in any violation of the provisions of the
Company’s certificate of incorporation or bylaws or any
material statute, rule, regulation or other law, or any order or
judgment, of any court or governmental agency or body having
jurisdiction over the Company or any of its Subsidiaries or any of
their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement, the issuance and sale of the
Securities or the consummation of the transactions contemplated
hereby, including the issuance of the Warrant Shares upon exercise
of the Warrants, except such as have been, or will be prior to the
Closing Date, obtained under the 1933 Act or as may be required by
the National Association of Securities Dealers, Inc. (the “
NASD ”) and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or blue sky laws in connection with the purchase and
distribution of the Securities to the Investors.
(viii) The Company has duly and
validly authorized capital stock as set forth in each of the
Disclosure Package and Prospectus; all outstanding shares of Common
Stock of the Company and the Shares conform, or when issued will
conform, to the description thereof in the Prospectus and have
been, or, when issued and paid for in the manner described herein
will be, duly authorized, validly issued, fully paid and
non-assessable; and the issuance of the Securities to be purchased
from the Company hereunder is not subject to preemptive or other
similar rights, or any restriction upon the voting or transfer
thereof pursuant to applicable law or the Company’s
certificate of incorporation, bylaws or governing documents or any
agreement to which the Company or any of its Subsidiaries is a
party or by which any of them may be bound. All corporate action
required to be taken by the Company for the authorization, issuance
and sale of the Securities has been duly and validly taken. The
Warrants conform, or when issued will conform, to the description
thereof in the Prospectus and have been duly and validly authorized
by the Company and upon delivery to the Investors at the Closing
Date will be valid and binding obligations of the Company,
enforceable in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights and
remedies of creditors generally or subject to general principles of
equity. The Warrant Shares initially issuable upon exercise of the
Warrants conform, or when issued will conform, to the description
thereof in the Prospectus and have been duly authorized and
reserved for issuance and when issued in accordance with the terms
thereof will be validly issued, fully paid and nonassessable.
Except as disclosed in each of the Disclosure Package and
Prospectus, there are no outstanding subscriptions, rights,
warrants, options, calls, convertible securities, commitments of
sale or rights related to or entitling any person to purchase
or
6
otherwise to acquire any shares of, or any
security convertible into or exchangeable or exercisable for, the
capital stock of, or other ownership interest in, the Company,
except for such options or rights as may have been granted by the
Company to employees, directors or consultants pursuant to its
stock option or stock purchase plans. The outstanding shares of
capital stock of the Company’s Subsidiaries have been duly
authorized and validly issued, are fully paid and non-assessable
and are owned by the Company free and clear of any mortgage,
pledge, lien, encumbrance, charge or adverse claim and are not the
subject of any agreement or understanding with any person and were
not issued in violation of any preemptive or similar rights; and
there are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or instruments
related to or entitling any person to purchase or otherwise acquire
any shares of, or any security convertible into or exchangeable or
exercisable for, the capital stock of, or other ownership interest
in any of the Subsidiaries.
(ix) The statements set forth in
each of the Disclosure Package and the Prospectus describing the
Securities and this Agreement, insofar as they purport to describe
the provisions of the laws and documents referred to therein, are
accurate, complete and fair in all material respects.
(x) Each of the Company and its
Subsidiaries is in possession of and is operating in compliance
with all franchises, grants, authorizations, licenses,
certificates, permits, easements, consents, orders and approvals
(“ Permits ”) from all state, federal, foreign
and other regulatory authorities, and has satisfied the
requirements imposed by regulatory bodies, administrative agencies
or other governmental bodies, agencies or officials, that are
required for the Company and its Subsidiaries lawfully to own,
lease and operate their properties and conduct their businesses as
described in each of the Disclosure Package and the Prospectus, and
each of the Company and its Subsidiaries is conducting its business
in compliance with all of the laws, rules and regulations of each
jurisdiction in which it conducts its business, in each case with
such exceptions, individually or in the aggregate, as would not
have a Material Adverse Effect; each of the Company and its
Subsidiaries has filed all notices, reports, documents or other
information (“ Notices ”) required to be filed
under applicable laws, rules and regulations, in each case, with
such exceptions, individually or in the aggregate, as would not
have a Material Adverse Effect; and, except as otherwise
specifically described in each of the Disclosure Package and the
Prospectus, neither the Company nor any of its Subsidiaries has
received any notification from any court or governmental body,
authority or agency, relating to the revocation or modification of
any such Permit or to the effect that any additional authorization,
approval, order, consent, license, certificate, permit,
registration or qualification (“ Approvals ”)
from such regulatory authority is needed to be obtained by any of
them, in any case where it could be reasonably expected that
obtaining such Approvals or the failure to obtain such Approvals,
individually or in the aggregate, would have a Material Adverse
Effect.
(xi) The Company and its
Subsidiaries have filed all necessary federal, state and foreign
income and franchise tax returns and paid all taxes shown as due
thereon; all such tax returns are complete and correct in all
material respects; all tax liabilities are adequately provided for
on the books of the Company and its Subsidiaries except to such
extent as would not have a Material Adverse Effect; the Company and
its Subsidiaries have made all necessary payroll tax payments; and
the Company and its Subsidiaries have no knowledge of any tax
proceeding or action pending or threatened against the Company or
its Subsidiaries that, individually or in the aggregate, would have
a Material Adverse Effect.
7
(xii) Except as described in each of
the Disclosure Package and the Prospectus, the Company and its
Subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent licenses, trademarks, service marks and
trade names necessary to conduct the business now operated by them,
and neither the Company nor any of its Subsidiaries has received
any notice of infringement of or conflict with asserted rights of
others with respect to any patents, patent licenses, trademarks,
service marks or trade names that, individually or in the
aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a Material Adverse Effect.
(xiii) The Company and its
Subsidiaries have good and marketable title in fee simple to all
items of real property and good and marketable title to all
personal property owned by them, in each case free and clear of all
liens, encumbrances, restrictions and defects except such as are
described in each of the Disclosure Package and the Prospectus or
do not materially affect the value of such property and do not
interfere with the use made and proposed to be made of such
property; and any property held under lease or sublease by the
Company or any of its Subsidiaries is held under valid, subsisting
and enforceable leases or subleases with such exceptions as are not
material and do not interfere with the use made and proposed to be
made of such property by the Company and its Subsidiaries; and
neither the Company nor any of its Subsidiaries has any notice or
knowledge of any material claim of any sort that has been, or may
be, asserted by anyone adverse to the Company’s or any of its
Subsidiaries rights as lessee or sublessee under any lease or
sublease described above, or affecting or questioning the
Company’s or any of its Subsidiaries’ rights to the
continued possession of the leased or subleased premises under any
such lease or sublease in conflict with the terms
thereof.
(xiv) Except as described in each of
the Disclosure Package and the Prospectus, there is no pending
action, suit or other proceeding involving the Company or any of
its Subsidiaries or any of their material assets for any failure of
the Company or any of its Subsidiaries, or any predecessor thereof,
to comply with any requirements of federal, state or local
regulation relating to air, water, solid waste management,
hazardous or toxic substances, or the protection of health, safety
or the environment. Except as described in each of the Disclosure
Package and the Prospectus, none of the property owned or leased by
the Company or any of its Subsidiaries is, to the best knowledge of
the Company, contaminated with any waste or hazardous or toxic
substances, and neither the Company nor any of its Subsidiaries may
be deemed an “owner or operator” of a
“facility” or “vessel” that owns,
possesses, transports, generates or disposes of a “hazardous
substance” as those terms are defined in §9601 of the
Comprehensive Environmental Response, Compensation and Liability
Act of 1980, 42 U.S.C. §9601 et seq .
(xv) No labor disturbance exists
with the employees of the Company or any of its Subsidiaries or is
imminent that, individually or in the aggregate, would have a
Material Adverse Effect. None of the employees of the Company or
any of its Subsidiaries is represented by a union and, to the best
knowledge of the Company and its Subsidiaries, no union organizing
activities are taking place. Neither the Company nor any of its
Subsidiaries has violated any federal, state or local law or
foreign law relating to discrimination in hiring, promotion or pay
of employees, nor any applicable wage or hour laws, or the rules
and regulations thereunder, or analogous foreign laws and
regulations, that would, individually or in the aggregate, result
in a Material Adverse Effect.
(xvi) The Company and its
Subsidiaries are in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder (“ ERISA
”); no “reportable event” (as defined in ERISA)
has occurred with respect to any “pension plan” (as
defined
8
in ERISA) for which the Company and its
Subsidiaries would have any liability; the Company and its
Subsidiaries have not incurred and do not expect to incur liability
under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Internal Revenue Code of
1986, as amended, including the regulations and published
interpretations thereunder (the “ Code ”); and
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 in
all material respects, and nothing has occurred, whether by action
or by failure to act, that would cause the loss of such
qualification.
(xvii) The Company and its
Subsidiaries maintain insurance of the types and in the amounts
generally deemed adequate for its business, including, but not
limited to, directors’ and officers’ insurance,
insurance covering real and personal property owned or leased by
the Company and its Subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and
effect. Neither the Company nor any of its Subsidiaries has been
refused any insurance coverage sought or applied for, and the
Company has no reason to believe that it and its Subsidiaries will
not be able to renew their existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost
that would not have a Material Adverse Effect.
(xviii) Neither the Company nor any
of its Subsidiaries is, or with the giving of notice or lapse of
time or both would be, in default or violation with respect to its
certificate of incorporation or bylaws. Neither the Company nor any
of its Subsidiaries is, or with the giving of notice or lapse of
time or both would be, in default in the performance or observance
of any material obligation, agreement, covenant or condition
contained in any material indenture, mortgage, deed of trust, loan
agreement, lease 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
properties or assets of the Company or any of its Subsidiaries is
subject, or in violation of any statutes, laws, ordinances or
governmental rules or regulations or any orders or decrees to which
it is subject, including, without limitation, Section 13 of
the 1934 Act, which default or violation, individually or in the
aggregate, would have a Material Adverse Effect. Neither the
Company nor any of its Subsidiaries has, at any time during the
past five years, (A) made any unlawful contributions to any
candidate for any political office, or failed fully to disclose any
contribution in violation of law, or (B) made any payment to
any state, federal or foreign government official, or other person
charged with similar public or quasi-public duty (other than
payment required or permitted by applicable law).
(xix) Other than as set forth in
each of the Disclosure Package and the Prospectus, there are no
legal or governmental proceedings pending to which the Company or
any of its Subsidiaries is a party or of which any property of the
Company or any of its Subsidiaries is the subject that, if
determined adversely to the Company or any of its Subsidiaries,
would individually or in the aggregate have a Material Adverse
Effect or that would materially and adversely affect the
consummation of the transactions contemplated hereby or that is
required to be disclosed in each of the Disclosure Package or the
Prospectus; to the best of the Company’s knowledge, no such
proceedings are threatened or contemplated.
(xx) The Company is not and, after
giving effect to the offering and sale of the Securities, will not
be a “holding company,” or a “subsidiary
company” of a “holding company,”
9
or an “affiliate” of a
“holding company” or of a “subsidiary
company,” as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended (the “ 1935
Act ”).
(xxi) The Company is not and, after
giving effect to the offering and sale of the Securities, will not
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 “ 1940 Act ”).
(xxii) At the earliest time after
the filing of the Registration Statement at which the Company or
another offering participant made a bona fide offer (within
the meaning of Rule 164(a)(2) of the 1933 Act Rules and
Regulations) and as of the date hereof, the Company was not and is
not an “ineligible issuer” as such term is defined in
Rule 405 of the 1933 Act Rules and Regulations, without taking
account of any determination by the SEC that it is not necessary
that the Company be considered an “ineligible
issuer.”
(xxiii) Haskell & White
LLP, the accounting firm that has certified the financial
statements filed with or incorporated by reference in and as a part
of the Registration Statement, is an independent registered public
accounting firm within the meaning of the 1933 Act and the 1933 Act
Rules and Regulations and the rules and regulations of the Public
Company Accounting Oversight Board (“ PCAOB ”)
of the United States. The Company and each of its Subsidiaries
maintains a system of internal accounting controls sufficient to
provide reasonable assurance that: (1) transactions are
executed in accordance with management’s general or specific
authorization; (2) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles in the United States
(“ GAAP ”) and to maintain accountability for
assets; (3) access to assets is permitted only in accordance
with management’s general or specific authorization; and
(4) the recorded accounts for assets is compared with the
existing assets at reasonable intervals and appropriate action is
taken with respect thereto. The consolidated financial statements
and schedules of the Company, including the notes thereto, filed
with (or incorporated by reference) and as a part of the
Registration Statement, Disclosure Package or Prospectus, are
accurate in all material respects and present fairly the financial
condition of the Company and its Subsidiaries as of the respective
dates thereof and the consolidated results of operations and
changes in financial position and consolidated statements of cash
flow for the respective periods covered thereby, all in conformity
with GAAP applied on a consistent basis throughout the periods
involved except as otherwise disclosed therein. All adjustments
necessary for a fair presentation of results for such periods have
been made. The selected financial data included or incorporated by
reference in the Registration Statement, Disclosure Package and
Prospectus present fairly, when read in conjunction with the
Company’s financial statements and the related notes and
schedules and on the basis stated therein, the information shown
therein and have been compiled on a basis consistent with that of
the audited financial statements. Any operating or other
statistical data included or incorporated by reference in the
Registration Statement, Disclosure Package and Prospectus comply in
all material respects with the 1933 Act and the 1933 Act Rules and
Regulations and present fairly the information shown therein and
are based on or derived from sources that the Company reasonably
and in good faith believes are reliable and accurate, and such data
agree with the sources from which they are derived. All non-GAAP
financial information included (or incorporated by reference) in
the Registration Statement, Disclosure Package or Prospectus
complies with the requirements of Regulation G and Item 10 of
Regulation S-K under the 1933 Act.
10
(xxiv) Except as disclosed in each
of the Disclosure Package and the Prospectus, no holder of any
security of the Company has any right to require registration of
shares of Common Stock or any other security of the Company because
of the filing of the Registration Statement or the consummation of
the transactions contemplated hereby. No person has the right,
contractual or otherwise, to cause the Company to permit such
person to underwrite the sale of any of the Securities. Except for
this Agreement, there are no contracts, agreements or
understandings between the Company or any of its Subsidiaries and
any person that would give rise to a valid claim against the
Company, its Subsidiaries or any Placement Agent for a brokerage
commission, finder’s fee or like payment in connection with
the issuance, purchase and sale of the Securities.
(xxv) The Company has not
distributed and, prior to the later to occur of (A) the
Closing Date and (B) completion of the distribution of the
Securities, will not distribute any offering material in connection
with the offering and sale of the Securities other than the
Registration Statement, the Preliminary Prospectus, any Issuer Free
Writing Prospectus identified in Schedule I hereto or
reviewed and approved by the Placement Agent, the Disclosure
Package and the Prospectus.
(xxvi) The Company has not taken and
will not take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in
stabilization or manipulation of the price of the Company’s
Common Stock, and the Company is not aware of any such action taken
or to be taken by affiliates of the Company.
(xxvii) The Company is in material
compliance with all applicable provisions of the Sarbanes-Oxley Act
of 2002 (the “ Sarbanes-Oxley Act ”) that are
currently effective and the rules and regulations promulgated in
connection therewith.
(xxviii) The Company has established
and maintains disclosure controls and procedures and internal
control over financial reporting as are currently required (as such
terms are defined in Rule 13a-15 and 15d-15 under the 1934
Act); the Company’s disclosure controls and procedures
(i) are designed to ensure that information required to be
disclosed by the Company in the reports that it files or submits
under the 1934 Act is accumulated and communicated to management,
including the principal executive and principal financial officer
of the Company, or persons performing similar functions, as
appropriate to allow timely decisions regarding required
disclosure, and that such information is recorded, processed,
summarized and reported, within the time periods specified in the
1934 Act Rules and Regulations; (ii) have been evaluated for
effectiveness; and (iii) are effective in all material
respects to perform the functions for which they were
established.
(xxix) Except as discussed with the
Company’s auditors and audit committee and as disclosed in
each of the Disclosure Package and the Prospectus, (i) there
are no significant deficiencies or material weaknesses in the
design or operation of internal control over financial reporting
that are reasonably likely to adversely affect the Company’s
ability to record, process, summarize, and report financial data
and (ii) there is, and there has been, no fraud, whether or
not material, that involves management or other employees who have
a role in the Company’s internal control over financial
reporting.
(xxx) Since the date of the end of
the last fiscal year for which audited financial statements are
included or incorporated by reference in each of the Disclosure
Package and the Prospectus, there have been no significant changes
in internal control over financial reporting or
11
in other factors that could significantly affect
internal control over financial reporting, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
(xxxi) The Company has received no
written comments from the SEC staff regarding its periodic or
current reports under the 1934 Act that remain unresolved and have
not been disclosed in the Registration Statement, Disclosure
Package and Prospectus.
(xxxii) No relationship, direct or
indirect, exists between or among the Company and any director,
officer or stockholder of the Company, or any member of his or her
immediate family, or any customers or suppliers that is required to
be described in the Registration Statement, the Disclosure Package
or the Prospectus and that is not so described and described as
required in material compliance with such requirement. There are no
outstanding loans, advances (except normal advances for business
expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the
officers or directors of the Company or any member of their
respective immediate families, except as disclosed in the
Registration Statement, the Disclosure Package and the Prospectus.
The Company has not, in violation of the Sarbanes-Oxley Act,
directly or indirectly, extended or maintained credit, arranged for
the extension of credit, or renewed an extension of credit, in the
form of a personal loan to or for any director or executive officer
of the Company.
(xxxiii) To the best knowledge of
the Company, no change in any laws or regulations is pending that
could reasonably be expected to be adopted and if adopted, could
reasonably be expected to have, individually or in the aggregate
with all such changes, a Material Adverse Effect, except as set
forth in or contemplated in each of the Disclosure Package and the
Prospectus.
(xxxiv) Neither the Company nor any
of its Subsidiaries, nor, to the Company’s knowledge, any
director, officer, agent, employee or other person associated with
or acting on behalf of the Company or any of its Subsidiaries, has,
directly or indirectly, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee or to foreign or domestic political parties or campaigns
from corporate funds; violated or is in violation of any
provi
