Exhibit 10.1
EXECUTION
COPY
1,200,000
Shares
of IMMTECH PHARMACEUTICALS,
INC.
Common Stock ($0.01
par value)
PLACEMENT AGENCY
AGREEMENT
February 7,
2007
Ferris, Baker Watts, Incorporated
Attn: Scott T. Bass, Vice President, Corporate
Finance
100 Light St., 9th Floor
Baltimore, MD 21202
Ladies and Gentlemen:
IMMTECH PHARMACEUTICALS,
INC. , a Delaware
corporation (the “ Company ”) proposes,
subject to the terms and conditions contained herein and in the
Purchase Agreements in the form of Exhibit A attached hereto
(the “ Purchase Agreements ”) entered
into with the Investors identified therein (each an “
Investor ” and, collectively, the “
Investors ”), to issue and sell its common
stock, $0.01 par value per share, (the “Common Stock”)
up to an aggregate of 1,200,000 shares of Common Stock, (the
“ Shares ”). The Company hereby sets
forth its agreement (this “ Agreement ”)
with Ferris, Baker Watts, Incorporated (“ FBW
”) acting as the placement agent (the “ Placement
Agent ”) for this proposed registered direct
offering. The Shares are more fully described in the Registration
Statement (as hereinafter defined).
1.
Agreement
to Act as Placement Agent; Delivery and Payment
. 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:
(a) The
Placement Agent agrees to act as the Company’s exclusive
placement agent to solicit offers for the purchase of all or part
of the Shares from the Company in connection with the proposed
issuance and sale, on a commercially reasonable efforts basis, by
the Company of the Shares to the Investors (the “
Offering ”). Upon the occurrence of the Closing
(as hereinafter defined), 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 amount equal to
six percent (6.0%) of the gross proceeds received by the Company
from the sale of the Shares on such Closing Date (as hereinafter
defined). The Company acknowledges and agrees that the Placement
Agent’s engagement hereunder is not an agreement by the
Placement Agent or any of its affiliates to underwrite or purchase
any securities or otherwise provide any financing. Under no
circumstances will the Placement Agent be obligated to purchase any
Shares for its own account and, in soliciting purchases of Shares,
the Placement Agent shall act solely as the Company’s agent
and not as principal. Notwithstanding the foregoing, 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 Shares as principal. The Placement Agent shall have no
authority to bind the Company.
(b) Payment
of the purchase price for, and delivery of, the Shares shall be
made at a closing (the “ Closing ”) at,
Paul, Hastings, Janofsky & Walker LLP, the offices of counsel
for the Company, located at Park Avenue Tower, 75 E. 55th Street,
First Floor, New York, NY 10022 at 9:00 a.m., EST, on the third or
fourth business day (as permitted under Rule 15c6-1 under the
Exchange Act) after the determination of the public offering price
of the Shares (such time and date of payment and delivery being
herein called the “ Closing Date ”). All
such actions taken at the Closing shall be deemed to have occurred
simultaneously.
(c) On
the Closing Date, the Placement Agent shall cause each Investor to
wire directly to the Company an amount equal to the aggregate
purchase price for the number of Shares such Investor has agreed to
purchase. Once the Company has received the aggregate purchase
price for all of the Shares, it shall deliver, or cause the
transfer agent for the Shares to deliver, to each Investor the
number of Shares set forth on the signature page to such
Investor’s Purchase Agreement, which delivery shall be made,
with respect to an Investor, in accordance with the procedures set
forth in such Investor’s executed Purchase
Agreement.
(d) The
purchases of the Shares by each of the Investors shall be evidenced
by the execution of a Purchase Agreement substantially in the form
attached hereto as Exhibit A.
(e) Prior
to the earlier of (i) the date on which this Agreement is
terminated and (ii) the Closing Date, the Company shall not,
without the prior written consent of the Placement Agent, solicit
or accept offers to purchase shares of its Common Stock or other
equity or equity-linked securities of the Company (other than
pursuant to the exercise of options or warrants to purchase shares
the Common Stock that are outstanding at the date hereof) otherwise
than through the Placement Agent.
2.
Representations
and Warranties of the Company . The Company represents and warrants to the
Placement Agent as of the date hereof and as of the Closing Date,
as follows:
(a)
Registration Statement . 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 (No. 333-130970), which was declared by the
Commission to be effective under the Securities Act as of February
7, 2006 (the “ Effective Date ”)
including a Base Prospectus, dated as of the Effective Date,
relating to previously sold securities and the Shares (the “
Base Prospectus ”), and such amendments and
supplements thereto as may have been required to the date of this
Agreement. The Company will next file with the Commission pursuant
to Rule 424(b) under the Securities Act a final prospectus
supplement to the Base Prospectus (a “
Prospectus Supplement ”) describing the Shares
and the offering thereof, in such form as has been provided to or
discussed with, and approved, by the Placement Agent.
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 under the Securities
Act), as of the Effective Date and as amended and/or supplemented
to the date of this Agreement. The Registration Statement has been
declared 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 (as
defined below) has been issued by the Commission and no proceedings
for that purpose have been instituted or, to the Company’s
knowledge, are contemplated by the Commission.
The term “
Prospectus ” as used in this Agreement means
the Base Prospectus together with the Prospectus Supplement, except
that if such Base Prospectus is amended or supplemented prior to
the date on which the Prospectus Supplement was first filed
pursuant to Rule 424, the term “ Prospectus
” shall refer to the Base Prospectus as so amended or
supplemented and as supplemented by the Prospectus
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Supplement. Any reference herein to
the Registration Statement, the Base Prospectus, any Prospectus
Supplement or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference into the Prospectus
Supplement (the “ Incorporated Documents
”), which were filed under the Securities Exchange Act of
1934, as amended (the “ Exchange Act ”)
and any reference herein to the terms “amend,”
“amendment,” or “supplement” with respect
to the Registration Statement, the Prospectus Supplement or the
Prospectus shall be deemed to refer to and include the filing of
any Incorporated Document under the Exchange Act after the
Effective Date. If the Company has filed an abbreviated
registration statement to register additional Common Stock pursuant
to Rule 462(b) under the Rules (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)
Registration Statement and Prospectus . On the Effective
Date, upon the filing or first delivery to the Investors of the
Prospectus, as of the date hereof, and at the Closing Date, the
Registration Statement (and any post-effective amendment thereto)
and the Prospectus (as amended or as supplemented if the Company
shall have filed with the Commission any amendment or supplement to
the Registration Statement or the Prospectus) complied and will
comply, in all material respects, with the requirements of the
Securities Act and the Rules and Regulations and the Exchange Act
and the rules and regulations of the Commission thereunder and did
not at the Effective Date, does not as of the date hereof and will
not as of the Closing Date, contain any untrue statement of a
material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein
(in light of the circumstances under which they were made, in the
case of the Prospectus) not misleading. Notwithstanding the
foregoing, none of the representations and warranties in this
paragraph 2(b) shall apply to statements in, or omissions from, the
Registration Statement or the Prospectus, or any amendment or
supplement thereto made in reliance upon, and in conformity with
the information herein and the Placement Agent’s Information
(as defined in Section 16). The Incorporated Documents, at the time
they became effective or were filed with the Commission, complied
in all material respects with the requirements of the Exchange Act
and did not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
Company has not distributed and will not distribute, prior to the
completion of the distribution of the Shares, any offering material
in connection with the offering and sale of the Shares, other than
the Registration Statement and the Prospectus.
(c)
Subsidiaries . The Company has no significant subsidiaries
(as such term is defined in Rule 1-02 of Regulation S-X promulgated
by the Commission) other than as listed in Schedule I
attached hereto (collectively, the “
Subsidiaries ”). All of the issued and
outstanding shares of capital stock of each of the Subsidiaries
have been duly and validly authorized and issued and are fully
paid, nonassessable and free of preemptive and similar rights to
subscribe for or purchase securities, and, except as listed on
Schedule I attached hereto or otherwise described in the
Registration Statement and Prospectus, the Company owns directly or
indirectly, free and clear of any security interests, claims,
liens, proxies, equities or other encumbrances, all of the issued
and outstanding shares of such stock.
(d)
Financial Statements . The consolidated financial statements
of the Company, together with the related schedules and notes
thereto, set forth or incorporated by reference in the Prospectus
Supplement comply in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, as
applicable, and fairly present, in all material respects, (i) the
consolidated financial condition of the Company and its
Subsidiaries as of the dates indicated and (ii) the consolidated
results of operations, stockholders’ equity and changes in
cash flows of the Company and the Subsidiaries for the periods
therein specified; and such financial statements and related
schedules and notes thereto, comply, in all material respects, as
to form with the applicable accounting requirements under the
Securities Act and have been prepared in conformity with United
States generally accepted accounting principles, consistently
applied throughout the periods involved (except as otherwise stated
therein and subject, in the case of unaudited financial statements,
to the absence of footnotes and normal year-end
7
adjustments). No other financial
statements or schedules are required by the Securities Act and the
Rules and Regulations to be included in the Registration Statement
or Prospectus.
(e)
Independent Accountants . Deloitte & Touche LLP
(the “ Auditors ”), whose
report with respect to the audited consolidated financial
statements and schedules of the Company and its Subsidiaries
included in the Prospectus, or the Registration Statement, or
incorporated by reference therein is, and during the periods
covered by its reports, was an independent public accounting firm
within the meaning of the Securities Act and the Rules and
Regulations.
(f)
Organization . Each of the Company and its Subsidiaries has
been duly incorporated or otherwise organized and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation or organization (as applicable). Each
of the Company and its Subsidiaries has full corporate power and
authority to own, lease and operate its properties and assets and
to conduct its business as described in the Registration Statement
and Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which
it owns or leases real property or in which the conduct of its
business makes such qualification necessary, except where the
failure to be so qualified or be in good standing, as the case may
be, would not, individually or in the aggregate, have or reasonably
be expected to result in, a material adverse effect upon the
business, prospects, properties, operations, condition (financial
or otherwise) or results of operations of the Company and its
Subsidiaries, taken as a whole (a “ Material Adverse
Effect ”).
(g)
No Material Adverse Effect . Except as set forth in the
Registration Statement or the Prospectus, subsequent to the
respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been (i)
any material adverse change in the business, properties,
management, financial condition or results of operations of the
Company and its subsidiaries taken as a whole, including any
material loss or interference with its respective 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, (ii) any transaction that is material to
the Company and its Subsidiaries taken as a whole, (iii) any
obligation, direct or contingent (including any off balance sheet
obligations), incurred by the Company or its Subsidiaries, which is
material to the Company and its Subsidiaries taken as a whole, (iv)
any change in the capital stock or outstanding indebtedness of the
Company or its Subsidiaries (subject to the issuance of shares of
Common Stock upon exercise of stock options or warrants disclosed
as outstanding in the Registration Statement and Prospectus and the
grant of options under existing stock option plans described in the
Registration Statement and Prospectus) or (v) any dividend or
distribution of any kind declared, paid or made on the capital
stock of the Company.
(h)
Legal Proceedings . Except as set forth in the Registration
Statement and the Prospectus, there is not pending or, to the
knowledge of the Company, threatened or contemplated, any action,
suit or proceeding 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 before or by any court or
governmental agency, authority or body, or any arbitrator, which,
individually or in the aggregate, would reasonably be expected to
result in any Material Adverse Effect or materially and adversely
affect the ability of the Company to perform its obligations under
this Agreement and the Purchase Agreements.
(i)
Sufficiency of Disclosure . There are no affiliate
transactions, off-balance sheet transactions, contracts, licenses,
agreements, leases or other documents of a character required to be
described in the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement that are not so
described or filed as required.
(j)
Due Authorization and Enforceability . The Company has full
legal power and authority to enter into this Agreement and the
Purchase Agreements and to consummate the transactions
8
contemplated hereby and thereby.
This Agreement and each of the Purchase Agreements have been duly
authorized, executed and delivered by the Company, and constitute
valid, legal and binding obligations of the Company, enforceable in
accordance with their terms, except as rights to indemnity
hereunder may be limited by applicable laws and 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.
(k)
The Shares . The Shares have been duly and validly
authorized by the Company and, when issued, delivered and paid for
in accordance with the terms of this Agreement, will have been duly
and validly issued and will be fully paid and nonassessable; and
the capital stock of the Company conforms to the description
thereof in the Registration Statement and Prospectus. Except as
otherwise stated in the Registration Statement and Prospectus,
there are no preemptive rights or other rights to subscribe for or
to purchase, or any restriction upon the voting or transfer of, any
shares of Common Stock pursuant to the Company’s charter,
bylaws or any agreement or other instrument to which the Company is
a party or by which the Company is bound that have not been waived
or complied with.
(l)
No Conflicts . The execution, delivery and performance by
the Company of this Agreement, the agreement to, among other
things, issue the Placement Agent warrants to purchase Common Stock
(the “ Placement Agent Warants ”)
pursuant to that certain letter agreement dated December 14, 2006
between the Company and the Placement Agent, and each of the
Purchase Agreements and the consummation of the transactions herein
and therein contemplated, including the issuance and sale of the
Shares, will not (i) conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default (or an event which with notice or lapse of time or both
would constitute a default) under, or require any consent or waiver
under, or result in the execution of any lien, charge or
encumbrance upon any properties or assets of the Company or its
Subsidiaries pursuant to the terms of, 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 property or assets of the Company or any of its Subsidiaries is
subject, (ii) result in any violation of the provisions of the
charter or by-laws of the Company or any of its Subsidiaries or
(iii) result in any violation of any franchise, license, permit,
statute, law, rule or regulation applicable to the Company or any
judgment, order or decree of any court or governmental agency or
body having jurisdiction over the Company or any of its
Subsidiaries or any of their properties or assets, except, in the
case of each of clauses (i) and (iii) above, for any such conflict,
breach, violation, default, lien, charge or encumbrance that would
not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.
(m)
No Consents Required . No consent, approval, authorization,
filing with or order of or registration with, any court or
governmental agency or body, or approval of the shareholders of the
Company, is required for the execution, delivery and performance of
this Agreement, the Placement Agent Warrants, and each of the
Purchase Agreements or for the consummation of the transactions
contemplated hereby and thereby, including the issuance or sale of
the Shares by the Company, except such as have been obtained or
made, and such as may be required under the securities, or blue
sky, laws of any jurisdiction in connection with the offer and sale
of the Shares by the Company in the manner contemplated herein and
in the Registration Statement and the Prospectus.
(n)
Capitalization . All of the issued and outstanding shares of
capital stock of the Company are duly authorized and validly
issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities that have not been
waived in writing. As of the date hereof and as of the Closing
Date, the Company has or will have, as the case may be, an
authorized, issued and outstanding capitalization as is set forth
under the caption “Capitalization” in the Prospectus
Supplement (subject, in each case, to the issuance of shares of
Common Stock upon exercise of stock options and warrants disclosed
as outstanding in the Registration Statement and the
9
Prospectus and grant of options
under existing stock option plans described in the Registration
Statement and the Prospectus), and such authorized capital stock
conforms to the description thereof set forth in the Registration
Statement and the Prospectus. Except as described in the
Registration Statement and the Prospectus, as of the date referred
to therein, the Company did not have outstanding any options,
warrants, agreements, contracts or other rights in existence to
purchase or acquire from the Company or any Subsidiary of the
Company any shares of the capital stock of the Company or any
Subsidiary of the Company.
(o)
Title to Real and Personal Property . The Company and each
of its Subsidiaries has good and valid title to all property
(whether real or personal) described in the Registration Statement
and Prospectus as being owned by each of them, in each case free
and clear of all liens, claims, security interests, other
encumbrances or defects except such as are described in the
Registration Statement and the Prospectus and those that do not
materially and adversely affect the value of such property and do
not materially interfere with the use made of such property by the
Company. All of the property described in the Registration
Statement and the Prospectus as being held under lease by the
Company or a Subsidiary are held thereby under valid, subsisting
and enforceable leases.
(p)
Title to Intellectual Property . The Company and its
Subsidiaries own, possess, license or have other rights to use all
foreign and domestic patents, patent applications, trade and
service marks, trade and service mark registrations, trade names,
copyrights, licenses, inventions, trade secrets, technology,
Internet domain names, know-how and other intellectual property,
necessary for the conduct of the Company’s businesses as now
conducted or as proposed in the Prospectus to be conducted
(collectively, the “ Intellectual
Property ”). Except as set forth in the Prospectus,
(a) the Company has not received written notice, and has no
knowledge of, any rights of third parties to any such Intellectual
Property; (b) to the Company’s knowledge, there is no
infringement by third parties of any such Intellectual Property;
(c) there is no pending or, to the Company’s knowledge
, threatened action, suit, proceeding or claim by others
challenging the Company’s and its Subsidiaries’ rights
in or to any such Intellectual Property; (d) there is no pending
or, to the Company’s knowledge, threatened action, suit,
proceeding or claim by others challenging the validity or scope of
any such Intellectual Property; (e) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or
claim by others that the Company infringes or otherwise violates
any patent, trademark, copyright, trade secret or other proprietary
rights of others; (f) to the Company’s knowledge, there is no
third-party U.S. patent or published U.S. patent application which
contains claims for which an Interference Proceeding (as defined in
35 U.S.C. § 135) has been commenced against any patent or
patent application which constitutes the Intellectual Property
described in the Prospectus; and (g) the Company has taken all
steps necessary to perfect its ownership of the Intellectual
Property, in each of clauses (a)-(g) except for such infringement,
conflict or action which would not, singularly or in the aggregate,
reasonably be expected to result in a Material Adverse
Effect.
(q)
No Violation or Default . Neither the Company nor any of its
Subsidiaries is (i) in violation of any provision of its charter or
bylaws or similar organizational documents, (ii) is in default in
any respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due
performance or observance of any term, covenant, or condition of
any indenture, contract, lease, mortgage, deed of trust, note
agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or by
which it is bound or to which any of its property or assets is
subject, or (iii) is in violation in any respect of any statute,
law, rule, regulation, ordinance, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company,
its Subsidiaries or any of its properties of which it has
knowledge, as applicable, except, with respect to clauses (ii) and
(iii), any violations or defaults which, singularly or in the
aggregate, would not reasonably be expected to result in a Material
Adverse Effect.
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(r)
Permits . Except as otherwise disclosed in the Registration
Statement and the Prospectus or except as would not result in a
Material Adverse Effect, the Company and each subsidiary possess
such valid and current certificates, licenses, authorizations or
permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct their respective
businesses, and neither the Company nor any subsidiary has received
any notice of proceedings relating to the limitation, revocation or
modification of, or non-compliance with, any such certificate,
authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result
in a Material Adverse Effect.
(s)
Taxes . The Company and its Subsidiaries have timely filed
all federal, state, local and foreign income and franchise tax
returns (or timely filed applicable extensions therefore) required
to be filed and are not in default in the payment of any taxes
which were payable pursuant to said returns or any assessments with
respect thereto, other than any which the Company or any of its
Subsidiaries is contesting in good faith and for which adequate
reserves have been provided.
(t)
Listing . The Common Stock (including the Shares) is
registered pursuant to Section 12(g) of the Exchange Act and the
Company, in the two years preceding the date hereof, has not
received any notification (written or oral) from the American Stock
Exchange, any stock exchange, market or trading facility on which
the Common Stock is or has been listed (or on which it has been
quoted) to the effect that the Company is not in compliance with
the listing or maintenance requirements of such exchange, market or
trading facility. The Company shall comply with all requirements of
the American Stock Exchange with respect to the issuance of the
Shares and shall use its best efforts to have the Shares listed on
the American Stock Exchange on or before the Closing
Date.
(u)
Internal Controls . The Company and each of its Subsidiaries
maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in
accordance with management’s general or specific
authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles 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.
(v)
Disclosure Controls . The Company has established and
maintains disclosure controls and procedures (as such term is
defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act),
which (i) are designed to ensure that material information relating
to the Company is made known to the Company’s principal
executive officer and its principal financial officer by others
within those entities, particularly during the periods in which the
periodic reports required under the Exchange Act are being
prepared; (ii) provide for the periodic evaluation of the
effectiveness of such disclosure controls and procedures as of the
end of each of the Company’s quarterly and annual fiscal
periods; and (iii), as of the end of the periods covered by each
periodic report filed under the Exchange Act and incorporated by
reference into the Prospectus Supplement, were effective in all
material respects to perform the functions for which they were
established. The Company’s auditors and the Audit Committee
of the Board of Directors have not been advised of (i) any
significant deficiency in the design or operation of internal
controls which could adversely affect the Company’s ability
to record, process, summarize and report financial data or any
material weaknesses in internal controls; or (ii) any fraud,
whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal controls. Since the date of the most recent evaluation of
such disclosure controls and procedures, there have been no changes
that have materially affected, or are reasonably likely to
materially affect, the Company’s internal control over
financial reporting, including any corrective actions with regard
to significant deficiencies and material weaknesses.
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(w)
No Undisclosed Relationships . No relationship, direct or
indirect, exists between or among the Company on the one hand and
the directors, officers, stockholders, customers or suppliers of
the Company on the other hand which is required to be described in
the Prospectus and which is not so described.
(x)
No Registration Rights . Except as described in the
Prospectus, no person or entity has the right, contractual or
otherwise, to require registration of the Common Stock or other
securities of the Company because of the filing or effectiveness of
the Registration Statement or otherwise, except for persons and
entities who have expressly waived such right or who have been
given proper notice and have failed to exercise such right within
the time or times required under the terms and conditions of such
right, and the Company is not required to file any registration
statement for the registration of any securities of any person or
register any such securities pursuant to any other registration
statement filed by the Company under the Securities Act for a
period of at least 180 days after the Effective Date.
(y)
Sarbanes-Oxley Act . The principal executive officer and
principal financial officer of the Company have made all
certifications required by Sections 302 and 906 of the
Sarbanes-Oxley Act of 2002 and the rules and regulations
promulgated in connection therewith (the “
Sarbanes-Oxley Act ”) with respect to all
reports, schedules, forms, statements and other documents required
to be filed by it with the Commission, and the statements contained
in any such certification are complete and correct. The Company,
and to its knowledge after due inquiry, all of the Company’s
directors or officers, in their capacities as such, is in
compliance in all material respects with all applicable effective
provisions of the Sarbanes-Oxley Act (and intends to comply with
all applicable provisions that are not yet effective upon
effectiveness).
(z)
Compliance with Environmental Laws . (i) The Company and
each of its Subsidiaries is in compliance in all material respects
with all rules, laws and regulation relating to the use, treatment,
storage and disposal of toxic substances and protection of human
health and safety or the environment (“ Environmental
Laws ” ) which are applicable to its business, except
where the failure to comply would not reasonably be expected to
result in a Material Adverse Effect; (ii) neither the Company nor
its Subsidiaries has received any written notice from any
governmental authority or third party of an asserted claim under
Environmental Laws; (iii) the Company and each of its Subsidiaries
has received all material permits, licenses or other approvals
required of it under applicable Environmental Laws to conduct its
business and is in compliance with all material terms and
conditions of any such permit, license or approval, except where
the failure to receive or comply would not reasonably be expected
to result in a Material Adverse Effect; (iv) to the Company’s
knowledge after reasonable due inquiry, no facts currently exist
that will require the Company or any of its Subsidiaries to make
future material capital expenditures to comply with Environmental
Laws; and (v) no property which is or has been owned, leased or
occupied by the Company or its Subsidiaries has been designated as
a Superfund site pursuant to the Comprehensive Environmental
Response, Compensation of Liability Act of 1980, as amended (42
U.S.C. Section 9601, et. seq,) (“ CERCLA
”) or otherwise designated as a contaminated site under
applicable state or local law. Neither the Company nor any of its
Subsidiaries has been named as a “potentially responsible
party” under CERCLA.
(aa)
Compliance with ERISA . Each of the Company and its
Subsidiaries has fulfilled its obligations, if any, under the
minimum funding standards of Section 302 of the United States
Employee Retirement Income Security Act of 1974 (“
ERISA ”) and the regulations and published
interpretations thereunder with respect to each “ plan
” (as defined in Section 3(3) of ERISA and such regulations
and published interpretations) in which employees of the Company
and its Subsidiaries are eligible to participate and each such plan
is in compliance in all material respects with the presently
applicable provisions of ERISA and such regulations and published
interpretations. No “ prohibited transaction ”
(as defined in Section 406 of ERISA, or Section 4975 of the
Internal Revenue Code of 1986, as amended from time to time (the
“ Code ”)) has occurred with respect to
any employee benefit
12
plan which could reasonably be
expected to result in a Material Adverse Effect. The Company and
each of its Subsidiaries has not incurred any unpaid liability to
the Pension Benefit Guaranty Corporation (other than for the
payment of premiums in the ordinary course) or to any such plan
under Title IV of ERISA,
(bb)
No Labor Disputes . No labor problem or dispute with the
employees of the Company or any of its Subsidiaries exists or, to
the Company’s knowledge, is threatened or imminent, which
would reasonably be expected to result in a Material Adverse
Effect. The Company is not aware that any key employee or
significant group of employees of the Company or any of its
Subsidiaries plans to terminate employment with the Company or any
such Subsidiary.
(cc)
Insurance . The Company and each of its Subsidiaries is
insured by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and
customary in the businesses in which they are engaged or propose to
engage after giving effect to the transactions described in the
Prospectus; all policies of insurance and fidelity or surety bonds
insuring the Company and each of its Subsidiaries and their
businesses, assets, employees, officers and directors are in full
force and effect; the Company and each of its Subsidiaries is in
compliance with the terms of such policies and instruments in all
material respects; and the Company and each of its Subsidiaries has
no reason to believe that it will not be able to renew its 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 is not materially greater than
the current cost, except where the failure to obtain would not
reasonably be expected to result in a Material Adverse
Effect.
(dd)
No Stabilization . Neither the Company nor any of its
Subsidiaries nor, to its knowledge, any of their officers,
directors, affiliates or controlling persons 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.
(ee)
Investment Company Act . Neither the Company nor any of its
Subsidiaries is or, after giving effect to the offering and sale of
the Shares and the application of the proceeds thereof as described
in the Prospectus, will be required to register as an
“ investment company” as defined in the
Investment Company Act of 1940, as amended.
(ff)
No Broker’s Fees . Aside from this Agreement, neither
the Company nor any of its Subsidiaries is a party to any contract,
agreement or understanding with any person (other than this
Agreement) that would give rise to a valid claim against the
Company or its Subsidiaries or the Placement Agent for a brokerage
commission, finder’s fee or like payment in connection with
the offering and sale of the Shares.
(gg)
Contracts . Each description of a contract, document or
other agreement in the Registration Statement and the Prospectus
accurately reflects in all material respects the terms of the
underlying contract, document or other agreement. Each contract,
document or other agreement described in the Registration Statement
and Prospectus or listed in the exhibits to the Registration
Statement or incorporated therein by reference is in full force and
effect, unless validly terminated in accordance with the provisions
thereof, and is valid and enforceable by and against the Company or
its Subsidiary, as the case may be, in accordance with its terms,
except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the rights and remedies of creditors generally and subject to
general principles of equity, Neither the Company nor any of its
Subsidiaries, if a Subsidiary is a party, nor to the
Company’s knowledge, any other party, is in default in the
observance or performance of any term or obligation to be performed
by it under any such agreement, and no event has occurred which
with notice or lapse of time or both would constitute such a
default, in any such case which default or event, individually or
in the aggregate, would reasonably be expected to result in a
Material Adverse Effect.
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(hh)
Forward-Looking Statements . No forward-looking statement
(within the meaning of Section 27A of the Securities Act and
Section 21E of the Exchange Act) contained in the Registration
Statement and the Prospectus has been made or reaffirmed without a
reasonable basis or has been disclosed other than in good
faith.
(ii)
Corporate Records . All existing minute books of the Company
and each of its Subsidiaries, including all existing records of all
meetings and actions of the board of directors (including, Audit,
Compensation and Nomination/Corporate Governance Committees) and
stockholders of the Company through the date of the latest meeting
and action (collectively, the “ Corporate
Records ”) have been made available to the Placement
Agent and counsel for the Placement Agent. All such Corporate
Records are complete in all material respects and accurately and
fairly reflect, in reasonable detail, all transactions referred to
in such Corporate Records.
(jj)
Foreign Corrupt Practices . Neither the Company nor any of
its Subsidiaries, nor, to the knowledge of the Company, any
director, officer, agent or employee of the Company or its
Subsidiaries, has, directly or indirectly, while acting on behalf
of the Company or its Subsidiaries (i) used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity; (ii) made any unlawful
payment to foreign or domestic government officials or employees or
to foreign or domestic political parties or campaigns from
corporate funds; (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; (iv) made any other
unlawful bribe, rebate, payoff, influence, kickback or payment to
any foreign or domestic government official or employee.
(kk)
Off-Balance Sheet Arrangements . There are no material off
balance sheet arrangements (as defined in Item 303 of Regulation
S-K) that have or would reasonably be likely to have a material
current or future effect on the Company’s financial
condition, revenues or expenses, changes in financial condition,
results of operations, liquidity, capital expenditures or capital
resources, including those off-balance sheet transactions described
in the Commission’s Statement about Management’s
Discussion and Analysis of Financial Conditions and Results of
Operations (Release Nos 33-8056; 34-45321; FR-61), required to be
described in the Prospectus which have not been so
described.
(ll)
Regulatory Filings . Each of the Company and its
Subsidiaries has filed with the applicable regulatory authorities
all filings, declarations, listings, registrations, reports and
submissions required to be filed; all such filings, declarations,
listings, registrations, reports or submissions were in compliance
with applicable laws when filed, except for any non-compliance that
individually or in the aggregate would not reasonably be expected
to result in a Material Adverse Effect, and no deficiencies have
been asserted by any applicable regulatory authority with respect
to any such filings, declarations, listings, registrations, reports
or submissions. To the Company’s knowledge, there are no
affiliations or associations between any member of the National
Association of Securities Dealers, Inc. (the “
NASD ”) and any of the Company’s
officers, directors or any five percent (5%) or greater
shareholders of the Company, except as set forth in the
Registration Statement and the Prospectus or otherwise disclosed in
writing to the Placement Agent.
Any certificate signed by any
officer of the Company and delivered to the Placement Agent or to
counsel for the Placement Agent shall be deemed a representation
and warranty by the Company to the Placement Agent as to the
matters covered thereby.
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3.
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Representations and Warranties
of the Placement Agent.
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(a) The
Placement Agent is a member in good standing of the NASD and has,
and at all times while taking any actions constituting an offer or
sale of the Shares had, all governmental licenses (including both
federal and state broker dealer licenses) required to act as
placement agent for the Shares.
14
(b) The
Placement Agent has complied, in all material respects, with all
applicable Federal and state laws and applicable rules of the NASD
in connection with its activities as placement agent for the
Shares.
(c) The
Placement Agent has not delivered any materials to the Investors
relating to the Company other than those that are
“communications not deemed a prospectus,” pursuant to
Rule 134 or a prospectus meeting the requirements of Section 10 of
the Securities Act.
4. Delivery
and Payment. On the Closing Date, in accordance with the
terms and conditions of each Investor’s respective Purchase
Agreement, the Company shall sell to, and the Investor(s) shall
purchase, the number of Shares reflected on such Investor’s
Purchase Agreement against payment by such Investor of such
Investor’s aggregate purchase price therefor reflected in the
Investor’s Purchase Agreement.
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5.
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Covenants
. The Company covenants and agrees
with the Placement Agent as follows:
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(a)
Effectiveness . The Registration Statement has become
effectiv
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