Exhibit 99.1
EXECUTION COPY
12,874,547
Shares
Warrants
to Purchase 2,574,911 Shares
Genelabs
Technologies, Inc.
Common
Stock
(No
Par Value)
PLACEMENT AGENCY AGREEMENT
September
26, 2007
Deutsche
Bank Securities Inc.
60
Wall Street, 4
th Floor
New
York, New York 10005
Ladies
and Gentlemen:
Genelabs
Technologies, Inc., a California corporation (the
“Company”), proposes, subject to the terms and
conditions stated in this Placement Agency Agreement (this
“Agreement”) and the Subscription Agreements in
the form of
Exhibit A attached
hereto (the “Subscription Agreements”) entered into
with the investors identified therein (each, an
“Investor” and collectively, the
“Investors”), to
issue and sell up
to an aggregate of 12,874,547 shares (the “Shares”) of
the Company’s common stock, no par value per share (the
“Common Stock”) and warrants to purchase up to
2,574,911 shares of Common Stock (the “Warrants” and,
together with the Shares, the “Securities”) in the form
attached hereto as
Exhibit B .
The shares of Common Stock issuable upon exercise of the Warrants
are hereinafter referred to as the “Warrant Shares.”
The Company hereby confirms its agreement with Deutsche Bank
Securities Inc. (the “Placement Agent”), as set forth
below. The Securities are more fully described in the Registration
Statement (as defined herein).
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 the terms and
conditions set forth in this Agreement:
The
Company hereby authorizes the Placement Agent to act as its
exclusive agent in connection with the issuance and sale, by
the Company, of Securities (the “Offering”) to the
Investors and the Placement Agent hereby agrees, as agent of
the Company, to use its commercially reasonable efforts to
solicit offers to purchase all or part of the Securities from
the Company upon the terms and conditions set forth in the
Prospectus (as defined below). The Placement Agent shall make
commercially reasonable efforts to assist the Company in
obtaining performance by each Investor whose offer to purchase
Securities has been solicited by the Placement Agent and
accepted by the Company, but the Placement Agent shall not,
except as otherwise provided in this Agreement, 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 or any of its affiliates be obligated to
underwrite or purchase any of the Securities for its own
account or otherwise provide any financing. The Placement
Agent shall act solely as the Company’s agent and not as
principal. The Placement Agent shall have no authority to bind
the Company with respect to any prospective offer to purchase
Securities and the Company shall have the sole right to accept
offers to purchase Securities and may reject any such offer,
in whole or in part.
As
compensation for services rendered, on the Closing Date, the
Company shall pay or cause to be paid 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 eight percent (8.0%) of the gross proceeds
received by the Company from its sale of the Securities on
such Closing Date, without taking into account any proceeds
from the exercise of the warrants (the “Agency
Fee”).
The
purchases of Securities by the Investors shall be evidenced by
the execution of the Subscription Agreements by each of the
parties thereto in the form attached hereto as
Exhibit A .
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 Securities of the Company
(other than pursuant to the exercise of options or warrants to
purchase shares of Common Stock that are outstanding at the
date hereof) otherwise than through the Placement Agent in
accordance herewith.
No
Securities which the Company has agreed to sell pursuant to
this Agreement shall be deemed to have been purchased and paid
for, or sold by the Company, until such Securities shall have
been delivered to the Investor purchasing such Securities
against payment by such Investor. If the Company shall
default in its obligations to deliver Securities to an
Investor whose offer it has accepted, the Company shall
indemnify and hold the Placement Agent harmless against any
loss, claim, damage or liability directly or indirectly
arising from or as a result of such default by the
Company.
Payment
of the purchase price for, and delivery of, the Securities
shall be made at a closing (the “Closing”) at the
offices of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel for the Company, located at 525 University Avenue,
Suite 1100, Palo Alto, California, at 10:00 a.m., local time,
on October 1, 2007 or at such other time and date as the
Placement Agent and the Company determine pursuant to Rule
15c6-1(a) under the Exchange Act (such date of payment and
delivery being herein referred to as the “Closing
Date”). The Company, the Placement Agent and
JPMorganChase Bank, as escrow agent (the “Escrow
Agent”), have entered into an escrow agreement, dated as
of the date hereof (the “Escrow Agreement”)
pursuant
to which an escrow account will be established, at the
Company's expense, for the benefit of the Company and the
Investors (the “Escrow Account”). Subject to the
terms hereof and of the Escrow Agreement ,
payment of the purchase price for the Securities shall be made
to the Company in the manner set forth below by Federal Funds
wire transfer, against delivery of the Securities to such
persons and
shall be registered in the name or names and shall be in such
denominations as the Placement Agent may request at least one
business day before the Closing Date. Payment of the purchase
price for the Securities to be purchased by Investors shall be
made by such Investors directly to the Escrow Agent and the
Escrow Agent agrees to hold such purchase price in escrow in
accordance with the terms of the Escrow Agreement. Subject to
the terms and conditions hereof and of the Subscription
Agreements and the Escrow Agreement, the Escrow Agent shall,
on the Closing Date, deliver to the Company, by Federal Funds
wire transfer, the aggregate purchase price so held by such
person in escrow, reduced by an amount equal to the sum of the
aggregate Agency Fee payable to the Placement Agent.
Thereafter, the Escrow Agent’s obligations with respect
to the escrow of the purchase price so held by it shall cease.
Each of the Company and the Placement Agent hereby agree to
deliver to the Escrow Agent a Closing Notice in the form
attached as
Exhibit C to
the Escrow Agreement at least one day prior to the Closing
Date.
Any
Investor not settling its purchase of Securities pursuant to
Section 1(f) above shall deposit its respective Purchase
Amount into an account or accounts established with the
Placement Agent. On the Closing Date, the Placement Agent
shall, with respect to each such Investor, cause the Purchase
Amount for such Securities to be wired from such accounts to
an account designated by the Company in exchange for the
release of such Investor’s Securities.
2.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
.
The
Company represents and warrants to the Placement Agent as
follows:
(a)
A
“shelf” registration statement on Form S-3 (File
No. 333- 145497
)
with respect to the Securities has been prepared by the
Company in conformity with the requirements of the Securities
Act of 1933, as amended (the “Act”), and the rules
and regulations (the “Rules and Regulations”) of
the Securities and Exchange Commission (the
“Commission”) thereunder and has been filed with
the Commission and has become effective. The Company and the
transactions contemplated by this Agreement meet the
requirements and comply with the conditions for the use of
Form S-3. The Registration Statement meets the requirements of
Rule 415(a)(1)(x) under the Act and complies in all material
respects with said rule. Copies of such registration
statement, including any amendments thereto, the base
prospectus (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial
statements and schedules, as finally amended and revised, have
heretofore been delivered by the Company to the Placement
Agent. Such registration statement, together with any
registration statement filed by the Company pursuant to Rule
462(b) under the Act, is herein referred to as the
“Registration Statement,” which shall be deemed to
include all information omitted therefrom in reliance upon
Rules 430B or 430C under the Act and contained in the
Prospectus referred to below. No post-effective amendment to
the Registration Statement has been filed as of the date of
this Agreement. The term “Prospectus” as used in
this Agreement means the form of base prospectus together with
the final prospectus supplement first filed with the
Commission pursuant to and within the time limits described in
Rule 424(b) under the Act. Any preliminary prospectus relating
to the Securities prior of the date hereof is referred to as a
“Preliminary Prospectus.” Any reference herein to
the Registration Statement, any Preliminary Prospectus or the
Prospectus or to any amendment or supplement to any of the
foregoing documents shall be deemed to refer to and include
any documents incorporated by reference therein, and, in the
case of any reference herein to the Prospectus, also shall be
deemed to include any documents incorporated by reference
therein, and any supplements or amendments thereto, filed with
the Commission after the date of filing of the Prospectus
Supplement under Rule 424(b) under the Act, and prior to the
termination of the offering of the Securities by the Placement
Agent.
(b)
As
of the Applicable Time (as defined below) and as of the
Closing Date, neither (i) the General Use Free Writing
Prospectus(es) (as defined below) issued at or prior to the
Applicable Time, the Statutory Prospectus (as defined below)
and the information included on
Exhibit E hereto,
all considered together (collectively, the “General
Disclosure Package”), nor (ii) any individual Limited Use
Free Writing Prospectus (as defined below), when considered
together with the General Disclosure Package, included or will
include any untrue statement of a material fact or omitted or 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 the General Disclosure
Package or any Issuer Free Writing Prospectus, in reliance upon,
and in conformity with, written information furnished to the
Company by the Placement Agent, specifically for use therein, it
being understood and agreed that the only such information is that
described in Section 11 herein. As used in this subsection and
elsewhere in this Agreement:
“Applicable
Time” means 8:00 a.m. (New York City time) on the date
of this Agreement or such other time as agreed to by the
Company and the Placement Agent.
“Statutory
Prospectus” as of any time means the Preliminary
Prospectus relating to the Securities that is included in the
Registration Statement immediately prior to that
time.
“Issuer
Free Writing Prospectus” means any “issuer free
writing prospectus,” as defined in Rule 433 under the
Act, relating to the Securities
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) under the
Act.
“General
Use Free Writing Prospectus” means any Issuer Free
Writing Prospectus that is identified on
Schedule I to
this Agreement.
“Limited
Use Free Writing Prospectus” means any Issuer Free
Writing Prospectus that is not a General Use Free Writing
Prospectus.
(c)
The
Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of
California, with full corporate power and authority to own or
lease its properties and conduct its business as described in
the Registration Statement, the General Disclosure Package and
the Prospectus. 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 on
Schedule II hereto
(collectively, the “Subsidiaries”). Each of the
Subsidiaries has been duly organized and is validly existing as an
entity in good standing under the laws of the jurisdiction of its
organization, with corporate power and authority to own or lease
its properties and conduct its business as described in the
Registration Statement, the General Disclosure Package and the
Prospectus. The Subsidiaries are the only subsidiaries, direct or
indirect, of the Company. The Company and each of the Subsidiaries
are duly qualified to transact business in all jurisdictions in
which the conduct of their business requires such qualification,
except where the failure to be so qualified could not reasonably be
expected to (i) result in any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the earnings, business, management, properties,
prospects, assets, rights, operations, or condition (financial or
otherwise) of the Company and of the Subsidiaries taken as a whole,
or (ii) prevent, burden or impair the consummation of the
transactions contemplated by this Agreement (collectively a
“Material Adverse Effect”). The outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and are owned
by the Company or another Subsidiary free and clear of all liens,
encumbrances and equities and claims; and no options, warrants or
other rights to purchase, agreements or other obligations to issue
or other rights to convert any obligations into shares of capital
stock or ownership interests in the Subsidiaries are
outstanding.
(d)
The
outstanding shares of Common Stock of the Company have been
duly authorized and validly issued and are fully paid and
non-assessable, have been issued in compliance with all
federal and state securities laws, were not issued in
violation of or subject to any preemptive rights or other
rights to subscribe for or purchase or acquire any securities
of the Company that have not been waived in writing. The
Shares to be issued and sold by the Company have been duly
authorized and when issued and paid for as contemplated herein
and in the Subscription Agreements, will be validly issued,
fully paid and non-assessable; and no preemptive rights of
stockholders exist with respect to any of the Shares or the
issue and sale thereof. The Warrants conform,
or when issued will conform, to the description thereof
contained in the General Disclosure Package and the Prospectus
and have
been duly authorized and when issued and paid for as
contemplated herein and in the Subscription Agreements,
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 contained in the General Disclosure
Package and 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. Neither
the filing of the Registration Statement nor the offering or
sale of the Securities as contemplated by this Agreement gives
rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any shares
of Common Stock.
(e)
The
information set forth under the caption “Description of
the Common Stock and Preferred Stock We May Offer” in
the Registration Statement and the Prospectus (and any similar
section or information contained in the General Disclosure
Package) is true and correct. All of the Securities conform to
the description thereof contained in the Registration
Statement, the General Disclosure Package and the Prospectus.
The form of certificates for the Securities conforms to the
corporate law of the jurisdiction of the Company’s
incorporation.
(f)
The
Commission has not issued an order preventing or suspending
the use of any Preliminary Prospectus, any Issuer Free Writing
Prospectus or the Prospectus relating to the proposed offering
of the Securities, and no proceeding for that purpose or
pursuant to Section 8A of the Act has been instituted or, to
the Company’s knowledge, threatened by the Commission.
The Registration Statement, as of its effective date,
contained and as of the date hereof, contains, and the
Prospectus, as of its date, contained and any amendments or
supplements thereto will contain, all statements which are
required to be stated therein by, and will conform to, the
requirements of the Act and the Rules and Regulations. The
documents incorporated, or to be incorporated, by reference in
the Prospectus, at the time filed with the Commission
conformed or will conform, in all respects to the requirements
of the Securities Exchange Act of 1934 (“Exchange
Act”) or the Act, as applicable, and the rules and
regulations of the Commission thereunder. The Registration
Statement and any amendments thereto, as of its effective
date, the date hereof and the Closing Date, did not contain,
do not contain, and will not contain, any untrue statement of
a material fact and did not omit, do not omit, and will not
omit, to state a material fact required to be stated therein
or necessary to make the statements therein not misleading.
The Prospectus and any amendments and supplements thereto, as
of its date, the date hereof and the Closing Date, did not
contain, do not contain, and will not contain, any untrue
statement of a material fact; and did not omit, do not omit,
and will not 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 the Registration Statement
or the Prospectus, or any such amendment or supplement, in reliance
upon, and in conformity with, written information furnished to the
Company by the Placement Agent, specifically for use therein, it
being understood and agreed that the only such information is that
described in Section 11 herein.
(g)
Each
Issuer Free Writing Prospectus, as of its issue date and at
all subsequent times through the completion of the public
offer and sale of the Securities or until any earlier date
that the Company notified or notifies the Placement Agent as
described in the next sentence, did not, does not and will not
include any information that conflicted, conflicts or will
conflict with the information contained in the Registration
Statement, any Statutory Prospectus or the Prospectus,
including any document incorporated by reference therein that
has not been superseded or modified. If
at any time following issuance of an Issuer Free Writing
Prospectus, there occurred or occurs an event or development
as a result of which such Issuer Free Writing Prospectus
included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in light of
the circumstances, not misleading, the Company has notified or
will notify promptly the Placement Agent so that any use of
such Issuer Free Writing Prospectus may cease until it is
amended or supplemented. The foregoing two sentences do not
apply to statements or omissions from any Issuer Free Writing
Prospectus based upon and in conformity with written
information furnished to the Company by the Placement Agent
specifically for use therein.
(h)
The
Company has not, directly or indirectly, distributed and will
not distribute any offering material in connection with the
offering and sale of the Securities other than any Preliminary
Prospectus, the Prospectus, any Permitted Free Writing
Prospectus (defined below) and other materials, if any,
permitted under the Act and consistent with Section 3(b)(ii)
below. The Company will file with the Commission all Issuer
Free Writing Prospectuses in the time required under Rule
433(d) under the Act. The Company has satisfied or will
satisfy the conditions in Rule 433 under the Act to avoid a
requirement to file with the Commission any electronic road
show.
(i)
(i)
At the time of filing the Registration Statement and (ii) as
of the date hereof (with such date being used as the
determination date for purposes of this clause (ii)), the
Company was not and is not an “ineligible issuer”
(as defined in Rule 405 under the Act, without taking into
account any determination by the Commission pursuant to Rule
405 under the Act that it is not necessary that the Company be
considered an ineligible issuer), including, without
limitation, for purposes of Rules 164 and 433 under the Act
with respect to the offering of the Securities as contemplated
by the Registration Statement.
(j)
The
consolidated financial statements of the Company and the
Subsidiaries, together with related notes and schedules as set
forth or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus,
present fairly the financial position and the results of
operations and cash flows of the Company and the consolidated
Subsidiaries, at the indicated dates and for the indicated
periods. Such financial statements and related schedules have
been prepared in accordance with generally accepted principles
of accounting (“GAAP”), consistently applied
throughout the periods involved, except as disclosed therein,
and all adjustments necessary for a fair presentation of
results for such periods have been made. The summary and
selected consolidated financial and statistical data included
or incorporated by reference in the Registration Statement,
the General Disclosure Package and the Prospectus presents
fairly the information shown therein and such data has been
compiled on a basis consistent with the financial statements
presented therein and the books and records of the Company.
All disclosures contained in the Registration Statement, the
General Disclosure Package and the Prospectus regarding
“non-GAAP financial measures” (as such term is
defined by the Rules and Regulations) comply with Regulation G
of the Exchange Act and Item 10 of Regulation S-K under the
Act, to the extent applicable. The Company and the
Subsidiaries do not have any material liabilities or
obligations, direct or contingent (including any off-balance
sheet obligations or any “variable interest
entities” within the meaning of Financial Accounting
Standards Board Interpretation No. 46), not disclosed in the
Registration Statement, the General Disclosure Package and the
Prospectus. There are no financial statements (historical or
pro forma) that are required to be included in the
Registration Statement, the General Disclosure Package or the
Prospectus that are not included as required.
(k)
Ernst
& Young LLP, who have certified certain of the financial
statements filed with the Commission as part of, or
incorporated by reference in, the Registration Statement, the
General Disclosure Package and the Prospectus, is an
independent registered public accounting firm with respect to
the Company and the Subsidiaries within the meaning of the Act
and the applicable Rules and Regulations and
the
Public Company Accounting Oversight Board (United States) (the
“PCAOB”) .
(l)
Except
as disclosed in the
Registration Statement, the General Disclosure Package and the
Prospectus ,
neither the Company nor any of the Subsidiaries is aware of
(i) any material weakness in its internal control over
financial reporting or (ii) change in internal control over
financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s
internal control over financial reporting.
(m)
Solely
to the extent that the Sarbanes-Oxley Act of 2002, as amended,
and the rules and regulations promulgated by the Commission
and the Nasdaq Capital Market thereunder (the
“Sarbanes-Oxley Act”) has been applicable to the
Company, there is and has been no failure on the part of the
Company to comply in all material respects with any provision
of the Sarbanes-Oxley Act. The Company has taken all necessary
actions to ensure that it is in compliance with all provisions
of the Sarbanes-Oxley Act that are in effect and with which
the Company is required to comply and is actively taking steps
to ensure that it will be in compliance with other provisions
of the Sarbanes-Oxley Act not currently in effect or which
will become applicable to the Company.
(n)
There
is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or
any of the Subsidiaries before any court or administrative
agency or otherwise which if determined adversely to the
Company or any of the Subsidiaries would have, individually or
in the aggregate, a Material Adverse Effect, except as set
forth in the Registration Statement, the General Disclosure
Package and the Prospectus.
(o)
The
Company and the Subsidiaries have good and marketable title to
all of the properties and assets reflected in the consolidated
financial statements hereinabove described or described in the
Registration Statement, the General Disclosure Package and the
Prospectus, subject to no lien, mortgage, pledge, charge or
encumbrance of any kind except those reflected in such
financial statements or described in the Registration
Statement, the General Disclosure Package and the Prospectus
or which are not material in amount or would not materially
interfere with the use to be made of such properties or
assets. The Company and the Subsidiaries occupy their leased
properties under valid and binding leases conforming in all
material respects to the description thereof set forth in the
Registration Statement, the General Disclosure Package and the
Prospectus.
(p)
Except
as would not have a Material Adverse Effect, the Company and
the Subsidiaries have filed all Federal, State, local and
foreign tax returns which have been required to be filed and
have paid all taxes indicated by such returns and all
assessments received by them or any of them to the extent that
such taxes have become due and are not being contested in good
faith and for which an adequate reserve for accrual has been
established in accordance with GAAP. All tax liabilities have
been adequately provided for in all material respects in the
financial statements of the Company, and the Company does not
know of any actual or proposed additional material tax
assessments.
(q)
Since
the respective dates as of which information is given in the
Registration Statement, the General Disclosure Package and the
Prospectus, as each may be amended or supplemented, there has
not been any material adverse change or any development
involving a prospective material adverse change in or
affecting the earnings, business, management, properties,
assets, rights, operations, condition (financial or
otherwise), or prospects of the Company and the Subsidiaries
taken as a whole, whether or not occurring in the ordinary
course of business, and there has not been any material
transaction entered into or any material transaction that is
probable of being entered into by the Company or the
Subsidiaries, other than transactions in the ordinary course
of business and changes and transactions described in the
Registration Statement, the General Disclosure Package and the
Prospectus, as each may be amended or supplemented. The
Company and the Subsidiaries have no material contingent
obligations which are not disclosed in the Company’s
financial statements which are included in the Registration
Statement, the General Disclosure Package and the
Prospectus.
(r)
Neither
the Company nor any of the Subsidiaries is or with the giving
of notice or lapse of time or both, will be, (i) in violation
of its certificate or articles of incorporation, by-laws,
certificate of formation, limited liability agreement,
partnership agreement or other organizational documents, (ii)
in violation of or in default under any agreement, lease,
contract, indenture or other instrument or obligation to which
it is a party or by which it, or any of its properties, is
bound, or (iii) in violation in
the performance or observance of any statute, law, rule,
regulation, ordinance, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the
Company or any of its properties, as applicable (including,
without limitation, those administered by the Food and Drug
Administration of the U.S. Department of Health and Human
Services (the “
FDA ”)
or by any foreign, federal, state or local governmental or
regulatory authority performing functions similar to those
performed by the FDA), except, with respect to clauses (ii) and
(iii) above and with respect to any of the Company's Subsidiaries,
also clause (i) above, to the extent any such contravention has
been waived or would not result in a Material Adverse Effect
.
The execution and delivery of this Agreement, each Subscription
Agreement and the Escrow Agreement and the consummation of the
transactions herein contemplated and the fulfillment of the terms
hereof will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under,
(i) any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary or any of their respective
properties is bound except as would not have a Material Adverse
Effect, (ii) the certificate or articles of incorporation or
by-laws of the Company or (iii) any law, order, rule or regulation
judgment, order, writ or decree applicable to the Company or any
Subsidiary of any court or of any government, regulatory body or
administrative agency or other governmental body having
jurisdiction.
(s)
There
is no document, contract or other agreement required to be
described in the Registration Statement, the General
Disclosure Package or the Prospectus or to be filed as an
exhibit to the Registration Statement which is not described
or filed as required by the Act or the Rules and Regulations.
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,
the General Disclosure Package and the Prospectus or listed in
the exhibits to the Registration Statement or incorporated by
reference is in full force and effect and is valid and
enforceable by and against the Company in accordance with its
terms (except as rights to indemnity and contribution
thereunder may be limited by federal or state securities laws
and matter of public policy and except as the enforceability
thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and by
general equitable principle). Neither the Company nor any of
its Subsidiaries 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 or any other agreement or instrument to which the
Company or its Subsidiaries is a party or by which the Company
or its Subsidiaries or their respective properties or
businesses may be bound, and no event has occurred which with
notice or lapse of time or both would constitute such a
default, in any such case in which the default or event,
individually or in the aggregate, would have a Material
Adverse Effect.
(t)
The
Company has the full right, power and authority to enter into
this Agreement, each of the Subscription Agreements and the
Escrow Agreement, and to perform and discharge its obligations
hereunder and thereunder; and each of this Agreement, the
Escrow Agreement and each Subscription Agreement has been duly
authorized, executed and delivered by the Company and
constitutes a valid, legal and binding obligation of the
Company, enforceable against the Company in accordance with
its terms, except as rights to indemnity 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.
(u)
Each
approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory,
administrative or other governmental body necessary in
connection with the execution and delivery by the Company of
this Agreement, the Subscription Agreements and the Escrow
Agreement, and the consummation of the transactions herein
contemplated (except such additional steps as may be required
by (i) the Commission, (ii) any necessary qualification of the
Securities under the securities or blue sky laws of the
various jurisdictions in which the Securities are being
offered by the Placement Agent and (iii) the
Financial
Industry Regulatory Authority (“FINRA”)
)
has been obtained or made and is in full force and
effect.
(v)
Except
as described in the Registration Statement or in any document
incorporated by reference therein, the Company and each of the
Subsidiaries hold all material licenses, certificates and
permits from governmental authorities which are necessary to
the conduct of their businesses in the manner in which they
are being conducted; the Company and the Subsidiaries each own
or possess the right to use all patents, patent rights,
trademarks, trade names, service marks, service names,
copyrights, license rights, know-how (including trade secrets
and other unpatented and unpatentable proprietary or
confidential information, systems or procedures) and other
intellectual property rights (“Intellectual
Property”) necessary to carry on their business in all
material respects in the manner in which it is being
conducted; to the Company’s knowledge, neither the
Company nor any of the Subsidiaries has infringed, and none of
the Company or the Subsidiaries have received notice of
conflict with, any Intellectual Property of any other person
or entity. The Company has taken all steps reasonably
necessary to secure ownership interests in Intellectual
Property created for it by any contractors. There are no
outstanding options, licenses or agreements of any kind
relating to the Intellectual Property of the Company that are
required to be described in the Registration Statement, the
General Disclosure Package and the Prospectus and are not
described therein in all material respects. The Company is not
a party to or bound by any options, licenses or agreements
with respect to the Intellectual Property of any other person
or entity that are required to be set forth in the Prospectus
and are not described therein in all material respects. To the
Company's knowledge, none of the technology employed by the
Company has been obtained or is being used by the Company in
violation of any contractual obligation binding on the Company
or any of its officers, directors or employees or otherwise in
violation of the rights of any persons. Except as disclosed in
the Registration Statement, the General Disclosure Package and
the Prospectus, the Company has not received any written
communications alleging that the Company has violated,
infringed upon or conflicted with any of the Intellectual
Property of any other person or entity. The Company knows of
no infringement by others of Intellectual Property owned by or
licensed to the Company.
(w)
Since
the respective dates as of which information is set forth in
the Registration Statement, the General Disclosure Package and
the Prospectus, (i) all of the descriptions of the
Company’s legal and governmental proceedings and
procedures before the FDA or any other national, departmental,
state or local governmental body exercising comparable
authority are true and correct in all material respects, (ii)
the studies, tests and preclinical and clinical trials
conducted by or on behalf of the Company and its Subsidiaries
that are described in the Registration Statement, the General
Disclosure Package and the Prospectus were and, if still
pending, are (a) with respect to the foregoing conducted by
employees of the Company or any of its Subsidiaries
(“Company Studies”), being conducted in accordance
with experimental protocols, procedures and controls pursuant
to, where applicable, accepted professional scientific
standards, in each case in all necessary respects and in all
material respects; and (b) with respect to the foregoing
conducted on behalf of the Company or independently by others
using the Company’s or any of its Subsidiaries’
technologies, products or product candidates
(“Independent Studies”), to the Company’s
knowledge, after due inquiry, being conducted in accordance
with experimental protocols, procedures and controls pursuant
to, where applicable, accepted professional scientific
standards, in each case in all necessary respects and in all
material respects; (iii) the descriptions of the results of
the Company Studies, and, to the Company’s knowledge,
after due inquiry, the Independent Studies, contained in the
Registration Statement, the General Disclosure Package and the
Prospectus are true and correct in all material respects; and
(iv) except as disclosed in the Registration Statement, the
General Disclosure Package and the Prospectus, neither the
Company nor its Subsidiaries have received any notices or
correspondence from the FDA, or any national, state or local
governmental body exercising comparable authority requiring
the termination, suspension or material modification of any of
the Company Studies or Independent Studies.
(x)
Neither
the Company, nor to the Company’s knowledge, any of its
affiliates, has taken or may take, directly or indirectly, any
action designed to cause or result in, or which has
constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of
the shares of Common Stock to facilitate the sale or resale of
the Securities. The Company acknowledges that the Placement
Agent may engage in passive market making transactions in the
Securities on the Nasdaq Capital Market in accordance with
Regulation M under the Exchange Act.
(y)
Neither
the Company nor any Subsidiary is or, after giving effect to
the offering and sale of the Securities contemplated hereunder
and the application of the net proceeds from such sale as
described in the Prospectus, will be an “investment
company” within the meaning of such term under the
Investment Company Act of 1940 as amended (the “1940
Act”), and the rules and regulations of the Commission
thereunder.
(z)
The
Company and each of the 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 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.
(aa)
The
Company has established and maintains “disclosure
controls and procedures” (as defined in Rules 13a-14(c)
and 15d-14(c) under the Exchange Act); the Company’s
“disclosure controls and procedures” are
reasonably designed to ensure that all information (both
financial and non-financial) required to be disclosed by the
Company in the reports that it files or submits under the
Exchange Act is recorded, processed, summarized and reported
within the time periods specified in the rules and regulations
of the Exchange Act, and that all such information is
accumulated and communicated to the Company’s management
as appropriate to allow untimely decisions regarding required
disclosure and to make the certifications of the Chief
Executive Officer and Chief Financial Officer of the Company
required under the Exchange Act with respect to such
reports.
(bb)
The
statistical, industry-related and market-related data included
in the Registration Statement, the General Disclosure Package
and the Prospectus are based on or derived from sources which
the Company reasonably and in good faith believes are reliable
and accurate, and such data agree with the sources from which
they are derived.
(cc)
The
operations of the Company and its subsidiaries are and have
been conducted at all times in compliance with applicable
financial record-keeping and reporting requirements of the
Currency and Foreign Transactions Reporting Act of 1970, as
amended, applicable money laundering statutes and applicable
rules and regulations thereunder (collectively, the
“Money Laundering Laws”), and no action, suit or
proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company or
any or its subsidiaries with respect to the Money Laundering
Laws is pending or, to the Company’s knowledge,
threatened.
(dd)
Neither
the Company nor, to the Company’s knowledge, any
director, officer, agent, employee or affiliate of the Company
is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not
directly or indirectly use the proceeds of the offering, or
lend, contribute or otherwise make available such proceeds to
any subsidiary, joint venture partner or other person or
entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(ee)
The
Company and each of the Subsidiaries carry, or are 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.
(ff)
The
Company and each Subsidiary is in complianc
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