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Exhibit 1.1
HYBRIDON, INC.
PLACEMENT AGENCY AGREEMENT
April 15, 2004
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PLACEMENT AGENCY AGREEMENT
April 15, 2004
Thomas Weisel Partners LLC
One Montgomery Street, Suite 3700
San Francisco, CA 94104
Rodman & Renshaw
330 Madison Avenue
New York, NY 10017
Merriman Curham Ford & Co.
601 Montgomery Street, Suite 1800
San Francisco, CA 94111
Ladies and Gentlemen:
Hybridon,
Inc., a Delaware corporation (the "Company"), proposes to issue
and sell to certain investors
(collectively, the "Investors") a minimum of
160,000 Units consisting of an aggregate of
16,000,000 shares of Common Stock,
$.001 par value per share (the "Common
Stock"), and warrants to purchase an
aggregate of 2,880,000 shares of Common Stock (the
"Minimum Units") and a
maximum of 169,000 Units consisting of an
aggregate of 16,900,000 shares of
Common Stock and warrants to purchase an
aggregate of 3,042,000 shares of Common
Stock (the "Maximum Units"). The shares of
Common Stock to be issued as part of
the Units are hereinafter referred to as
the "Shares", the warrants to be issued
as part of the Units are hereinafter
referred to as the "Warrants" and Units
referred to herein are hereinafter referred
to as the "Units". The terms and
conditions of the Warrants are set forth in
the form of the Warrants attached
hereto as Exhibit A, including the exercise
price thereof. The Company desires
to engage Thomas Weisel Partners LLC
("TWP") as its exclusive lead placement
agent and Rodman & Renshaw and Merriman
Curham Ford & Co. as its exclusive
co-placement agents (together with TWC,
each a "Placement Agent" and together,
the "Placement Agents") in connection with
such issuance and sale. The Shares,
the Warrants and the shares of Common Stock
issuable upon exercise of the
Warrants (the "Warrant Shares") are
described in the Prospectus that is referred
to below.
The
Company has prepared and filed, in accordance with the provisions
of
the Securities Act of 1933, as amended, and
the rules and regulations thereunder
(collectively, the "Act"), with the
Securities and Exchange Commission (the
"Commission") a registration statement
under the Act on Form S-3 (File No.
333-111903) dated January 14, 2004. Such
registration statement has been
declared by the Commission to be effective
under the Act. The Company will file
with the Commission pursuant to Rule 424(b)
under the Act a final prospectus
supplement to the Basic Prospectus (as
defined below), describing the Shares,
the Warrants and the Warrant Shares, and
the offering thereof, in such form as
has been provided to the Placement
Agents.
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The term
"Registration Statement" as used in this Agreement means the
registration statement identified above, at
the time it became effective and as
supplemented or amended prior to the
execution of this Agreement, including (i)
all financial schedules and exhibits
thereto and (ii) all documents incorporated
by reference or deemed to be incorporated
by reference therein prior to the
execution of this Agreement. The term
"Basic Prospectus" as used in this
Agreement means the basic prospectus that
was included as part of the
Registration Statement at the time it was
declared effective. The term
"Prospectus Supplement" as used in this
Agreement means any final prospectus
supplement specifically relating to the
Shares, the Warrants and the Warrant
Shares, in the form filed with, or
transmitted for filing to, the Commission
pursuant to Rule 424 under the Act. The
term "Prospectus" as used in this
Agreement means the Basic Prospectus
together with the Prospectus Supplement
except that if such Basic Prospectus is
amended or supplemented on or prior to
the date on which the Prospectus Supplement
was first filed pursuant to Rule
424, the term "Prospectus" shall refer to
the Basic Prospectus as so amended or
supplemented and as supplemented by the
Prospectus Supplement. Any reference
herein to the registration statement, the
Registration Statement, the Basic
Prospectus, any Prospectus Supplement or
the Prospectus shall be deemed to refer
to and include (i) the documents
incorporated by reference therein pursuant to
Form S-3 that are filed prior to the
execution of this Agreement (the
"Incorporated Documents") and (ii) the copy
of the Registration Statement, the
Basic Prospectus, the Prospectus
Supplement, the Prospectus or the Incorporated
Documents filed with the Commission
pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
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 document under
the Securities Exchange Act of 1934, as
amended, and the rules and regulations
thereunder (collectively, the "Exchange
Act") after the effective date of the
Registration Statement, or the date of the
Prospectus, as the case may be, deemed to
be incorporated therein by reference.
As used herein, "business day" shall mean a
day on which the New York Stock
Exchange (the "NYSE") is open for
trading.
The
Company hereby confirms its agreement with each Placement Agent
as
follows:
1.
Agreement to Act as Placement Agent. Upon the basis of the
representations and warranties of the
Company and subject to the terms and
conditions set forth in this Agreement, the
Company engages each Placement Agent
to act, and each Placement Agent agrees to
act, together with each other
Placement Agent, as the Company's exclusive
placement agent, on a best efforts
basis, in connection with the offer and
sale by the Company of Shares and
Warrants to the Investors. As compensation
for services rendered, at the time of
purchase (as defined below) the Company
shall pay to the Placement Agents, by
Federal Funds wire transfer to an account
or accounts designated by the
Placement Agents, an aggregate amount equal
to 7.0% of the gross proceeds
received by the Company in respect of the
sale of the Units (the "Fee"), with
40% of the Fee payable to TWP, 40% of the
Fee payable to Rodman & Renshaw and
20% of the Fee payable to Merriman, Curham
Ford & Co. The purchase price for a
Unit consisting of one hundred (100) Shares
and Warrants to purchase 18 shares
of Common Stock is $70.00.
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This
Agreement shall not give rise to any commitment by the
Placement
Agents or any of their affiliates to
underwrite or purchase any of the Units or
otherwise provide any financing, and the
Placement Agents shall have no
authority to bind the Company in respect of
the sale of any Units. The sale of
the Units shall be made pursuant to
purchase agreements in substantially the
form included as Exhibit B hereto (the
"Purchase Agreements").
2. Payment
and Delivery. Subject to the terms and conditions hereof,
payment of the purchase price for, and
delivery of the Shares and the Warrants
shall be made at the office of Hale and
Dorr, LLP, 60 State Street, Boston, MA
02109 (or at such other place as shall be
agreed upon by the Placement Agents
and the Company), at 10:00 A.M., New York
City time, on April 20, 2004 (unless
another time shall be agreed to by the
Placement Agents and the Company).
Subject to the terms and conditions hereof,
payment of the purchase price for
the Units shall be made to the Company by
Federal Funds wire transfer, against
delivery of (i) the Shares (through the
facilities of The Depository Trust
Company ("DTC")) and (ii) executed
Warrants, to such persons, and the Shares and
the Warrants shall be registered in such
name or names and shall be in such
denominations, as the Placement Agents may
request at least one business day
before the time of purchase (as defined
below). Payment of the purchase price
for the Units shall be made at the time of
purchase by the purchasers thereof
directly to the Company. The time at which
such payment and delivery are to be
made is hereinafter sometimes called "the
time of purchase." With respect to
Warrant Shares, "the time of purchase"
shall mean the time at which payment of
the exercise price of a Warrant is made
against delivery of the underlying
Warrant Shares. Electronic transfer of the
Shares shall be made at the time of
purchase in such names and in such
denominations as is set forth in the Purchase
Agreements.
Deliveries
of the documents described in Section 6 hereof with respect to
the purchase of the Units shall be made at
the offices of Hale and Dorr, LLP, 60
State Street, Boston, MA 02109, at 9:00
A.M., New York City time, on the date of
the closing of the purchase of the Shares
and the Warrants.
3.
Representations and Warranties of the Company. The Company
represents
and warrants to and agrees with each
Placement Agent that:
(a) the Registration Statement has been declared effective under
the
Act; no stop order of the Commission
preventing or suspending the use of the
Basic Prospectus, the Prospectus Supplement
or the Prospectus or the
effectiveness of the Registration Statement
has been issued and no proceedings
for such purpose have been instituted and
are pending or, to the Company's
knowledge, are threatened by the
Commission; at the time the Registration
Statement was declared effective, the
Company was eligible to use Form S-3 in
connection with the offering contemplated
by the Registration Statement; and
such Registration Statement at the date of
this Agreement meets, and the
offering of the Shares, the Warrants and
the Warrant Shares complies with, the
requirements of Rule 415 under the Act. The
Registration Statement complied when
it became effective, complies and will
comply, at the time of purchase, and the
Basic Prospectus and the Prospectus
Supplement conformed as of its date, conform
and will conform at the time of purchase in
all material respects with the
requirements of the Act (including said
Rule 415); any statutes,
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regulations, contracts or other documents
that are required to be described in
the Registration Statement or the
Prospectus or to be filed as exhibits to the
Registration Statement have been and will
be so described or filed; the
conditions to the use of Form S-3 have been
satisfied, to the extent required,
in connection with the offering of the
Units; and the Registration Statement did
not at the time of effectiveness, does not
and will not at the time of purchase
contain an untrue statement of a material
fact or omit to state a material fact
required to be stated therein or necessary
to make the statements therein not
misleading, and the Basic Prospectus and
the Prospectus Supplement did not as of
its date, does not and will not at the time
of purchase contain an untrue
statement of a material fact or omit to
state a material fact required to be
stated therein or necessary to make the
statements therein, in light of the
circumstances under which they were made,
not misleading; provided, however,
that the Company makes no warranty or
representation with respect to any
statement contained in the Registration
Statement or the Prospectus in reliance
upon and in conformity with information
concerning a Placement Agent and
furnished in writing by or on behalf of
such Placement Agent to the Company
expressly for use in the Registration
Statement or the Prospectus, including
without limitation the information
referenced in Section 9 of this Agreement;
the documents incorporated by reference in
the Basic Prospectus, the Prospectus
Supplement, the Registration Statement and
the Prospectus, at the time such
documents were filed with the Commission,
complied in all material respects with
the requirements of the Exchange Act and
did not contain an untrue statement of
a material fact or omit to state a material
fact required to be stated therein
or necessary to make the statements
therein, in light of the circumstances under
which they were made, not misleading; and
the Company has not distributed and
will not distribute any offering material
in connection with the offering or
sale of the Units other than the
Registration Statement and the Prospectus;
(b) as of the date of this Agreement, the Company has an
authorized
and outstanding capitalization as set forth
in the Registration Statement and
the Prospectus and, as of the time of
purchase, the Company shall have an
authorized and outstanding capitalization
as set forth in the Registration
Statement and the Prospectus (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 Prospectus and grant of
options under existing stock option plans
described in the Registration
Statement and the Prospectus); all of the
issued and outstanding shares of
capital stock, including the Common Stock,
of the Company have been duly
authorized and validly issued and are fully
paid and non-assessable, have been
issued in compliance in all material
respects with all federal and state
securities laws and were not issued by the
Company in violation of any
preemptive right, right of first refusal or
similar right to which the Company
was then subject;
(c) the Company has been duly incorporated and is validly
existing
as a corporation in good standing under the
laws of the State of Delaware, with
full corporate power and authority to own,
lease and operate its properties and
conduct its business as described in the
Registration Statement and the
Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver
the Shares and the Warrants as contemplated
herein;
(d) the Company is duly qualified to do business as a foreign
corporation and is in good standing in each
jurisdiction where the ownership or
leasing of its properties or the conduct
of
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its business requires such qualification,
except where the failure to be so
qualified and in good standing would not,
individually or in the aggregate, have
a material adverse effect on the business,
properties, financial condition,
results of operation or prospects of the
Company taken as a whole (a "Material
Adverse Effect");
(e) the Company has no subsidiaries (as defined in the Act);
the
Company does not own, directly or
indirectly, any shares of stock or any other
equity or long-term debt securities of any
corporation or have any equity
interest in any firm, partnership, joint
venture, association or other entity;
and complete and correct copies of the
certificate of incorporation and the
bylaws of the Company and all amendments
thereto have been delivered to the
Placement Agents, and no changes therein
will be made subsequent to the date
hereof and prior to the time of
purchase;
(f) the Shares and the Warrants have been duly and validly
authorized and, when issued and delivered
against payment therefor as provided
herein, will be duly and validly issued,
fully paid and non-assessable; the
Warrant Shares have been duly and validly
authorized and, when issued and
delivered against payment of the exercise
price as provided in the Warrants,
will be duly and validly issued and fully
paid; and the issuance by the Company
of the Shares, the Warrants and the Warrant
Shares will not be subject to any
statutory or contractual preemptive rights,
rights of first refusal or similar
rights to which the Company is then
subject;
(g) the capital stock of the Company, including the Shares, the
Warrants and the Warrant Shares, conforms
in all material respects to the
description thereof contained in the
Registration Statement and the Prospectus,
and the certificates for the Shares are in
due and proper form;
(h) this Agreement has been duly authorized, executed and
delivered
by the Company;
(i) the Company is not in breach or violation of or in default
under
(nor has any event occurred which with
notice, lapse of time or both would
result in any breach or violation of,
constitute a default under or create or
accelerate the right of the holder of any
indebtedness (or a person acting on
such holder's behalf) to require the
repurchase, redemption or repayment by the
Company of all or a part of such
indebtedness under) the Company's certificate
of incorporation or bylaws, or any
indenture, mortgage, deed of trust, bank loan
or credit agreement or other evidence of
indebtedness, or any license, lease,
contract or other agreement or instrument
to which the Company is a party or by
which the Company or any of its properties
may be bound, except for any breach,
violation, default, creation or
acceleration that would not have a Material
Adverse Effect, and the execution, delivery
and performance of this Agreement,
the issuance and sale of the Shares and the
consummation of the transactions
contemplated hereby will not conflict with,
result in any breach or violation of
or constitute a default under (nor
constitute any event which with notice, lapse
of time or both would result in any breach
or violation of or constitute a
default under or create or accelerate the
right of the holder of any
indebtedness (or a person acting on such
holder's behalf) to require the
repurchase, redemption or repayment of all
or a part of such indebtedness under)
the certificate of incorporation or bylaws
of the Company, or any indenture,
mortgage, deed of trust, bank loan or
credit agreement or other evidence of
indebtedness, or any license, lease,
contract or other agreement
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or instrument to which the Company is a
party or by which the Company or any of
its properties may be bound, or any
federal, state, local or foreign law,
regulation or rule or any decree, judgment
or order applicable to the Company,
except for any conflict, breach, violation,
default, creation or acceleration
that would not have a Material Adverse
Effect;
(j) no approval, authorization, consent or order of or filing
with
any federal, state, local or foreign
governmental or regulatory commission,
board, body, authority or agency or of or
with the American Stock Exchange, or
approval of the shareholders of the
Company, is required in connection with the
issuance and sale of the Shares or the
Warrants or the consummation by the
Company of the transactions contemplated
hereby other than registration under
the Act of the offer and sale of the
Shares, the Warrants and the Warrant
Shares, which has been effected, and any
necessary qualification under the
securities or blue sky laws of the various
jurisdictions in which the Shares are
being offered, under the terms of this
Agreement, under the rules and
regulations of the NASD, or under the rules
and regulations of the American
Stock Exchange;
(k) (i) no person has the right, contractual or otherwise, to
cause
the Company to issue or sell to it any
shares of Common Stock or shares of any
other capital stock or other equity
interests of the Company, (ii) no person has
any preemptive rights, resale rights,
rights of first refusal or other rights to
purchase any shares of Common Stock or
shares of any other capital stock or
other securities of the Company, and (iii)
except as provided herein, no person
has the right to act as an underwriter,
placement agent or financial advisor to
the Company in connection with and as a
result of the offer and sale of the
Shares and the Warrants, in the case of
each of the foregoing clauses (i), (ii)
and (iii), whether as a result of the
filing or effectiveness of the
Registration Statement or the sale of the
Shares or the Warrants as contemplated
thereby or otherwise; no person has the
right, contractual or otherwise, to
cause the Company to register under the Act
any shares of Common Stock or shares
of any other capital stock or other
securities of the Company, or to include any
such shares or interests in the
Registration Statement or the offering
contemplated thereby, whether as a result
of the filing or effectiveness of the
Registration Statement or the sale of the
Shares or the Warrants as contemplated
thereby or otherwise;
(l) the Company has all necessary licenses, authorizations,
consents
and approvals and has made all necessary
filings required under any federal,
state, local or foreign law, regulation or
rule, and has obtained all necessary
authorizations, consents and approvals from
other persons, in order to conduct
its business as described in the
Registration Statement or the Prospectus,
except where the failure to have such
licenses, authorizations, consents or
approvals or to make such filings would
not, individually or in the aggregate,
have a Material Adverse Effect; the Company
is not in violation of, or in
default under, and has not received notice
of any proceedings relating to
revocation or modification of, any such
license, authorization, consent or
approval or any federal, state, local or
foreign law, regulation or rule or any
decree, order or judgment applicable to the
Company, except where such
violation, default, revocation or
modification would not, individually or in the
aggregate, have a Material Adverse
Effect;
(m) all legal or governmental proceedings, affiliate
transactions,
off-balance sheet transactions, contracts,
licenses, agreements, leases or
documents of a character required to be
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described in the Registration Statement or
the Prospectus or to be filed as an
exhibit to the Registration Statement have
been so described or filed as
required;
(n) there are no actions, suits, claims, investigations or
proceedings pending or, to the Company's
knowledge, threatened to which the
Company or, to the Company's knowledge, any
of the Company's directors or
officers is or would be a party, or of
which any of the Company's properties is
or would be subject at law or in equity,
before or by any federal, state, local
or foreign governmental or regulatory
commission, board, body, authority or
agency, except any such action, suit,
claim, investigation or proceeding which
would not result in a judgment, decree or
order having, individually or in the
aggregate, a Material Adverse Effect or
prevent consummation of the transactions
contemplated hereby;
(o) To the knowledge of the Company, Ernst & Young LLP, whose
report
on the consolidated financial statements of
the Company is filed with the
Commission as part of the Registration
Statement and the Prospectus, are
independent public accountants with respect
to the Company as required by the
Act;
(p) the audited financial statements included or incorporated
by
reference in the Registration Statement and
the Prospectus, together with the
related notes and schedules, present fairly
in all material respects the
consolidated financial position of the
Company as of the dates indicated and the
consolidated results of operations and cash
flows of the Company for the periods
specified and comply in all material
respects with the requirements of the Act
and have been prepared in conformity with
generally accepted accounting
principles applied on a consistent basis
during the periods involved except as
otherwise stated therein; the other
financial and statistical data set forth in
the Registration Statement and the
Prospectus are fairly presented and prepared
on a basis consistent with the financial
statements and books and records of the
Company; there are no financial statements
(historical or pro forma) that are
required to be included in the Registration
Statement and the Prospectus that
are not included as required; and the
Company does not have any material
liabilities or obligations, direct or
contingent (including any off-balance
sheet obligations), required to be
disclosed in the Registration Statement and
the Prospectus that are not so
disclosed;
(q) except as set forth in or as otherwise contemplated by the
Registration Statement or the Prospectus,
subsequent to the respective dates as
of which information is given in the
Registration Statement and the Prospectus,
there has not been (i) any material adverse
change, or any development that
would reasonably be expected to result in a
material adverse change, in the
business, properties, management, financial
condition or results of operations
of the Company taken as a whole, (ii) any
transaction which is material to the
Company taken as a whole, (iii) any
obligation, direct or contingent (including
any off-balance sheet obligations),
incurred by the Company outside the ordinary
course of business, which is material to
the Company taken as a whole, (iv) any
change in the capital stock (other than the
issuance of shares of Common Stock
upon exercise of stock options and warrants
disclosed as outstanding in the
Registration Statement and the Prospectus
and the grant of options under
existing stock option plans described in
the Registration Statement and the
Prospectus) or outstanding indebtedness of
the Company other than the repayment
of the amounts due under certain 9%
Convertible Subordinated Notes Payable or
(v) any dividend or distribution of any
kind declared, paid or made on the
capital stock of the Company other than
dividends accruing on the Series A
Convertible Preferred Stock of the
Company;
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(r) the Company is not, and after giving effect to the offering
and
sale of the Shares, the Warrants and the
Warrant Shares 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
"Investment Company Act");
(s) the Company has good and marketable title to all property
(real
and personal) described in the Registration
Statement and in the Prospectus as
being owned by the Company, free and clear
of all liens, claims, security
interests or other encumbrances, except for
those liens, claims, security
interests and other encumbrances that do
not materially interfere with the use
made or proposed to be made of such
property by the Company or that would not
have a Material Adverse Effect; all the
property described in the Registration
Statement and the Prospectus as being held
under lease by the Company or a
Subsidiary is held thereby under valid,
subsisting and enforceable leases except
where the failure to be valid, subsisting
or enforceable would not have a
Material Adverse Effect;
(t) the Company owns or has the right to use the inventions,
patent
applications, patents, trademarks (both
registered and unregistered), trade
names, copyrights, trade secrets and other
proprietary information described in
the Registration Statement and the
Prospectus as being owned or licensed by them
or which are necessary for the conduct of
their respective businesses, except
where the failure to own, license or have
such rights would not, individually or
in the aggregate, have a Material Adverse
Effect (collectively, "Intellectual
Property"); to the Company's knowledge
there are no third parties who have
rights to any Intellectual Property that
would materially impair the Company's
rights in any Intellectual Property, except
for the ownership rights of the
owners of the Intellectual Property which
is licensed to the Company; to the
Company's knowledge, there is no
infringement by third parties of any
Intellectual Property; there is no pending
action, suit, proceeding or, to the
Company's knowledge, threatened claim by
others challenging the Company's rights
in or to any Intellectual Property that
would, individually or in the aggregate,
have a Material Adverse Effect; there is no
pending action, suit, proceeding or,
to the Company's knowledge, threatened
claim by others challenging the validity
or scope of any Intellectual Property that
would, individually or in the
aggregate, have a Material Adverse Effect;
there is no pending action, suit,
proceeding or, to the Company's knowledge,
threatened claim by others that the
Company infringes or otherwise violates any
patent, trademark, copyright, trade
secret or other proprietary rights of
others; to the Company's knowledge, except
as described in the Registration Statement
or the Prospectus, there is no patent
or patent application that contains claims
that interfere with the issued or
pending claims of any of the Intellectual
Property that would, individually or
in the aggregate, have a Material Adverse
Effect; and to the Company's
knowledge, there is no prior art that may
render any patent application owned by
the Company of the Intellectual Property
unpatentable that the Company is
required to disclose to the U.S. Patent and
Trademark Office that has not been
disclosed that would, individually or in
the aggregate, have a Material Adverse
Effect;
(u) the Company is not engaged in any unfair labor practice;
except
for matters which would not, individually
or in the aggregate, have a Material
Adverse Effect, (i) there is (A) no unfair
labor practice complaint pending or,
to the Company's knowledge, threatened
against the
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Company before the National Labor Relations
Board, and no grievance or
arbitration proceeding arising out of or
under collective bargaining agreements
is pending or threatened, (B) no strike,
labor dispute, slowdown or stoppage
pending or, to the Company's knowledge,
threatened against the Company and (C)
no union representation dispute currently
existing concerning the employees of
the Company, and (ii) to the Company's
knowledge, (A) no union organizing
activities are currently taking place
concerning the employees of the Company
and (B) the Company has not violated any
federal, state, local or foreign law
relating to discrimination in the hiring,
promotion or pay of employees, any
applicable wage or hour laws or any
provision of the Employee Retirement Income
Security Act of 1974 ("ERISA") or the rules
and regulations promulgated
thereunder concerning the employees of the
Company;
(v) the Company and its properties, assets and operations are
in
compliance with, and the Company holds all
permits, authorizations and approvals
required under, Environmental Laws (as
defined below), except to the extent that
failure to so comply or to hold such
permits, authorizations or approvals would
not, individually or in the aggregate, have
a Material Adverse Effect; to the
Company's knowledge, there are no past or
present events, conditions,
circumstances, activities, practices,
actions, omissions or plans that would
reasonably be expected to give rise to any
costs or liabilities to the Company
under, or to interfere with or prevent
compliance by the Company with,
Environmental Laws that would have a
Material Adverse Effect; the Company (i) is
not, to the Company's knowledge, the
subject of any investigation, (ii) has not
received any notice or claim, (iii) is not
a party to any pending or, to the
Company's knowledge, threatened action,
suit or proceeding, (iv) is not bound by
any judgment, decree or order and (v) has
not entered into any agreement, in
each case relating to any alleged violation
of any Environmental Law or any
actual or alleged release or threatened
release or cleanup at any location of
any Hazardous Materials (as defined below)
(as used herein, "Environmental Law"
means any federal, state, local or foreign
law, statute, ordinance, rule,
regulation, order, decree, judgment,
injunction, permit, license, authorization
or other binding requirement, or common
law, relating to health, safety or the
protection, cleanup or restoration of the
environment or natural resources,
including those relating to the
distribution, processing, generation, treatment,
storage, disposal, transportation, other
handling or release or threatened
release of Hazardous Materials, and
"Hazardous Materials" means any material
(including, without limitation, pollutants,
contaminants, hazardous or toxic
substances or wastes) that is regulated by
or may give rise to liability under
any Environmental Law), except as would
not, individually or in the aggregate,
have a Material Adverse Effect;
(w) in the ordinary course of its business, the Company conducts
a
periodic review of the effect of the
Environmental Laws on its business,
operations and properties, in the course of
which it seeks to identify and
evaluate associated costs and liabilities
(including, without limitation, any
capital or operating expenditures required
for cleanup, closure of properties or
compliance with the Environmental Laws or
any permit, license or approval, any
related constraints on operating activities
and any potential liabilities to
third parties);
(x) all material tax returns required to be filed by the
Company
have been filed, and all taxes and other
assessments of a similar nature
(whether imposed directly or through
withholding) including any interest,
additions to tax or penalties applicable
thereto due or claimed to
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<PAGE>
be due from such entities have been paid,
other than those being contested in
good faith and for which adequate reserves
have been provided;
(y) the Company maintains insurance covering its properties,
operations, personnel and businesses as the
Company deems adequate; such
insurance insures against such losses and
risks to an extent which is customary
for companies of similar size and of
similar stages of product development in
similar industries; all such insurance is
fully in force on the date hereof and
will be fully in force at the time of
