EXHIBIT 1.1
2,570,000 Shares
CYTOGEN CORPORATION
Common Stock
PLACEMENT AGENCY
AGREEMENT
April 14, 2004
CIBC World Markets Corp.
JMP Securities LLC
ThinkEquity Partners LLC
As Placement Agents
c/o CIBC World Markets
Corp.
417 5 th Avenue, 2 nd Floor
New York, New York 10016
Ladies and Gentlemen:
Cytogen Corporation, a Delaware
corporation (the “Company”), proposes, subject to the
terms and conditions contained herein, to issue and sell shares
(the “Shares”) of common stock, $0.01 par value per
share (the “Common Stock”), directly to certain
investors (collectively, the “Investors”). The Company
desires to engage you as its placement agents (the “Placement
Agents”) in connection with such issuance and sale. The
Shares are more fully described in the Registration Statement (as
hereinafter defined).
The Company has prepared and filed
in conformity with the requirements of the Securities Act of 1933,
as amended (the “Securities Act”), and the published
rules and regulations thereunder (the “Rules”) adopted
by the Securities and Exchange Commission (the
“Commission”) a Registration Statement (as hereinafter
defined) on Form S-3 (No. 333-110040), including a base prospectus
relating to the Shares (the “Base Prospectus”) and such
amendments thereof as may have been required to the date of this
Agreement. Copies of such Registration Statement (including all
amendments thereof) and of the related Base Prospectus (as
hereinafter defined) have heretofore been delivered by the Company
to you. The term “Registration Statement” as used in
this Agreement means the initial registration statement (including
all exhibits, financial schedules and all documents and information
deemed to be a part of the Registration Statement through
incorporation by reference or otherwise)), as amended at the
time
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and on the date it becomes effective (the
“Effective Date”), including the information (if any)
contained in the form of final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and deemed to be part thereof
at the time of effectiveness pursuant to Rule 430A of the Rules. If
the Company has filed an abbreviated registration statement to
register additional Shares 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. The prospectus
supplement relating to the Shares as filed with the Commission
pursuant to and in accordance with Rule 424(b) under the Securities
Act is hereinafter referred to as the “Prospectus
Supplement.” The term “Prospectus” as used in
this Agreement means the Base Prospectus together with the
Prospectus Supplement. As used herein, the terms “Base
Prospectus,” “Prospectus,” “Registration
Statement,” “Rule 462 Registration Statement,”
and “Prospectus Supplement” shall include any documents
incorporated by reference therein and any reference to any
amendment or supplement to the Registration Statement or the
Prospectus shall be deemed to refer to and include any document
filed under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), after the date of the Base Prospectus
by the Company with the Commission, that are deemed to be
incorporated by reference in the Prospectus.
The Company hereby confirms that the
Placement Agents, in connection with their duties in such capacity,
are authorized to distribute or cause to be distributed the
Prospectus (as from time to time amended or supplemented if the
Company furnishes amendments or supplements thereto to the
Placement Agents).
1. Agreement to Act as Placement
Agent, Delivery and Payment . On the basis of the
representations, warranties and agreements contained in, and
subject to the terms and conditions of, this Agreement:
(a) The Placement Agents agree to
act as the Company’s exclusive placement agents in connection
with the issuance and sale, on a reasonable efforts basis, by the
Company of the Shares to the Investors. The Company acknowledges
and agrees that the Placement Agents’ engagement hereunder is
not an agreement by the Placement Agents or any of their affiliates
to underwrite or purchase any securities or otherwise provide any
financing. As compensation for their services hereunder, the
Company agrees to pay on the Closing Date (as defined below) the
Placement Agents by wire transfer of immediately available funds
6.5% of the proceeds received by the Company from the sale of the
Shares.
(b) Payment of the purchase price
for, and delivery of the Shares shall be made at a closing (the
“Closing”) at the offices of Skadden, Arps, Slate,
Meagher & Flom LLP, at 9:00 a.m., New York time, on the Closing
Date to take place on the third or fourth business day (as
permitted under Rule 15c6-1 under the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) after the
determination of the sales price of the Shares (such time and date
of payment and delivery being herein called the “Closing
Date”). All actions taken at the Closing shall be deemed to
have occurred simultaneously.
(c) Payment of the purchase price
for the Shares shall be made by the Investors directly to or upon
the order of the Company by wire transfer in immediately
available
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funds to the Company, upon delivery
of the Shares through the facilities of The Depository Trust
Company, to the Investors, and shall be registered in such name or
names and shall be in such denominations, as the Investors may
request at least one business day before the Closing
Date.
(d) The several purchases of the
Shares by the Investors shall be evidenced by the execution of one
or more purchase agreements each substantially in the form attached
hereto as Exhibit A (the “Purchase
Agreement”).
(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 consent of the
Placement Agents, solicit or accept offers to purchase Shares
(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 Agents.
2. Representations and Warranties
of the Company . The Company represents and warrants to each
Placement Agent as of the date hereof, and as of the Closing Date,
as follows:
(a) The Company meets the
requirements for use of Form S-3 under the Securities Act. On the
Effective Date, the Registration Statement complied, and on the
date of the Prospectus, the date any post-effective amendment to
the Registration Statement becomes effective, the date any
supplement or amendment to the Prospectus is filed with the
Commission and the Closing Date, the Registration Statement and the
Prospectus (and any amendment thereof or supplement thereto) will
comply, in all material respects, with the requirements of the
Securities Act and the Rules and the Exchange Act and the rules and
regulations of the Commission thereunder. The Registration
Statement did not, as of the Effective 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 not misleading; and on the Effective Date and
the other dates referred to above neither the Registration
Statement nor the Prospectus, nor any amendment thereof or
supplement thereto, will contain any untrue statement of a material
fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. If applicable, when any related preliminary prospectus
was first filed with the Commission (whether filed as part of the
Registration Statement or any amendment thereto or pursuant to Rule
424(a) of the Rules) and when any amendment thereof or supplement
thereto was first filed with the Commission, such preliminary
prospectus as amended or supplemented complied in all material
respects with the applicable provisions of the Securities Act and
the Rules 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 not
misleading. If applicable, each preliminary prospectus and the
Prospectus delivered to the Placement Agents for use in connection
with this offering was identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T. If Rule 434 is used, the
Company will comply with the requirements of Rule 434 and the
Prospectus shall not be “materially different,” as such
term is used in Rule 434, from the Prospectus included in
the
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Registration Statement at the time
it became effective. Notwithstanding the foregoing, none of the
representations and warranties in this paragraph 2(a) shall apply
to statements in, or omissions from, the Registration Statement or
the Prospectus made in reliance upon, and in conformity with,
information herein or otherwise furnished in writing by the
Placement Agents for use in the Registration Statement or the
Prospectus.
(b) The Registration Statement is
effective under the Securities Act, and no stop order preventing or
suspending the effectiveness of the Registration Statement or
suspending or preventing the use of the Prospectus has been issued
by the Commission and no proceedings for that purpose have been
instituted or are threatened under the Securities Act. Any required
filing of the Prospectus and any supplement thereto pursuant to
Rule 424(b) of the Rules has been or will be made in the manner and
within the time period required by such Rule 424(b).
(c) The documents incorporated by
reference in the Registration Statement and the Prospectus, at the
time they became effective or were filed with the Commission, as
the case may be, complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder, and at the time they became effective or were filed
with the Commission, as the case may be, none of such documents
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and any
further documents so filed and incorporated by reference in the
Registration Statement and the Prospectus, when such documents
become effective or are filed with the Commission, as the case may
be, will conform in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder and will not
contain 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 are made, not misleading.
(d) The financial statements of the
Company (including all notes and schedules thereto) included or
incorporated by reference in the Registration Statement and
Prospectus present fairly the financial position of the Company and
its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders’ equity and cash flows
of the Company and its consolidated subsidiaries for the periods
specified; and such financial statements and related schedules and
notes thereto, and the unaudited financial information filed with
the Commission as part of the Registration Statement, have been
prepared in conformity with generally accepted accounting
principles, consistently applied throughout the periods involved.
The selected financial data included in the Prospectus present
fairly the information shown therein as at the respective dates and
for the respective periods specified and have been presented on a
basis consistent with the consolidated financial statements set
forth in the Prospectus and other financial information.
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(e) KPMG LLP, whose reports are
filed with the Commission as a part of the Registration Statement,
are and, during the periods covered by their reports, were
independent public accountants as required by the Securities Act
and the Rules.
(f) The Company, each of its
subsidiaries, PSMA Development Company LLC (“PSMA Development
Co.”), and each entity (corporation, partnership, joint
venture, association or other business organization) controlled
directly or indirectly by the Company, is duly organized, validly
existing and in good standing under the laws of their respective
jurisdictions of incorporation or organization. The Company, its
subsidiaries and PSMA Development Co. each is duly qualified to do
business and is in good standing as a foreign entity in each
jurisdiction in which the nature of the business conducted by it or
location of the assets or properties owned, leased or licensed by
it requires such qualification, except for such jurisdictions where
the failure to so qualify individually or in the aggregate would
not have a material adverse effect on the assets, properties,
condition, financial or otherwise, or in the results of operations,
business affairs or business prospects of the Company, its
subsidiaries and PSMA Development Co. considered as a whole (a
“Material Adverse Effect”); and to the Company’s
knowledge, no proceeding has been instituted in any such
jurisdiction revoking, limiting or curtailing, or seeking to
revoke, limit or curtail, such power and authority or
qualification. The Company does not own, lease or license any asset
or property or conduct any business outside the United States of
America.
(g) The Company, its subsidiaries
and PSMA Development Co. each has all requisite corporate power and
authority, and all necessary authorizations, approvals, consents,
orders, licenses, certificates and permits of and from all
governmental or regulatory bodies or any other person or entity
(collectively, the “Permits”), to own, lease and
license its assets and properties and conduct its business, all of
which are valid and in full force and effect, except where the lack
of such Permits, individually or in the aggregate, would not have a
Material Adverse Effect. The Company, its subsidiaries and PSMA
Development Co. each has fulfilled and performed in all material
respects all of its material obligations with respect to such
Permits and no event has occurred that allows, or after notice or
lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the
Company thereunder. Except as may be required under the Securities
Act and state and foreign Blue Sky laws, no other Permits are
required to enter into, deliver and perform this Agreement and each
Purchase Agreement and to issue and sell the Shares.
(h) The Company, its subsidiaries
and PSMA Development Co. each owns or possesses adequate patents,
patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual
property (collectively, “ Intellectual Property
”) necessary to carry on the business now operated by them.
Except as disclosed in the Prospectus, there is no litigation or
other proceeding pending or, to the Company’s knowledge,
threatened and no claims are presently being asserted by any third
party challenging or questioning the ownership, validity,
enforceability of the Company’s, its subsidiaries’ or
PSMA Development Co.’s right to use or own any Intellectual
Property or asserting that the use
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of any Intellectual Property by the
Company, its subsidiaries or PSMA Development Co. or the operation
of the business of the Company, its subsidiaries or PSMA
Development Co. infringes upon or misappropriates the Intellectual
Property of any third party, other than infringements which would
not be reasonably likely to have a Material Adverse Effect, and the
Company is not otherwise aware of any infringement of or conflict
with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest
of the Company, its subsidiaries or PSMA Development Co. therein,
and which infringement or conflict (if the subject of any
unfavorable decision, ruling or finding) or invalidity or
inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(i) The Company, its subsidiaries
and PSMA Development Co. each has good and marketable title in fee
simple to all real property, and good and marketable title to all
other property owned by it, in each case free and clear of all
liens, encumbrances, claims, security interests and defects, except
such as do not materially affect the value of such property and do
not materially interfere with the use made or proposed to be made
of such property by the Company, its subsidiaries and PSMA
Development Co. All property held under lease by the Company, its
subsidiaries and PSMA Development Co. is held by them under valid,
existing and enforceable leases, free and clear of all liens,
encumbrances, claims, security interests and defects, except such
as are not material and do not materially interfere with the use
made or proposed to be made of such property by the Company, its
subsidiaries and PSMA Development Co. Subsequent to the respective
dates as of which information is given in the Registration
Statement and the Prospectus, (i) there has not been any Material
Adverse Effect; (ii) neither the Company, any of its subsidiaries
nor PSMA Development Co. has sustained any loss or interference
with its assets, businesses or properties (whether owned or leased)
from fire, explosion, earthquake, flood or other calamity, whether
or not covered by insurance, or from any labor dispute or any court
or legislative or other governmental action, order or decree which
would have a Material Adverse Effect; and (iii) since the date of
the latest balance sheet included or incorporated by reference in
the Registration Statement and the Prospectus, neither the Company,
its subsidiaries nor PSMA Development Co. has (A) issued any
securities or incurred any liability or obligation, direct or
contingent, for borrowed money, except such liabilities or
obligations incurred in the ordinary course of business, (B)
entered into any transaction not in the ordinary course of business
or (C) declared or paid any dividend or made any distribution on
any shares of its stock or redeemed, purchased or otherwise
acquired or agreed to redeem, purchase or otherwise acquire any
shares of its capital stock.
(j) There is no document, contract
or other agreement required to be described in the Registration
Statement or Prospectus or to be filed as an exhibit to the
Registration Statement which is not described or filed as required
by the Securities Act or Rules. Each description of a contract,
document or other agreement in the Registration Statement and the
Prospectus accurately reflects in all 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 by reference is in full force and effect
and is
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valid and enforceable by and against
the Company, its subsidiaries and PSMA Development Co., as the case
may be, in accordance with its terms. Neither the Company, any of
its subsidiaries nor PSMA Development Co., 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 have a Material Adverse Effect. No default
exists, and no event has occurred which with notice or lapse of
time or both would constitute a default, in the due performance and
observance of any term, covenant or condition, by the Company, its
subsidiaries or PSMA Development Co., of any other agreement or
instrument to which the Company, any of its subsidiaries or PSMA
Development Co. is a party or by which Company or its properties or
business or any subsidiary or PSMA Development Co. or their
respective properties or business may be bound or affected which
default or event, individually or in the aggregate, would have a
Material Adverse Effect.
(k) The statistical and market
related data included in the Prospectus are based on or derived
from sources that the Company believes to be reliable and
accurate.
(l) Neither the Company, any of its
subsidiaries nor PSMA Development Co. is in violation of any term
or provision of its charter, by-laws or limited liability company
agreement or of any franchise, license, permit, judgment, decree,
order, statute, rule or regulation, where the consequences of such
violation, individually or in the aggregate, would have a Material
Adverse Effect.
(m) Each of this Agreement and each
Purchase Agreement has been duly authorized, executed and delivered
by the Company.
(n) Neither the execution, delivery
and performance of this Agreement by the Company nor the
consummation of any of the transactions contemplated hereby
(including, without limitation, the issuance and sale by the
Company of the Shares) will give rise to a right to terminate or
accelerate the due date of any payment due under, or conflict with
or result in the breach of any term or provision 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 or imposition of any lien, charge
or encumbrance upon any properties or assets of the Company, its
subsidiaries or PSMA Development Co. pursuant to the terms of, any
indenture, mortgage, deed of trust or other agreement or instrument
to which the Company, any of its subsidiaries or PSMA Development
Co. is a party or by which either the Company, its subsidiaries or
PSMA Development Co. or any of their properties or businesses is
bound, or any franchise, license, permit, judgment, decree, order,
statute, rule or regulation applicable to the Company or any of its
subsidiaries or violate any provision of the charter or by-laws of
the Company, any of its subsidiaries or PSMA Development Co.,
except for such consents or waivers which have already been
obtained and are in full force and effect.
(o) The Company is authorized to
issue a total of 30,400,000 shares of capital stock consisting of
25,000,000 shares of Common Stock and 5,400,000 shares
of
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Preferred Stock, of which 200,000
shares have been designated Series C Junior Participating Preferred
Stock. After giving effect to the transactions contemplated by the
Purchase Agreement, on the date hereof, (i) no shares of Preferred
Stock will be issued and outstanding, (ii) 12,938,249 shares of
Common Stock will be issued and outstanding, and (iii) 550,580
shares of common stock will be reserved for issuance under the
Company’s stock option plans, of which 483,231 shares were
subject to outstanding options as of March 31, 2004. The
certificates evidencing the Shares are in due and proper legal form
and have been duly authorized for issuance by the Company. All of
the issued and outstanding shares of Common Stock have been duly
and validly issued and are fully paid and nonassessable. There are
no statutory preemptive or other similar rights to subscribe for or
to purchase or acquire any shares of Common Stock of the Company or
any of its subsidiaries or any such rights pursuant to its
Certificate of Incorporation or by-laws or any agreement or
instrument to or by which the Company or any of its subsidiaries is
a party or bound. The Shares, when delivered by the Company
pursuant to this Agreement, will be duly and validly issued, fully
paid and nonassessable and none of them will be issued in violation
of any preemptive or other similar right. Except as disclosed in
the Registration Statement and the Prospectus, there is no
outstanding option, warrant or other right calling for the issuance
of, and there is no commitment, plan or arrangement to issue, any
share of stock of the Company or any of its subsidiaries or any
security convertible into, or exercisable or exchangeable for, such
stock. The Common Stock and the Shares conform in all material
respects to all statements in relation thereto contained in the
Registration Statement and the Prospectus. All outstanding shares
of capital stock of each of the Company’s subsidiaries have
been duly authorized and validly issued, and are fully paid and
nonassessable and are owned directly by the Company or by another
wholly-owned subsidiary of the Company free and clear of any
security interests, liens, encumbrances, equities or claims, other
than those described in the Prospectus.
(p) No holder of any security of the
Company has any right, which has not been waived, to have any
security owned by such holder included in the Registration
Statement or to demand registration of any security owned by such
holder for a period of 180 days after the date of this Agreement.
Each director and executive officer of the Company listed on
Schedule I hereto has delivered to the Placement Agents his
enforceable written lock-up agreement in the form attached to this
Agreement as Exhibit B hereto (“Lock-Up
Agreement”).
(q) All necessary corporate action
has been duly and validly taken by the Company and to authorize the
execution, delivery and performance of this Agreement and each
Purchase Agreement and the issuance and sale of the Shares by the
Company. This Agreement and each Purchase Agreement has been duly
and validly authorized, executed and delivered by the Company and
constitute and will constitute legal, valid and binding obligations
of the Company enforceable against the Company in accordance with
their respective terms, 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 principles.
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(r) Neither the Company, any of its
subsidiaries nor PSMA Development Co. is involved in any labor
dispute nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a Material Adverse Effect. The
Company is not aware of any existing or imminent labor disturbance
by the employees of any of its principal suppliers or contractors
which would have a Material Adverse Effect. The Company is not
aware of any threatened or pending litigation between the Company,
its subsidiaries or PSMA Development Co. and any of its executive
officers which, if adversely determined, could have a Material
Adverse Effect and has no reason to believe that such officers will
not remain in the employment of the Company.
(s) No transaction has occurred
between or among the Company and any of its officers or directors,
shareholders or any affiliate or affiliates of any such officer or
director or shareholder that is required to be described in and is
not described in the Registration Statement and the
Prospectus.
(t) The Company has not taken, nor
will it take, directly or indirectly, any action designed to or
which might reasonably be expected 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
Common Stock or any security of the Company to facilitate the sale
or resale of any of the Shares.
(u) The Company, its subsidiaries
and PSMA Development Co. each has filed all Federal, state, local
and foreign tax returns which are required to be filed through the
date hereof, which returns are true and correct in all material
respects or has received timely extensions thereof, and has paid
all taxes shown on such returns and all assessments received by it
to the extent that the same are material and have become due. There
are no tax audits or investigations pending, which if adversely
determined would have a Material Adverse Effect; nor are there any
material proposed additional tax assessments against the Company,
any of its subsidiaries or PSMA Development Co.
(v) The Shares have been duly
authorized for quotation on the National Association of Securities
Dealers Automated Quotation (“Nasdaq”) National Market
System, subject to official notice of issuance.
(w) The Company has taken no action
designed to, or likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act or the
quotation of the Common Stock on the Nasdaq National Market, nor
has the Company received any notification that the Commission or
the Nasdaq National Market is contemplating terminating such
registration or quotation.
(x) The books, records and accounts
of the Company and its subsidiaries accurately and fairly reflect,
in reasonable detail, the transactions in, and dispositions of, the
assets of, and the results of operations of, the Company and its
subsidiaries. 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
authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in accordance
with
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generally accepted accounting
principles and to maintain asset accountability, (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 the existing assets at
reasonable intervals and appropriate action is taken with respect
to any differences; the chief executive officer and the chief
financial officer of the Company have made all certifications
required by the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”) and any related rules and
regulations promulgated by the Commission, and the statements
contained in any such certification are complete and correct; the
Company is otherwise in compliance in all material respects with
all applicable effective provisions of the Sarbanes-Oxley Act and
is actively taking steps to ensure that it will be in compliance
with other applicable provisions of the Sarbanes-Oxley Act upon the
effectiveness of such provisions.
(y) The Company has established and
maintains disclosure controls and procedures (as such term is
defined in Rule 13a-14 under the Exchange Act). Based on the
evaluation of its disclosure controls and procedures, the Company
is not aware 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.
(z) There are no material
off-balance sheet arrangements (as defined in Item 303 of
Regulation S-K) that have or are reasonably 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.
(aa) The Company’s Board of
Directors has validly appointed an audit committee whose
composition satisfies the requirements of Rule 4350(d)(2) of the
Rules of the NASD and the Board of Directors and/or the audit
committee has adopted a charter that satisfies the requirements of
Rule 4350(d)(1) of the NASD Rules. The audit committee has reviewed
the adequacy of its charter within the past twelve
months.
(bb) The Company, its subsidiaries
and PSMA Development Co. are insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are 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, any of its
subsidiaries or PSMA Development Co. or the Company’s, its
subsidiaries’ or PSMA Development Co.’s respective
businesses, assets, employees, officers and directors are in full
force and effect; the Company, its subsidiaries and PSMA
Development Co. are each in compliance with the terms of such
policies and instruments in all material respects; and neither the
Company, any subsidiary of the Company nor PSMA Development Co. has
any reason to
10
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. Neither the Company, any
of its subsidiaries nor PSMA Development Co. has been denied any
insurance coverage which it has sought or for which it has
applied.
(cc) Each approval, consent, order,
authorization, designation, declaration or filing of, by or with
any regulatory, administrative or other governmental body necessary
in connection with the execution and delivery by the Company of
this Agreement and the consummation of the transactions herein
contemplated required to be obtained or performed by the Company
(except such additional steps as may be necessary to qualify the
Shares under the state securities or Blue Sky laws) has been
obtained or made and is in full force and effect.
(dd) There are no affiliations with
the National Association of Securities Dealers, Inc. (the
“NASD”) among the Company’s officers, directors
or, to the best of the knowledge of the Company, any five percent
or greater stockholder of the Company, except as set forth in the
Registration Statement or otherwise disclosed in writing to the
Placement Agents.
(ee) (i) Each of the Company, its
subsidiaries and PSMA Development Co. 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 health or the environment (“Environmental
Law”) which are applicable to its business; (ii) neither the
Company, its subsidiaries nor PSMA Development Co. has received any
notice from any governmental authority or third party of an
asserted claim under Environmental Laws; (iii) each of the Company,
its subsidiaries and PSMA Development Co. has received all permits,
licenses or other approvals required of it under applicable
Environmental Laws to conduct its business and is in compliance
with all terms and conditions of any such permit, license or
approval; (iv) to the Company’s knowledge, no facts currently
exist that will require the Company, any of its subsidiaries or
PSMA Development Co. 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, its subsidiaries
or PSMA Development Co. has been designated as a Superfund site
pursuant to the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et.
seq.) or otherwise designated as a contaminated site under
applicable state or local law. Neither the Company, an
