EXHIBIT 10(bb)
<PAGE>
CEL-SCI CORPORATION
Up to 7,000,000 Shares of Common Stock
PLACEMENT AGENCY AGREEMENT
May 4, 2004
Wachovia Capital Markets, LLC
301 S. College Street
Charlotte, NC 28288-0630
Ladies and Gentlemen:
CEL-SCI
Corporation, a Colorado corporation (the "Company"), proposes,
subject to the terms and conditions stated
herein, to issue and sell up to
7,000,000 shares (the "Shares") of common
stock, par value $0.001 per share (the
"Common Stock"), to certain investors
(collectively, the "Investors"). The
Company desires to engage as its Placement
Agent Wachovia Capital Markets, LLC
(the "Placement Agent") in connection with
such issuance and sale. The Shares
are described more fully in the
Registration Statement (as hereinafter defined).
The
Company hereby confirms as follows its agreements with the
Placement
Agent:
1.
Agreement to Act as Placement Agent; Placement of Shares. On the
basis
of the representations, warranties and
agreements of the Company herein
contained, and the subject to all the terms
and conditions of this Agreement:
(a) The
Company hereby authorizes the Placement Agent to act as its
exclusive agent to solicit offers for the
purchase of all or part of the Shares
from the Company in connection with the
proposed offering of the Shares (the
"Offering"). So long as this Agreement
shall remain in effect, the Company shall
not, without the prior consent of the
Placement Agent, solicit or accept offers
to purchase Shares otherwise than through
the Placement Agent.
(b) The
Placement Agent agrees, as agent of the Company, to use its
commercially reasonable efforts to solicit
offers to purchase the Shares from
the Company on the terms and subject to the
conditions set forth in the Base
Prospectus (as defined below), any
Preliminary Prospectus (as defined below) and
the Final 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
Shares 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, be obligated to disclose the
identity of any potential purchaser or 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 be
obligated to purchase any Shares for
its own account and, in soliciting
purchases of Shares, the Placement Agent
shall act solely as the Company's agent and
not as principal. Notwithstanding
the foregoing and except as otherwise
provided in Section 1(c), it is understood
and agreed that the Placement Agent (or its
respective affiliates) may, solely
at its principal discretion and without any
obligation to do so, purchase Shares
as principal so long as the fact that such
Placement Agent (or its affiliate) is
a Investor is fully disclosed to the
Company and the Company approves such
purchase of Shares in accordance with
Section 1(c).
(c)
Subject to the provisions of this Section 1, offers for the
purchase
of Shares may be solicited by the Placement
Agent as agent for the Company at
such times and in such amounts as the
Placement Agent deems advisable. The
Placement Agent shall communicate to the
Company, orally or in writing, each
reasonable offer to purchase Shares
received by it as agent of the Company. The
Company shall have the sole right to accept
offers to purchase the Shares and
may reject any such offer, in whole or in
part. The Placement Agent shall have
the right, in its discretion reasonable
exercised, subject to providing prior
notice to the Company, to reject any offer
to purchase Shares received by it, in
whole or in part, and any such rejection
shall not be deemed a breach of its
agreement contained herein.
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(d) The
purchases of the Shares by the Investors shall be evidenced by
the
execution of Subscription Agreements, each
substantially in the form attached
hereto as Exhibit A, by each of the parties
hereto.
(e) As
compensation for services rendered, on the Closing Date (as
defined
below) the Company shall pay to the
Placement Agent, by wire transfer of
immediately available funds to an account
or accounts designated by the
Placement Agent, an amount equal to six
percent (6%) of the gross proceeds
received by the Company from the sale of
the Shares on the Closing Date. In
addition to the cash fees payable to the
Placement Agent hereunder, the Company
shall deliver to the Placement Agent, at
and as a condition to closing of any
Offering, warrants, substantially in the
form attached hereto as Exhibit B (the
"Offering Warrants"), pursuant to which the
Placement Agent has the right to
purchase Shares having an aggregate value
equal to two percent (2%) of the
aggregate gross proceeds raised in the
Offering. The Offering Warrants shall:
(i) have an exercise price per share equal
to one hundred twenty percent (120%)
of the five (5) day volume weighted average
price per share of the Common Stock
for the five day period immediately prior
to the Closing, subject to customary
adjustments for splits, combinations, stock
dividends and the like, which as of
April 29, 2004 such exercise price was
$1.36 per share; provided, however, that
in no event will the exercise price exceed
$2.00 per share, (ii) have a term of
five years and be non-cancellable, (iii)
upon exercise provide for the same
rights and privileges as the Shares issued
in the Offering and (iv) provide for
a "net issuance" exercise feature and
standard anti-dilution protections.
(f) No
Shares 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 Shares shall have been
delivered to the Investor thereof
against payment by such Investor. If the
Company shall default in its
obligations to deliver Shares to a Investor
whose offer it has accepted, the
Company shall indemnify and hold the
Placement Agent harmless against any loss,
claim or damage arising from or as a result
of such default by the Company.
Certificates evidencing the Shares, if requested by the Placement
Agent,
shall be in definitive form and shall be
registered in such names and in such
denominations as the Placement Agent shall
request by written notice to the
Company. In the absence of any request, the
Shares shall be delivered in
electronic form.
2.
Delivery and Payment. Delivery of and payment for the Shares shall
be
made at such time on such date as mutually
agreed upon by the Placement Agent
and the Company (such date and time of
delivery and payment for the Shares being
herein called the "Closing Date"). Delivery
of the Shares shall be made to the
Investors against payment therefor of the
respective aggregate purchase prices
of the Shares being sold by the Company by
wire transfer payable in same-day
funds to the accounts specified by the
Company. Delivery of the Shares shall be
made through the facilities of The
Depository Trust Company unless the Placement
Agent shall otherwise instruct.
3.
Representations and Warranties of the Company. The Company
represents
and warrants to the Placement Agent
that:
(a)
Registration Statement. The Company has filed with the Securities
and
Exchange Commission (the "Commission") a
"shelf" registration statement on Form
S-3 (Registration No. 333-111357), which
has become effective, relating to the
Shares, under the Securities Act of 1933,
as amended (the "Act"), and the rules
and regulations (collectively referred to
as the "Rules and Regulations") of the
Commission promulgated thereunder. The
registration statement, as amended at the
time it became effective, including the
exhibits and information (if any) deemed
to be part of the registration statement at
the time of effectiveness pursuant
to Rule 430A or Rule 434(d) under the Act,
is hereinafter referred to as the
"Registration Statement." No stop order
suspending the effectiveness of the
Registration Statement has been issued and,
to the Company's knowledge, no
proceeding for that purpose has been
initiated or threatened by the Commission.
The Company proposes to file the Final
Prospectus (as defined below) with the
Commission pursuant to Rule 424(b) of the
Rules and Regulations. The Final
Prospectus, in the form in which it is to
be filed with the Commission pursuant
to Rule 424(b) of the Rules and
Regulations, and which shall be deemed to
include, the Prospectus in the form
included as part of the Registration
Statement at the time the Registration
Statement became effective (the "Base
Prospectus"), is hereinafter referred to as
the "Final Prospectus," except that
if any revised prospectus or prospectus
supplement shall be provided to the
Placement Agent by the Company for use in
connection with the offering and sale
of the Shares which differs from the Final
Prospectus (whether or not such
revised prospectus or prospectus supplement
is required to be filed by the
Company pursuant to Rule 424(b) of the
Rules and Regulations), the term "Final
Prospectus" shall be deemed to include such
revised prospectus or prospectus
<PAGE>
supplement, as the case may be, from and
after the time it is first provided to
the Placement Agent for such use. Any
preliminary prospectus or prospectus
subject to completion included in the
Registration Statement or filed with the
Commission pursuant to Rule 424 under the
Act is hereafter called a "Preliminary
Prospectus." Any reference herein to the
Registration Statement, the Base
Prospectus, any Preliminary Prospectus or
the Final Prospectus shall be deemed
to refer to and include the documents
incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed
under the Securities Exchange Act of
1934, as amended (the "Exchange Act") on or
before the last to occur of the
effective date of the Registration
Statement, the date of the Preliminary
Prospectus, or the date of the Final
Prospectus, and any reference herein to the
terms "amend," "amendment" or "supplement"
with respect to the Registration
Statement, the Base Prospectus any
Preliminary Prospectus or the Final
Prospectus shall be deemed to refer to and
include (i) the filing of any
document under the Exchange Act after the
effective date of the Registration
Statement, the date of such Preliminary
Prospectus or the date of the Final
Prospectus, as the case may be, and on or
before the Closing Date, which is
incorporated therein by reference and (ii)
any such document so filed.
(b)
Registration Statement and Final Prospectus. When the
Registration
Statement became effective, upon the filing
or first delivery to the Investors
of the Final Prospectus, as of the date
hereof, and at the Closing Date, the
Registration Statement (and any
post-effective amendment thereto) and the Final
Prospectus (as amended or as supplemented
if the Company shall have filed with
the Commission any amendment or supplement
to the Registration Statement or the
Prospectus), complied and will comply in
all material respects with the Act and
the Rules and Regulations, and did not and
will not contain any untrue statement
of a material fact or omit to state any
material fact required to be stated
therein or necessary to make the statements
therein (in the light of the
circumstances under which they were made,
in the case of the Final Prospectus)
not misleading, and each Preliminary
Prospectus, as of the date filed with the
Commission, did not include any untrue
statement of a material fact or omit to
state any material fact required to be
stated therein or necessary to make the
statements therein, in the light of the
circumstances under which they were
made, not misleading; except that no
representation or warranty is made in this
Section 3(b) with respect to statements or
omissions made in reliance upon and
in conformity with written information
furnished to the Company by any of the
Placement Agent expressly for inclusion in
any Preliminary Prospectus, the
Registration Statement, or the Final
Prospectus, or any amendment or supplement
thereto, as stated in Section 7(b) hereof.
The Company has not distributed and
will not distribute any offering material
in connection with the offering and
sale of the Shares, other than the
Registration Statement, the Preliminary
Prospectus and the Final Prospectus.
(c)
Financial Statements. The consolidated financial statements and
the
related notes thereto included or
incorporated by reference in the Registration
Statement and the Final Prospectus comply
in all material respects with the
applicable requirements of the Act and the
Exchange Act, as applicable, and
present fairly, in all material respects
the financial position of the Company
and its Subsidiaries as of the dates
indicated and the results of their
operations and the changes in their
consolidated cash flows for the periods
specified; such financial statements have
been prepared in conformity with
generally accepted accounting principles
applied on a consistent basis
throughout the periods covered thereby
(except as otherwise stated therein and
subject, in the case of unaudited financial
statements, to the absence of
footnotes and normal year end adjustments),
and the other financial information
included or incorporated by reference in
the Registration Statement and the
Final Prospectus has been derived from the
accounting records of the Company and
its Subsidiaries and presents fairly the
information shown thereby.
(d) No
Material Adverse Change. Except as set forth in or otherwise
contemplated by the Registration Statement
(exclusive of any amendment thereof)
or the Final Prospectus (exclusive of any
supplement thereto), since the date of
the most recent financial statements of the
Company included or incorporated by
reference in the Registration Statement and
the Final Prospectus and prior to
Closing, (i) there has not been any change
in the capital stock of the Company
(except for changes in the number of
outstanding shares of Common Shares of the
Company due to the issuance of shares upon
the exercise or conversion of
securities exercisable for, or convertible
into, shares of Common Stock
outstanding on the date hereof) or
long-term debt of the Company or of its
Subsidiaries or any dividend or
distribution of any kind declared, set aside for
payment, paid or made by the Company on any
class of capital stock, or any
material adverse change, or any development
that would reasonably be expected to
result in a material adverse change, in or
affecting the business, properties,
management, consolidated financial
position, stockholders' equity, or results of
operations of the Company and its
Subsidiaries taken as a whole (a "Material
Adverse Change"); (ii) neither the Company
nor its Subsidiaries have entered
into any transaction or agreement, not in
the ordinary course of business, that
is material to the Company and its
Subsidiaries taken as a whole or incurred or
<PAGE>
will incur any liability or obligation,
direct or contingent, not in the
ordinary course of business, that is
material to the Company and its
Subsidiaries taken as a whole; and (iii)
neither the Company nor its
Subsidiaries have sustained any material
loss or interference with its business
from fire, explosion, flood or other
calamity, whether or not covered by
insurance, or from any labor disturbance or
dispute or any action, order or
decree of any court or arbitrator or
governmental or regulatory authority,
except in each case as otherwise disclosed
in the Registration Statement and the
Prospectus.
(e)
Organization. The Company and its Subsidiaries are, and at the
Closing
Date will be, duly organized, validly
existing as a corporation and in good
standing under the laws of their respective
jurisdictions of organization. The
Company and its Subsidiaries are, and will
be at the Closing Date, duly
qualified as a foreign corporation for
transaction of business and in good
standing under the laws of each other
jurisdiction in which their respective
ownership or lease of property or the
conduct of their respective businesses
requires such qualification, and have, and
at the Closing Date will have, all
corporate power and authority necessary to
own or hold their respective
properties and to conduct their respective
businesses as described in the
Registration Statement and the Final
Prospectus, except where the failure to be
so qualified or in good standing or have
such power or authority would not,
individually or in the aggregate, have a
material adverse effect or would
reasonably be expected to have a material
adverse effect on or affecting the
business, properties, management,
consolidated financial position, stockholders'
equity or results of operations of the
Company and its Subsidiaries taken as a
whole (a "Material Adverse Effect").
(f)
Capitalization. The issued and outstanding shares of capital stock
of
the Company have been validly issued, are
fully paid and nonassessable and,
other than as disclosed in or contemplated
by the Registration Statement or the
Final Prospectus, are not subject to any
preemptive or similar rights. The
Company has an authorized, issued and
outstanding capitalization as set forth in
the Registration Statement and the Final
Prospectus as of the dates referred to
therein (other than the grant of additional
options under the Company's existing
stock option plans, or changes in the
number of outstanding shares of Common
Stock of the Company due to the issuance of
shares upon the exercise or
conversion of securities exercisable for,
or convertible into, shares of Common
Stock outstanding on the date hereof) and
such authorized capital stock conforms
to the description thereof set forth in the
Registration Statement and the Final
Prospectus. The description of the
securities of the Company in the Registration
Statement and the Final Prospectus is, and
at the Closing Date will be, complete
and accurate in all material respects.
Except as disclosed in or contemplated by
the Registration Statement or the Final
Prospectus, as of the date referred to
therein, the Company did not have
outstanding any options to purchase, or any
rights or warrants to subscribe for, or any
securities or obligations
convertible into, or exchangeable for, or
any contracts or commitments to issue
or sell, any shares of capital stock or
other securities.
(g) Due
Authorization and Enforceability. The Company has full legal
power
and authority to enter into this Agreement
and the Subscription Agreements and
to issue the Offering Warrants (together,
the "Transaction Documents") and to
consummate the transactions contemplated
hereby and thereby. The Transaction
Documents have been duly authorized,
executed and delivered by the Company and
constitute legal, valid and binding
obligations of the Company enforceable
against the Company in accordance with
their respective terms, except as rights
to indemnity and contribution thereunder
may be limited by federal or state
securities laws and matters of public
policy and except as such enforceability
may be subject to the effect of applicable
bankruptcy, insolvency,
reorganization or similar laws affecting
creditors' rights generally and
equitable principles of general
applicability.
(h) The
Shares. The Shares have been duly authorized by the Company and
will be validly issued, fully paid and
nonassessable and will conform to the
descriptions thereof in the Final
Prospectus; and the issuance of the Shares is
not subject to any preemptive or similar
rights.
(i) No
Violation or Default. Neither the Company nor its Subsidiaries
are
(i) in violation of its charter or by-laws
or similar organizational documents;
(ii) in default, and no event has occurred
that, with notice or lapse of time or
both, would constitute such a default, in
the due performance or observance of
any term, covenant or condition contained
in any indenture, mortgage, deed of
trust, loan agreement or other agreement or
instrument to which the Company or
its Subsidiaries are a party or by which
the Company or its Subsidiaries are
bound or to which any of the property or
assets of the Company or its
Subsidiaries are subject; or (iii) in
violation of any law or statute or any
judgment, order, rule or regulation of any
court or arbitrator or governmental
<PAGE>
or regulatory authority, except, in the
case of each of clauses (ii) and (iii)
above, for any such violation or default
that would not, individually or in the
aggregate, reasonably be expected to have a
Material Adverse Effect.
(j) No
Conflicts. The execution, delivery and performance by the
Company
of each of the Transaction Documents, the
issuance and sale by the Company of
the Shares and the consummation by the
Company of the transactions contemplated
by the Transaction Documents will not (i)
conflict with or result in a breach or
violation of any of the terms or provisions
of, or constitute a default under,
or result in the creation or imposition of
any lien, charge or encumbrance upon
any property or assets of the Company or
its Subsidiaries pursuant to, any
indenture, mortgage, deed of trust, loan
agreement or other agreement or
instrument to which the Company or its
Subsidiaries are a party or by which the
Company or its Subsidiaries are bound or to
which any of the property or assets
of the Company or its Subsidiaries are
subject; (ii) result in any violation of
the provisions of the charter or by-laws or
similar organizational documents of
the Company or its Subsidiaries; or (iii)
result in the violation of any law or
statute or any judgment, order, rule or
regulation of any court or arbitrator or
governmental or regulatory authority,
except, in the case of each of clauses (i)
and (iii) above, for any such conflict,
breach, violation, default, lien, charge
or encumbrance that would not, individually
or in the aggregate, reasonably be
expected to have a Material Adverse
Effect.
(k) No
Consents Required. No consent, approval, authorization, order,
registration or qualification of or with
any court or arbitrator or governmental
or regulatory authority is required for the
execution, delivery and performance
by the Company of each of the Transaction
Documents, the issuance and sale by
the Company of the Shares and the
consummation by the Company of the
transactions contemplated by the
Transaction Documents, except for the
registration of the Shares under the Act
and such consents, approvals,
authorizations, orders and registrations or
qualifications as may be required
under applicable state securities laws or
by the by-laws and rules of the
National Association of Securities Dealers,
Inc. ("NASD") in connection with the
distribution of the Shares by the Placement
Agent.
(l) Legal
Proceedings. There are no legal, governmental or regulatory
actions, suits or proceedings pending, nor,
to the Company's knowledge, any
legal, governmental or regulatory
investigations pending, to which the Company
or its Subsidiaries are a party or to which
any property of the Company or its
Subsidiaries are the subject that,
individually or in the aggregate, if
determined adversely to the Company or its
Subsidiaries, would reasonably be
expected to have a Material Adverse Effect
or materially and adversely affect
the ability of the Company to perform its
obligations under the Transaction
Documents; to the Company's knowledge, no
such actions, suits or proceedings are
threatened or contemplated by any
governmental or regulatory authority or
threatened by others; and (i) to the
Company's knowledge, there are no current
or pending legal, governmental or
regulatory investigations, actions, suits or
proceedings that are required under the Act
to be described in the Final
Prospectus that are not so described; and
(ii) there are no contracts or other
documents that are required under the Act
to be filed as exhibits to the
Registration Statement that are not so
filed.
(m)
Independent Accountants. Deloitte & Touche LLP, who have
certified
certain financial statements of the Company
and its Subsidiaries, are
independent public accountants (the
"Accountants") with respect to the Company
and its Subsidiaries as required by the
Act.
(n) Title
to Real and Personal Property. The Company and its Subsidiaries
have good and marketable title in fee
simple to all items of real property and
good and marketable title to all personal
property owned by them, in each case
free and clear of all liens, encumbrances
and claims except those that (i) do
not materially interfere with the use made
and proposed to be made of such
property by the Company and its
Subsidiaries or (ii) would not reasonably be
expected, individually or in the aggregate,
to have a Material Adverse Effect.
Any real property leased by the Company and
its Subsidiaries are held by them
under valid, existing and enforceable
leases, without any liens, restrictions,
encumbrances or claims, except those that
(A) do not materially interfere with
the use made or proposed to be made of such
property by the Company or its
Subsidiaries or (B) would not be reasonably
expected, individually or in the
aggregate, to have a Material Adverse
Effect.
(o) Title
to Intellectual Property. To the best of the Company's
knowledge, the Company and its Subsidiaries
own or possess adequate rights to
use all patents, patent applications,
trademarks, service marks, trade names,
trademark registrations, service mark
registrations, copyrights, licenses and
know-how (including trade secrets and other
unpatented and/or unpatentable
proprietary or confidential information,
systems or procedures) (collectively,
<PAGE>
the "Intellectual Property"), necessary for
the conduct of their respective
businesses as conducted as of the date
hereof, except to the extent that the
failure to own or possess adequate rights
to use such Intellectual Property
would not, individually or in the
aggregate, reasonably be expected to have a
Material Adverse Effect; and the Company
and its Subsidiaries have not received
any written notice of any claim of
infringement or conflict which asserted
Intellectual Property rights of others,
which infringement or conflict, if the
subject of an unfavorable decision, would
result in a Material Adverse Effect.
(p) No
Undisclosed Relationships. No relationship, direct or indirect,
exists between or among the Company or its
Subsidiaries, on the one hand, and
the directors, officers, stockholders,
customers or suppliers of the Company or
its Subsidiaries, on the other, which is
required by the Act to be disclosed in
the Registration Statement and the Final
Prospectus and is not so disclosed.
(q)
Investment Company Act. The Company is not and, after giving effect
to
the offering and sale of the Shares to be
sold by the Company and the
application of the proceeds thereof as
described in the Final Prospectus, will
not be an "investment company" or an entity
"controlled" by an "investment
company" within the meaning of the
Investment Company Act of 1940, as amended,
and the rules and regulations of the
Commission promulgated thereunder.
(r) Taxes.
The Company and its Subsidiaries have filed all federal, state,
local and foreign tax returns which have
been required to be filed and paid all
taxes shown thereon through the date
hereof, to the extent that such taxes have
become due and are not being contested in
good faith; and, except as otherwise
disclosed in or contemplated by the
Registration Statement or the Final
Prospectus, no tax deficiency has been
determined adversely to the Company or
its Subsidiaries which has had, or would
reasonably be expected to have,
individually or in the aggregate, a
Material Adverse Effect.
(s)
Licenses and Permits. The Company and its Subsidiaries possess or
have
obtained all licenses, certificates,
permits and other authorizations issued by,
and have made all declarations and filings
with, the appropriate federal, state,
local or foreign governmental or regulatory
authorities that are necessary for
the ownership or lease of their respective
properties or the conduct of their
respective businesses as described in the
Registration Statement and the Final
Prospectus (the "Permits"), except where
the failure to possess, obtain or make
the same would not, individually or in the
aggregate, reasonably be expected to
have a Material Adverse Effect; and except
as disclosed in or contemplated by
the Registration Statement or the Final
Prospectus, neither the Company nor its
Subsidiaries have received written notice
of any proceeding relating to
revocation or modification of any such
Permit or has any reason to believe that
such Permit will not be renewed in the
ordinary course, except where such
revocation or modification of any such
Permit or the failure to obtain any such
renewal would not, individually or in the
aggregate, reasonably be expected to
have a Material Adverse Effect.
(t) No
Labor Disputes. No labor disturbance by or dispute with
employees
of the Company or its Subsidiaries exist
or, to the knowledge of the Company, is
threatened which would reasonably be
expected to result in a Material Adverse
Effect.
(u)
Compliance With Environmental Laws. The Company and its
Subsidiaries
(i) are in compliance with any and all
applicable federal, state, local and
foreign laws, rules, regulations, decisions
and orders relating to the
protection of human health and safety, the
environment or hazardous or toxic
substances or wastes, pollutants or
contaminants (collectively, "Environmental
Laws"); (ii) have received and are in
compliance with all permits, licenses or
other approvals required of them under
applicable Environmental Laws to conduct
their respective businesses as described in
the Registration Statement and the
Final Prospectus; and (iii) have not
received notice of any actual or potential
liability for the investigation or
remediation of any disposal or release of
hazardous or toxic substances or wastes,
pollutants or contaminants, except, in
the case of any of clauses (i), (ii) or
(iii) above, for any such failure to
comply or failure to receive required
permits, licenses, or other approvals or
any such liability as would not,
individually or in the aggregate, reasonably be
expected to have a Material Adverse
Effect.
(v)
Compliance With ERISA. Each material employee benefit plan, within
the
meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974,
as amended ("ERISA"), that is maintained,
administered or contributed to by the
Company or any of its affiliates for
employees or former employees of the
Company and its Subsidiaries have been
maintained in material compliance with
its terms and the requirements of any
applicable statutes, orders, rules and
<PAGE>
regulations, including but not limited to
ERISA and the Internal Revenue Code of
1986, as amended (the "Code"); no
prohibited transaction, within the meaning of
Section 406 of ERISA or Section 4975 of the
Code, has occurred which would
result in a material liability to the
Company with respect to any such plan
excluding transactions effected pursuant to
a statutory or administrative
exemption; and for each such plan that is
subject to the funding rules of
Section 412 of the Code or Section 302 of
ERISA, no "accumulated funding
deficiency" as defined in Section 412 of
the Code has been incurred, whether or
not waived, and the fair market value of
the assets of each such plan (excluding
for these purposes accrued but unpaid
contributions) exceeds the present value
of all benefits accrued under such plan
determined using reasonable actuarial
assumptions.
(w)
Accounting Controls. The Company and its Subsidiaries maintain
systems
of internal accounting controls sufficient
to provide reasonable assurance 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
conformity with 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 Company has
established disclosure controls and
procedures (as defined in Exchange Act
Rules 13a-15 and 15d-15) for the Company
and designed such disclosure controls and
procedures to ensure that material
information relating to the Company and its
Subsidiaries are made known to the
certifying officers by others within those
entities, particularly during the
period in which the Company's Annual Report
on Form 10-K or Quarterly Report on
Form 10-Q, as the case may be, is being
prepared. The Company's certifying
officers have evaluated the effectiveness
of the Company's disclosure controls
and procedures as of the quarter ended
December 31, 2003 (such date, the
"Evaluation Date"). The Company presented
in its Form 10-Q for the quarter ended
December 31, 2003 the conclusions of the
certifying officers about the
effectiveness of the disclosure controls
and procedures based on their
evaluations as of the Evaluation Date.
Since the Evaluation Date, there have
been no significant changes in the
Company's internal control over financial
reporting (as such term is defined in
Exchange Act Rules 13a-15 and 15d-15) or,
to the Company's knowledge, in other
factors that could significantly affect the
Company's internal controls.
(x)
Insurance. The Company and its Subsidiaries carry, or are covered
by,
insurance in such amounts and covering such
risks as the Company reasonably
believes are adequate for the conduct of
its businesses as described in the
Registration Statement and the Final
Prospectus and the value of its properties
or as is customary for companies engaged in
similar businesses in similar
industries.
(y) No
Unlawful Payments. Neither the Company nor its Subsidiaries has
at
any time during the last five years (i)
used any corporate funds for any
unlawful contribution to any candidate for
public office; or (ii) made any
payment to any federal or state government
officer or official or other person
charged with similar public duties, other
than payments required or permitted by
the laws of the United States or any
jurisdiction thereof.
(z) No
Broker's Fees. Neither the Company nor its Subsidiaries are a
party
to any contract, agreement or understanding
with any person (other than this
Agreement) that would give rise to a valid
claim against the Company or its
Subsidiaries or the Placement Agent for a
brokerage commission, finder's fee or
like payment in connection with the
offering and sale of the Shares.
(aa) No
Registration Rights. No person has the right to require the
Company or its Subsidiaries to register any
securities for sale under the Act by
reason of the filing of the Registration
Statement with the Commission or by
reason of the issuance and sale of the
Shares, except for rights which have been
waived.
(bb) No
Stabilization. The Company has not taken, directly or
indirectly,
any action designed to or that could
reasonably be expected to cause or result
in any stabilization or manipulation of the
price of the Shares.
(cc)
Forward-Looking Statements. No forward-looking statement (within
the
meaning of Section 27A of the Securities
Act and Section 21E of the Exchange
Act) (a "Forward Looking Statement")
contained in the Registration Statement and
the Final Prospectus has been made or
reaffirmed without a reasonable basis or
has been disclosed other than in good
faith. The Forward Looking Statements
incorporated by reference in the
Registration Statement and the Final Prospectus
from the Company's Annual Report on Form
10-K for the year ended September 30,
2003 (i) are within the coverage of the
safe harbor for forward looking
statements set forth in Section 27A of the
Act, Rule 175(b) under the Act,
<PAGE>
Section 21E of the Exchange Act or Rule
3b-6 under the Exchange Act, as
applicable, (ii) were made by the Company
with a reasonable basis and in good
faith and reflect the Company's good faith
reasonable best estimate of the
matters described therein, and (iii) have
been prepared in accordance with Item
10 of Regulation S-K under the Act.
(dd)
Contracts. All material contracts to which the Company is a
party
have been duly authorized, executed and
delivered by the Company, constitute
valid and binding agreements of the
Company, assuming the due authorization,
execution and delivery by the
counterparties thereto, and are enforceable
against the Company in accordance with the
terms thereof, subject to the effect
of applicable bankruptcy, insolvency or
similar laws affecting creditors' rights
generally and equitable principles of
general applicability.
(ee)
Certificates. No statement, representation or warranty made in
the
certificate to be delivered to the
Placement Agent pursuant to Section 6(g)
below will be, when made, inaccurate,
untrue or incorrect in any material
respect.
4. Further
Agreements of the Company. The Company covenants and agrees
with the Placement Agent that:
(a)
Effectiveness. The Registration Statement has become effective and
the
Company will file the Final Prospectus
pursuant to Rule 424(b) within the
prescribed time period and will provide a
copy of such filing to the Placement
Agent promptly following such filing.
(b)
Amendments or Supplements. The Company will not, during such period
as
the Final Prospectus would be required by
law to be delivered in connection with
sales of the Shares by an underwriter or
dealer in connection with the offering
contemplated by this Agreement, file any
amendment or supplement to the
Registration Statement or the Final
Prospectus, except as required by law,
unless a copy thereof shall first have been
submitted to the Placement Agent
within a reasonable period of time prior to
the filing thereof and the Placement
Agent shall not have reasonably objected
thereto in good faith.
(c) Notice
to Placement Agent. The Company will notify the Placement Agent
promptly, and will, if requested, confirm
such notification in writing, (1) when
any post-effective amendment to the
Registration Statement becomes effective,
but only during the period mentioned in
Section 4(b); (2) of any request by the
Commission for any amendment to the
Registration Statement or any amendment or
supplement to the Final Prospectus or for
additional information relating to or
in connection with the sale of the Shares,
but only during the period mentioned
in Section 4(b); (3) of the issuance by the
Commission of any stop order
suspending the effectiveness of the
Registration Statement or the initiation of
any proceedings for that purpose or the
threat thereof, but only during the
period mentioned in Section 4(b); (4) of
becoming aware of the occurrence of any
event during the period mentioned in
Section 4(b) that in the judgment of the
Company makes any statement made in the
Registration Statement or the Final
Prospectus untrue in any material respect
or that requires the making of any
changes in the Registration Statement or
the Final Prospectus in order to make
the statements therein, in light of the
circumstances in which they are made,
not misleading; and (5) of receipt by the
Company of any notification with
respect to any suspension of the
qualification of the Shares for offer and sale
in any jurisdiction. If at any time the
Commission shall issue any order
suspending the effectiveness of the
Registration Statement in connection with
the offering contemplated hereby, the
Company will make every reasonable effort
to obtain the withdrawal of any such order
at the earliest possible moment. If
the Company has omitted any information
from the Registration Statement,
pursuant to Rule 430A, it will use its best
efforts to comply with the
provisions of and make all requisite
filings with the Commission pursuant to
said Rule 430A and to notify the Placement
Agent promptly of all such filings.
(d)
Ongoing Compliance of the Prospectus. If, at any time when a
Final
Prospectus relating to the Shares is
required to be delivered under the Act, the
Company becomes aware of the occurrence of
any event as a result of which the
Final Prospectus, as then amended or
supplemented, would, in the reasonable
judgment of counsel to the Company or
counsel to the Placement Agent, include
any untrue statement of a material fact or
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, or the Registration
Statement, as then amended or supplemented,
would, in the reasonable judgment of
counsel to the Company or counsel to the
Placement Agent, include any untrue
statement of a material fact or omit to
state a material fact necessary to make
the statements therein not misleading, or
if for any other reason it is
<PAGE>
necessary, in the reasonable judgment of
counsel to the Company or counsel to
the Placement Agent, at any time to amend
or supplement the Final Prospectus or
the Registration Statement to comply with
the Act or the Rules and Regulations,
the Company will promptly notify the
Placement Agent and, subject to Section
4(b) hereof, will promptly prepare and file
with the Commission, at the
Company's expense, an amendment to the
Registration Statement or an amendment or
supplement to the Final Prospectus that
corrects such statement or omission or
effects such compliance and will deliver to
the Placement Agent, without charge,
copies thereof in compliance with Section
4(e) below. The Company consents to
the use of the Final Prospectus or any
amendment or supplement thereto by the
Placement Agent, and the Placement Agent
agrees to provide to each Investor,
prior to the Closing, a copy of the Final
Prospectus and any amendments or
supplements thereto.
(e)
Delivery of Copies. The Company will furnish to the Placement
Agent
and its counsel, without charge in New York
City (i) one copy of the
Registration Statement, including financial
statements and schedules, and all
exhibits thereto and (ii) so long as a
prospectus relating to the Shares is
required to be delivered under the Act, as
many copies of each Preliminary
Prospectus or the Final Prospectus or any
amendment or supplement thereto as the
Placement Agent may reasonably request.
(f)
Compliance with Undertakings. The Company will comply with all of
the
undertakings contained in the Registration
Statement.
(g) Blue
Sky Compliance. Prior to the sale of the Shares to the
Investors,
the Company will cooperate with the
Placement Agent and its counsel in
connection with the registration or
qualification of the Shares for offer and
sale under the state securities or Blue Sky
laws of such jurisdictions as the
Placement Agent may reasonably request;
provided, that in no event shall the
Company be obligated to qualify to do
business in any jurisdiction where it is
not now so qualified or to take any action
which would subject it to general
service of process in any jurisdiction
where it is not now so subject.
(h) Use of
Proceeds. The Company will apply the net proceeds from the
offering and sale of the Shares in the
manner set forth in the Final Prospectus
under the caption "Use of Proceeds."
(i)
American Stock Exchange. The Company will use its best efforts
to
ensure that the Shares are listed on the
American Stock Exchange at the time of
the Closing.
(j)
Reports. For a period of three years from the Closing Date, the
Company will furnish to the Placement
Agent, as soon as they are available,
copies of all reports or other
communications (financial or other) furnished to
holders of the Shares, other than any such
reports or communications filed with
the Commission pursuant to the Commission's
EDGAR system.
(k) Clear
Market. For a period of 60 days after the date hereof, the
Company will not (1) offer, pledge,
announce the intention to sell, sell,
contract to sell, sell any option or
contract to purchase, purchase any option
or contract to sell, grant any option,
right or warrant to purchase or otherwise
transfer or dispose of, directly or
indirectly, any shares of Common Stock or
any securities convertible into or
exercisable or exchangeable for Common Stock;
or (2) enter into any swap or other
agreement that transfers, in whole or in
part, any of the economic consequences of
ownership of the Common Stock, whether
any such transaction described in clause
(1) or (2) above is to be settled by
delivery of Common Stock or such other
securities, in cash or otherwise, without
the prior written consent of the Placement
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