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EXHIBIT 1.1
EXECUTION COPY
DENDREON CORPORATION
Common Stock
PLACEMENT AGENT AGREEMENT
dated November 15, 2006
CREDIT SUISSE SECURITIES (USA) LLC
LAZARD CAPITAL MARKETS LLC
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PLACEMENT AGENT AGREEMENT
November 15, 2006
Credit Suisse Securities (USA) LLC Lazard
Capital Markets LLC
Eleven Madison Avenue
30 Rockefeller Plaza
New York, N.Y. 10010
New York, N.Y. 10020
Ladies and Gentlemen:
Introductory. Dendreon Corporation, a Delaware corporation (the
"Company"),
proposes, pursuant to the terms of this Placement Agent Agreement
(this
"Agreement") and the Subscription Agreements in the form of
Schedule A attached
hereto (the "Subscription Agreements") entered into with the
purchasers
identified therein (each a "Purchaser" and collectively, the
"Purchasers"), to
sell to the Purchasers an aggregate of 9,890,110 shares of common
stock, par
value $0.001 per share (the "Common Stock") of the Company. The
aggregate of
9,890,110 shares of Common Stock so proposed to be sold is
hereinafter referred
to as the "Shares". The Company hereby confirms its agreement with
Credit Suisse
Securities (USA) LLC ("Credit Suisse") and Lazard Capital Markets
LLC ("LCM" and
together with Credit Suisse, the "Placement Agents"), as set forth
below.
Section 1. Agreement to Act as Placement Agents; Placement of
Shares. On
the basis of the representations, warranties and agreements of the
Company
herein contained, and subject to all the terms and conditions of
this Agreement:
(a) The Company hereby authorizes the Placement Agents to act as
its
exclusive agents 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"). Until the Closing Date, the Company shall
not,
without the prior consent of the Placement Agents, solicit or
accept offers
to
purchase Shares otherwise than through the Placement Agents. LCM
may
utilize the expertise of Lazard Freres & Co. LLC in connection
with LCM's
placement agent activities; provided however, that the Company
shall only
compensate the Placement Agents for their services hereunder, and
not any
third parties acting on their behalf, other than as set forth in
Section 5
of
this Agreement.
(b) The Placement Agents agree, as agents of the Company, to use
their
best
efforts to solicit offers to purchase the Shares from the Company
on
the
terms and subject to the conditions set forth in the Prospectus
(as
defined below). The Placement Agents have no authority to bind the
Company
with
respect to any prospective offer to purchase Shares. The
Placement
Agents shall use best efforts to assist the Company in
obtaining
performance by each Purchaser whose offer to purchase Shares has
been
solicited by the Placement Agents and accepted by the Company, but
the
Placement Agents shall not, except as otherwise provided in this
Agreement,
have
any liability to the Company in the event any such purchase is
not
consummated for any reason. Under no circumstances will
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the
Placement Agents be obligated to purchase any Shares for their
own
accounts and, in soliciting purchases of Shares, the Placement
Agents shall
act
solely as the Company's agents and not as principals.
Notwithstanding
the
foregoing and except as otherwise provided in Section 1(c), it
is
understood and agreed that the Placement Agents (or their
affiliates) may,
solely at their discretion and without any obligation to do so,
purchase
Shares as principals.
(c) Subject to the provisions of this Section 1, offers for the
purchase of Shares may be solicited by the Placement Agents as
agents for
the
Company at such times and in such amounts as the Placement Agents
deem
advisable. Each 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. Each Placement Agent shall have the right, in its
discretion
reasonably exercised, without 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.
(d) The purchases of the Shares by the Purchasers shall be
evidenced
by
the execution of Subscription Agreements by each of the parties
thereto.
(e) As compensation for services rendered, on the Closing Date,
the
Company shall pay to the Placement Agents by wire transfer of
immediately
available funds to an account or accounts designated by the
Placement
Agents, an aggregate amount equal to six percent (6%) of the gross
proceeds
received by the Company from the sale of the Shares on such Closing
Date
(such aggregate amount to be divided evenly between the Placement
Agents).
(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
Purchaser
thereof against payment by such Purchaser. If the Company shall
default in
its
obligations to deliver Shares to a Purchaser whose offer it has
accepted, the Company shall indemnify and hold the Placement
Agents
harmless against any loss, claim or damage arising from or as a
result of
such
default by the Company.
Section 2. Representations and Warranties of the Company. The
Company
hereby represents, warrants and covenants to each Placement Agent
as follows:
(a) The Company has prepared and filed with the Securities and
Exchange Commission (the "Commission") a registration statement on
Form S-3
(File No. 333-127521), which contains a base prospectus (the
"Base
Prospectus"), to be used in connection with the public offering and
sale of
the
Shares. Such registration statement, including the financial
statements, exhibits and schedules included or incorporated
therein, in the
form
in which it was declared effective by the Commission under the
Securities Act of 1933 and the rules and regulations promulgated
thereunder
(collectively, the "Securities Act"), including any required
information
deemed to be a part thereof at the time of effectiveness pursuant
to Rule
430B
under the Securities Act or the Securities Exchange Act of 1934
and
the
rules and regulations promulgated thereunder (collectively, the
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"Exchange Act"), is called the "Registration Statement." Any
preliminary
prospectus supplement to the Base Prospectus that describes the
Shares and
the
Offering and is used prior to filing of the Final Prospectus is
called,
together with the Base Prospectus, a "Preliminary Prospectus." The
term
"Prospectus" shall mean the final prospectus relating to the Shares
that is
first filed pursuant to Rule 424(b) after the date and time that
this
Agreement is executed and delivered by the parties hereto. Any
reference
herein to the Registration Statement, any Preliminary Prospectus or
the
Prospectus shall be deemed to refer to and include the
documents
incorporated by reference therein pursuant to Item 12 of Form S-3
under the
Securities Act; any reference to any amendment or supplement to
any
Preliminary Prospectus or the Prospectus shall be deemed to refer
to and
include any documents filed after the date of such Preliminary
Prospectus
or
Prospectus, as the case may be, under the Exchange Act, and
incorporated
by
reference in such Preliminary Prospectus or Prospectus, as the case
may
be;
and any reference to any amendment to the Registration Statement
shall
be
deemed to refer to and include any annual report of the Company
filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective
date
of the Registration Statement that is incorporated by reference in
the
Registration Statement. Any further documents so filed and
incorporated by
reference in the Prospectus or any further amendment or supplement
thereto,
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.
(b) Compliance with Registration Requirements. The Registration
Statement has been declared effective by the Commission under
the
Securities Act. The Company has complied to the Commission's
satisfaction
with
all requests of the Commission for additional or supplemental
information. No stop order suspending the effectiveness of the
Registration
Statement is in effect and no proceedings for such purpose have
been
instituted or are pending or, to the best knowledge of the Company,
are
contemplated or threatened by the Commission.
Each
Preliminary Prospectus and the Prospectus when filed complied in
all
material respects with the Securities Act and the rules thereunder
and, if filed
by electronic transmission pursuant to EDGAR (except as may be
permitted by
Regulation S-T under the Securities Act), was identical to the copy
thereof
delivered to the Placement Agents for use in connection with the
offer and sale
of the Shares. Each of the Registration Statement and any
post-effective
amendment thereto, at the time it became effective and at the date
hereof,
complied and will comply in all material respects with the
Securities Act and
did not and will not contain any untrue statement of a material
fact or omit to
state a material fact required to be stated therein or necessary in
order to
make the statements therein not misleading. The Prospectus, as
amended or
supplemented, as of its date, at the date hereof, at the time of
any filing
pursuant to Rule 424(b), at the Closing Date (as defined herein),
did not and
will not contain 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. There
is no
contract or other document required to be described in the
Prospectus or to be
filed as exhibits to the Registration Statement which has not been
described or
filed as required.
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(c) Documents Incorporated by Reference. The documents incorporated
by
reference in the Prospectus, when they became effective or were
filed with
the
Commission, as the case may be, conformed in all material respects
to
the
requirements of the Securities Act or the Exchange Act, as
applicable.
(d) Disclosure Package. The term "Disclosure Package" shall mean
(i)
the
Base Prospectus and the Preliminary Prospectus dated November 15,
2006
(which is the most recent Preliminary Prospectus distributed to
investors),
as amended or supplemented,
(ii) any issuer free writing prospectus as
defined in Rule 433 of the Securities Act (each, an "Issuer Free
Writing
Prospectus"), that is intended for general distribution to
prospective
investors and identified as such in Schedule B attached hereto
(each, a
"General Use Free Writing Prospectus") and (iii) the information
set forth
in
Schedule C attached hereto. As of 8:00 p.m. (Eastern time) on the
date
of
this Agreement (the "Initial Sale Time"), neither (x) the
Disclosure
Package nor (y) any Issuer Free Writing Prospectus that is not a
General
Use
Issuer Free Writing Prospectus (each, a "Limited Use Free
Writing
Prospectus") when considered together with the Disclosure
Package,
contained any untrue
statement of a material fact or omitted to state any
material fact necessary in order to make the statements therein, in
the
light of the circumstances under which they were made, not
misleading.
(e) Company Not Ineligible Issuer. At the earliest time after
the
filing of the Registration Statement relating to the Shares that
the
Company or another offering participant made a bona fide offer
(within the
meaning of Rule 164(h)(2)) of the Securities Act, the Company was
not and
is
not an Ineligible Issuer (as defined in Rule 405 of the Securities
Act),
without taking account of any determination by the Commission
pursuant to
Rule
405 of the Securities Act that it is not necessary that the Company
be
considered an Ineligible Issuer.
(f) Issuer Free Writing Prospectus. Each Issuer Free Writing
Prospectus will not, as of the date issued, include any information
that
conflicts or will conflict with the information then contained in
the
Registration Statement, including any document that is, or will be
at such
time, incorporated by reference therein that has not been
superseded or
modified.
(g) Distribution of Offering Material by the Company. The Company
has
not
distributed and will not distribute, prior to the completion of
the
Prospectus Delivery Period (as defined below), any offering
material in
connection with the offering and sale of the Shares other than
a
Preliminary Prospectus, the Prospectus, any Issuer Free Writing
Prospectus
reviewed and consented to by the Placement Agents or included in
Schedule B
hereto or the Registration Statement.
(h) The Placement Agent Agreement. This Agreement has been duly
authorized, executed and delivered by, and is a valid and binding
agreement
of,
the Company, enforceable against the Company in accordance with
its
terms, subject to the effect of public policy on the enforceability
of
provisions relating to indemnification or contribution.
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(i) The Subscription Agreements and the Escrow Agreement. The
Company
has
the full right, power and authority to enter into each of the
Subscription Agreements and that certain Escrow Agreement (the
"Escrow
Agreement") dated as of the date hereof by and among the Company,
the
Placement Agents and the escrow agent named therein, and to perform
and to
discharge its obligations hereunder and thereunder; and each of the
Escrow
Agreement and the Subscription Agreements has been duly authorized
and when
executed and delivered by the Company, will constitute a valid and
binding
obligation of the Company enforceable in accordance with its
terms.
(j) Authorization of the Shares. The Shares to be issued and sold
by
the
Company pursuant to the Subscription Agreements have been duly
authorized for issuance and sale and, when issued and delivered by
the
Company pursuant to
the Subscription Agreement on the Closing Date, will be
validly issued, fully paid and nonassessable.
(k) No Transfer Taxes. There are no transfer taxes or other
similar
fees
or charges under federal law or the laws of any state, or any
political subdivision thereof, required to be paid in connection
with the
execution and delivery of this Agreement or the Subscription
Agreements or
the
issuance by the Company or sale by the Company of the Shares.
(l) No Applicable Registration or Other Similar Rights. There are
no
persons with registration or other similar rights to have any
equity or
debt
securities registered for sale under the Registration Statement
or
included in the offering contemplated by this Agreement and the
Subscription Agreements, except for such rights as have been duly
waived.
(m) No Material Adverse Change. Except as otherwise disclosed in
the
Disclosure Package, subsequent to the respective dates as of
which
information is given in the Disclosure Package: (i) there has been
no
material adverse change, or any development that could reasonably
be
expected to result in a material adverse change, in the
condition,
financial or otherwise, or in the earnings, business,
properties,
operations or prospects, whether or not arising from transactions
in the
ordinary course of business, of the Company and the Subsidiary, (as
defined
below) considered as one entity (any such change is called a
"Material
Adverse Change"); (ii) the Company and the Subsidiary, considered
as one
entity, have not incurred any material liability or obligation,
indirect,
direct or contingent, nor entered into any material transaction
or
agreement; and (iii) there has been no dividend or distribution of
any kind
declared, paid or made by the Company or, except for dividends paid
to the
Company, the Subsidiary on any class of capital stock or repurchase
or
redemption by the Company or the Subsidiary of any class of capital
stock.
(n) Independent Registered Public Accounting Firm. Ernst &
Young LLP,
who
have expressed their opinion with respect to the financial
statements
(which term as used in this Agreement includes the related notes
thereto)
and
supporting schedules filed with the Commission as a part of the
Registration Statement and included in the Disclosure Package and
the
Prospectus, are an independent public accounting firm with respect
to the
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Company as required by the Securities Act and the Exchange Act and
the
applicable published rules and regulations thereunder.
(o) Preparation of the Financial Statements. The financial
statements
filed with the Commission as a part of or incorporated by reference
in the
Registration Statement and included or incorporated by reference in
the
Disclosure Package and the Prospectus present fairly the
consolidated
financial position of the Company and the Subsidiary as of and at
the dates
indicated and the results of their operations and cash flows for
the
periods specified. The supporting schedules included or
incorporated by
reference in the Registration Statement present fairly the
information
required to be stated therein. Such financial statements and
supporting
schedules comply as to form with the applicable accounting
requirements of
the
Securities Act and have been prepared in conformity with
generally
accepted accounting principles applied on a consistent basis
throughout the
periods involved, except as may be expressly stated in the related
notes
thereto. No other financial statements or supporting schedules are
required
to
be included or incorporated by reference in the Registration
Statement.
The
financial data set forth in each of the Preliminary Prospectus and
the
Prospectus under the captions "Summary--Summary Consolidated
Financial
Data" and "Capitalization" fairly present the information set forth
therein
on a
basis consistent with that of the audited financial statements
contained in the Registration Statement.
(p) Incorporation and Good Standing of the Company and the
Subsidiary.
Each
of the Company and the Subsidiary has been duly incorporated and
is
validly existing as a corporation in good standing under the laws
of the
jurisdiction of its incorporation and has corporate power and
authority to
own
or lease, as the case may be, and operate its properties and to
conduct
its
business as described in the Disclosure Package and the Prospectus
and,
in
the case of the Company, to enter into and perform its obligations
under
this
Agreement. Each of the Company and the Subsidiary is duly qualified
as
a
foreign corporation to transact business and is in good standing in
each
jurisdiction in which such qualification is required, whether by
reason of
the
ownership or leasing of property or the conduct of business, except
for
such
jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, result in a
material
adverse effect, on the condition, financial or otherwise, or on
the
earnings, business, properties, operations or prospects, whether or
not
arising from transactions in the ordinary course of business, of
the
Company and the Subsidiary, considered as one entity (a "Material
Adverse
Effect"). All of the issued and outstanding shares of capital stock
of the
subsidiary have been duly authorized and validly issued, are fully
paid and
nonassessable and are owned by the Company directly, free and clear
of any
security interest,
mortgage, pledge, lien, encumbrance or claim. The
Company does not own or control, directly or indirectly, any
corporation,
association or other entity other than the subsidiary listed in
Exhibit 21
to
the Company's Annual Report on Form 10-K for the fiscal year
ended
December 31, 2005.
(q) Capitalization and Other Capital Stock Matters. The
authorized,
issued and outstanding capital stock of the Company is as set forth
in each
of
the Disclosure Package and the Prospectus under the column
headed
"Actual" under the caption "Capitalization" as of the date(s)
specified,
and
after giving effect to the sale of the Shares,
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as
specified under the column headed "As Adjusted" (other than for
subsequent issuances, if any, pursuant to employee benefit plans
described
in
the Disclosure Package and the Prospectus or upon exercise of
outstanding options, warrants or other rights to receive shares
described
in
the Disclosure Package and the Prospectus, as the case may be).
The
Common Stock (including the Shares) conforms in all material
respects to
the
description thereof contained in the Disclosure Package and the
Prospectus. All of the
issued and outstanding shares of Common Stock have
been
duly authorized and validly issued, are fully paid and
nonassessable
and
have been issued in compliance with federal and state securities
laws.
None
of the outstanding shares of Common Stock were issued in violation
of
any
preemptive rights, rights of first refusal or other similar rights
to
subscribe for or purchase securities of the Company. There are
no
authorized or outstanding options, warrants, preemptive rights,
rights of
first refusal or other rights to purchase, or equity or debt
securities
convertible into or exchangeable or exercisable for, any capital
stock of
the
Company or the Subsidiary other than those accurately described in
the
Disclosure Package and the Prospectus. The description of the
Company's
stock option, stock bonus and other stock plans or arrangements,
and the
options or other rights granted thereunder, set forth or
incorporated by
reference in each of the Disclosure Package and the Prospectus
accurately
and
fairly presents the information required to be shown with respect
to
such
plans, arrangements, options and rights.
(r) Listing. The Shares have been accepted for quotation on the
Nasdaq
Global Market, subject only to official notice of issuance.
(s) Non-Contravention of Existing Instruments; No Further
Authorizations or Approvals Required. Neither the Company nor
the
Subsidiary is (i) in violation or in default (or, with the giving
of notice
or
lapse of time, would be in default) ("Default") under its charter
or
by-laws, (ii) in Default under any indenture, mortgage, loan or
credit
agreement, deed of trust, note, contract, franchise, lease or
other
agreement, obligation, condition, covenant or instrument to which
the
Company or such Subsidiary is a party or by which it may be bound,
or to
which any of the property or assets of the Company or the
Subsidiary is
subject (each, an "Existing
Instrument"), or (iii) in violation of any
statute, law, rule, regulation, judgment, order or decree of any
court,
regulatory body, administrative agency, governmental body,
arbitrator or
other authority having jurisdiction over the Company or such
Subsidiary or
any
of its properties, as applicable, except with respect to clauses
(ii)
and
(iii) only, for such Defaults or violations as would not,
individually
or
in the aggregate, have a Material Adverse Effect. The
execution,
delivery and performance of this Agreement, the Subscription
Agreements and
the
Escrow Agreement by the Company, the issue and sale of the Shares
by
the
Company and the consummation of the transactions contemplated
hereby
and
thereby, by the Disclosure Package and by the Prospectus (i) have
been
duly
authorized by all necessary corporate action and will not result
in
any
Default under the charter or by-laws of the Company or the
Subsidiary,
(ii)
will not conflict with or constitute a breach of, or Default under,
or
result in the creation or imposition of any lien, charge or
encumbrance
upon
any property or assets of the Company or the Subsidiary pursuant
to,
or
require the consent of any other party to, any Existing Instrument,
and
(iii) will not result in any violation of any statute, law,
rule,
regulation, judgment, order or decree applicable to the Company or
the
Subsidiary of any court, regulatory body, administrative
agency,
governmental body, arbitrator or other
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authority having jurisdiction over the Company or the Subsidiary or
any of
its
or their properties. No consent, approval, authorization or other
order
of,
or registration or filing with, any court or other governmental
or
regulatory authority or agency is required for execution, delivery
and
performance of this Agreement, the Subscription Agreements and the
Escrow
Agreement by the Company, the offer or sale of the Shares or
the
consummation of the transactions contemplated hereby or thereby, by
the
Disclosure Package and by the Prospectus, except such as have been
obtained
or
made by the Company and are in full force and effect under the
Securities Act, applicable state securities or blue sky laws.
(t) No Material Actions or Proceedings. There are no legal or
governmental actions, suits or proceedings, including without
limitations,
any proceedings pending
before the United States Food and Drug
Administration ("FDA") or comparable federal, state, local or
foreign
governmental bodies (it being understood that the interaction
between the
Company and the FDA and such comparable governmental bodies
relating to the
clinical development and product approval process shall not be
deemed
proceedings for purposes of this representation) pending or, to the
best of
the
Company's knowledge, threatened (i) against or affecting the
Company or
the
Subsidiary, (ii) which has as the subject thereof any officer
or
director of, or property owned or leased by, the Company or the
Subsidiary
or
(iii) relating to environmental or discrimination matters, where in
any
such
case (A) there is a reasonable possibility that such action, suit
or
proceeding might be determined adversely to the Company or the
Subsidiary
and
(B) any such action, suit or proceeding, if so determined
adversely,
would reasonably be expected to have a Material Adverse Effect or
adversely
affect the consummation of the transactions contemplated by this
Agreement,
the
Subscription Agreements and the Escrow Agreement.
(u) Labor Matters. No labor problem or dispute with the employees
of
the
Company or the Subsidiary exists or, to the Company's knowledge,
is
threatened or imminent.
(v) Intellectual Property Rights. The Company and the Subsidiary
own,
possess, license or have other rights to use, on reasonable terms,
all
patents, patent applications, trade and service marks, trade and
service
mark
registrations, trade names, copyrights, licenses, inventions,
trade
secrets, technology, know-how and other intellectual property
(collectively, the "Intellectual Property") necessary for the
conduct of
the
Company's business as now conducted or as proposed in each of
the
Disclosure Package and the Prospectus to be conducted. Except as
set forth
in
the Disclosure Package and the Prospectus (a) no party has been
granted
an
exclusive license to use any portion of such Intellectual Property
owned
by
the Company; (b) to the Company's knowledge, there is no
material
infringement by third parties of any such Intellectual Property
owned by or
exclusively licensed to the Company; (c) to the Company's
knowledge, there
is
no pending or threatened action, suit, proceeding or claim by
others
challenging the Company's rights in or to any material
Intellectual
Property, and the Company is unaware of any facts which would form
a
reasonable basis for any such claim; (d) there is no pending or
threatened
action, suit,
proceeding or claim by others challenging the validity or
scope of any such Intellectual Property, and the Company is unaware
of any
facts which would form a reasonable basis for any such claim; and
(e) there
is
no pending or threatened action, suit,
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proceeding or claim by
others that the Company's business as now conducted
infringes or otherwise violates any patent, trademark, copyright,
trade
secret or other proprietary rights of others, and the Company is
unaware of
any
other fact which would form a reasonable basis for any such
claim.
(w) All Necessary Permits, etc. The Company and the Subsidiary
possess
such
valid and current licenses, certificates, authorizations or
permits
issued by the appropriate state, federal or foreign regulatory
agencies or
bodies necessary to conduct their respective businesses, and
neither the
Company nor the Subsidiary has received any notice of proceedings
relating
to
the revocation or modification of, or non-compliance with, any
such
license, certificate, authorization or permit which, singly or in
the
aggregate, if the subject of an unfavorable decision, ruling or
finding,
could have a Material Adverse Effect.
(x) Title to Properties. The Company and the Subsidiary have good
and
marketable title to all the properties and assets reflected as
owned in the
financial statements referred to in Section 2(o) above (or
elsewhere in the
Disclosure Package and the Prospectus), in each case free and clear
of any
security interests, mortgages, liens, encumbrances, equities,
claims and
other defects, with the exception of assets subject to capitalized
lease
obligations, and except such as do not materially and adversely
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 or the
Subsidiary. The
real
property, improvements, equipment and personal property held
under
lease by the Company or the Subsidiary are held under valid and
enforceable
leases, with such exceptions as are not material and do not
materially
interfere with the use made or proposed to be made of such real
property,
improvements, equipment or personal property by the Company or
such
Subsidiary.
(y) Tax Law Compliance. The Company and the Subsidiary have filed
all
necessary federal, state, local and foreign income and franchise
tax
returns in a timely manner and have paid all taxes required to be
paid by
any
of them and, if due and payable, any related or similar
assessment,
fine
or penalty levied against any of them, except for any taxes,
assessments, fines or penalties as may be being contested in good
faith and
by
appropriate proceedings, or such taxes, assessments, fines or
penalties
that
could not reasonably be expected to have a Material Adverse
Effect.
The
Company has made appropriate provisions in the applicable
financial
statements referred to in Section 2(o) above in respect of all
federal,
state, local and foreign income and franchise taxes for all current
or
prior periods as to which the tax liability of the Company or
its
consolidated subsidiary has not been finally determined.
(z) Company Not an "Investment Company". The Company is not, and
after
receipt of payment for the Shares and the application of the
proceeds
thereof as contemplated under the caption "Use of Proceeds" in each
of the
Preliminary Prospectus
and the Prospectus will not be, required to register
as
an "investment company" within the meaning of the Investment
Company Act
of
1940, as amended.
(aa) Insurance. Each of the Company and the Subsidiary is insured
by
recognized, financially sound and reputable institutions with
policies in
such
amounts and
9
<PAGE>
with
such deductibles and covering such risks as are generally
deemed
adequate and customary for their businesses. All policies of
insurance and
fidelity or surety bonds insuring the Company or the Subsidiary or
their
respective businesses, assets, employees, officers and directors
are in
full
force and effect; the Company and the Subsidiary are in
compliance
with
the terms of such policies and instruments in all material
respects;
and
there are no claims by the Company or the Subsidiary under any
such
policy or instrument as to which any insurance company is denying
liability
or
defending under a reservation of rights clause. The Company has
no
reason to believe that it or any subsidiary will not be able (i) to
renew
its
existing insurance coverage as and when such policies expire or
(ii) to
obtain comparable coverage
from similar institutions as may be necessary or
appropriate to conduct its business as now conducted and at a cost
that
would not have a Material Adverse Effect.
(bb) No Restrictions on Dividends. No subsidiary of the Company
is
currently prohibited, directly or indirectly, from paying any
dividends to
the
Company, from making any other distribution on such
Subsidiary's
capital stock, from repaying to the Company any loans or advances
to such
Subsidiary from the Company or from transferring any of such
Subsidiary's
property or assets to the Company, except as described in or
contemplated
by
the Disclosure Package and the Prospectus.
(cc) No Price Stabilization or Manipulation. The Company has not
taken
and
will not take, directly or indirectly, any action designed to or
that
might be reasonably expected to cause or result in stabilization
or
manipulation of the price of the Common Stock to facilitate the
sale or
resale of the Shares. The Company acknowledges that the Placement
Agents
may
engage in passive market making transactions in the Shares on
the
Nasdaq Global Market in accordance with Regulation M under the
Exchange
Act.
(dd)
Related Party Transactions. There are no business relationships
or
related-party transactions involving the Company or the Subsidiary
or
any
other person required to be described in the Disclosure Package or
the
Prospectus that have not been described as required.
(ee) Internal Controls and Procedures. The Company maintains
(i)
effective internal control over financial reporting as defined in
Rule
13a-15 under the Exchange Act, and (ii) a system of internal
accounting
controls sufficient to provide reasonable assurance that (A)
transactions
are
executed in accordance with management's general or specific
authorizations; (B) transactions are recorded as necessary to
permit
preparation of financial statements in conformity with generally
accepted
accounting principles and to maintain asset accountability; (C)
access to
assets is permitted only in accordance with management's general
or
specific authorization; and (D) the recorded accountability for
assets is
compared with the existing assets at reasonable intervals and
appropriate
action is taken with respect to any differences.
(ff) No Material Weakness in Internal Controls. Since the end of
the
Company's most recent audited fiscal year, there has been (i) to
the
Company's knowledge, no material weakness in the Company's internal
control
over
financial reporting (whether or not remediated) and (ii) no change
in
the
Company's internal control over financial
10
<PAGE>
reporting that has materially adversely affected, or is reasonably
likely
to
materially adversely affect, the Company's internal control
over
financial reporting.
(gg) Earnings Statement. The Company agrees with each of the
Placement
Agents to make generally available to its stockholders as soon
as
practicable, but in any event not later than 16 months after the
date
hereof, an earnings statement covering a period of at least 12
months
beginning after the date hereof and otherwise satisfying Section
11(a) of
the
Securities Act.
(hh) No Unlawful Contributions or Other Payments. Neither the
Company
nor
the Subsidiary nor, to the knowledge of the Company, any
director,
officer, agent, employee or affiliate of the Company or the
Subsidiary is
aware of or has taken any action, directly or indirectly, that
would result
in a
violation by such persons of the FCPA, including, without
limitation,
making use of the mails or any means or instrumentality of
interstate
commerce corruptly in furtherance of an offer, payment, promise to
pay or
authorization of the payment of any money, or other property, gift,
promise
to
give, or authorization of the giving of anything of value to
any
"foreign official" (as such term is defined in the FCPA) or any
foreign
political party or official thereof or any candidate for foreign
political
office, in contravention of the FCPA, and the Company, the
Subsidiary and,
to
the knowledge of the Company, its affiliates have conducted
their
businesses in compliance with the FCPA and have instituted and
maintain
policies and procedures designed to ensure, and which are
reasonably
expected to continue to ensure, continued compliance therewith.
"FCPA" means Foreign Corrupt Practices Act of 1977, as amended, and
the
rules and regulations thereunder.
(ii) Compliance with Environmental Laws. Except as otherwise
disclosed
in
the Disclosure Package and the Prospectus (i) neither the Company
nor
the
Subsidiary is in violation of any federal, state, local or foreign
law,
regulation, order, permit or other requirement relating to
pollution or
protection of human health or the environment (including,
without
limitation, ambient air, surface water, groundwater, land surface
or
subsurface strata) or wildlife, including without limitation, laws
and
regulations relating to emissions, discharges, releases or
threatened
releases of chemicals, pollutants, contaminants, wastes, toxic
substances,
hazardous substances, petroleum and petroleum products
(collectively,
"Materials of Environmental Concern"), or otherwise relating to
the
manufacture, processing, distribution, use, treatment, storage,
disposal,
transport or handling of Materials of Environmental Concern
(collectively,
"Environmental Laws"), which violation includes, but is not limited
to,
noncompliance with any permits or other governmental
authorizations
required for the operation of the business of the Company or the
Subsidiary
under applicable Environmental Laws, or noncompliance with the
terms and
conditions thereof, nor has the Company or the Subsidiary received
any
written communication, whether from a governmental authority,
citizens
group, employee or otherwise, that alleges that the Company or
the
Subsidiary is in violation of any Environmental Law, except as
would not,
individually or in the aggregate, have a Material Adverse Effect;
(ii)
there is no claim, action or cause of action filed with a court
or
governmental authority, no investigation with respect to which the
Company
has
received
11
<PAGE>
written notice, and no written notice by any person or entity
alleging
potential liability for investigatory costs, cleanup costs,
governmental
responses costs, natural resources damages, property damages,
personal
injuries, attorneys' fees or penalties arising out of, based on
or
resulting from the presence, or release into the environment, of
any
Material of Environmental Concern at any location owned, leased or
operated
by
the Company or the Subsidiary, now or in the past
(collectively,
"Environmental Claims"), pending or, to the best of the
Company's
knowledge, threatened against the Company or the Subsidiary or any
person
or
entity whose liability for any Environmental Claim the Company or
the
Subsidiary has retained or assumed either contractually or by
operation of
law,
except as would not, individually or in the aggregate, have a
Material
Adverse Effect; (iii) to the best of the Company's knowledge, there
are no
past, present or anticipated future actions, activities,
circumstances,
conditions, events or incidents, including, without limitation,
the
release, emission, discharge, presence or disposal of any Material
of
Environmental Concern, that reasonably could result in a violation
of any
Environmental Law, require expenditures to be incurred pursuant
to
Environmental Law, or form the basis of a potential Env
