Exhibit 1.1
2,215,384 Shares
MEDIVATION, INC.
Common Stock
($.01 par value)
PLACEMENT AGENT
AGREEMENT
December 7, 2006
C OWEN AND C OMPANY ,
LLC
Leerink Swann & Company
Rodman & Renshaw, LLC
Emerging Growth Equities, Ltd.
c/o Cowen and Company,
LLC
1221 Avenue of the Americas
New York, New York 10020
Dear Sirs:
1. I NTRODUCTION . Medivation, Inc., a Delaware corporation (the
“ Company ”), proposes to issue and sell to the
purchasers, pursuant to the terms of the Subscription Agreements in
the form of Exhibit A attached hereto (the “
Subscription Agreements ”) entered into with the
purchasers identified therein (each a “ Purchaser
” and collectively, the “ Purchasers ”),
up to an aggregate of 2,215,384 shares of common stock, $.01 par
value per share (the “ Common Stock ”) of the
Company. The Common Stock so proposed to be sold is hereinafter
referred to as the “ Shares .” The Company
hereby confirms its agreement with Cowen and Company, LLC (“
Cowen ”), Leerink Swann & Company (“
Leerink ”), Rodman & Renshaw, LLC (“
Rodman ”) and Emerging Growth Equities, Ltd. (“
Emerging Growth ” and together with Cowen, Leerink and
Rodman, the “ Placement Agents ”) to act as
placement agents in accordance with the terms and conditions of
this Placement Agent Agreement (this “ Agreement
”). Cowen is acting as the representative of the Placement
Agents and in such capacity is hereinafter referred to as the
“ Representative .”
2. A GREEMENT TO A CT AS P LACEMENT A GENTS ; P LACEMENT OF S ECURITIES . 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:
(I) The Company hereby authorizes
the Placement Agents to act as its sole 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 (as defined in
Section 4 hereof), the Company shall not, without the
prior written consent of the Representative, solicit or accept
offers to purchase Shares otherwise than through the Placement
Agents.
(II) The Placement Agents agree, as
agents of the Company, to use their reasonable 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 shall use reasonable efforts to assist
the Company in selling shares to each Purchaser whose offer to
purchase the Shares was solicited by the Placement Agents and
accepted by the Company. Under no circumstances will the
Placement
Agents be obligated to underwrite or
purchase any Shares for their own account 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 2(II) , 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 the Shares
as principals.
(III) Subject to the provisions of
this Section 2 , 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. The Representative shall have
the right, in its reasonable discretion, with notice to the
Company, to reject any offer to purchase Shares received by the
Placement Agents, in whole or in part, and any such rejection shall
not be deemed a breach of this Agreement.
(IV) The Shares are being sold to
the Purchasers at a price of $16.25 per share. The purchases of the
Shares by the Purchasers shall be evidenced by the execution of
Subscription Agreements by each of the Purchasers and the
Company.
(V) As compensation for services
rendered, on the Closing Date (as defined in Section 4
hereof), (A) the Company shall pay to the Placement Agents by
wire transfer of immediately available funds to an account or
accounts designated by the Representative, on such Closing Date, 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 among the
Placement Agents pursuant to a prior existing agreement between the
Placement Agents).
(VI) No Shares which the Company has
agreed to sell pursuant to Subscription Agreements 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, damage or expense arising from or
as a result of such default by the Company in accordance with the
procedures set forth in Section 8(III)
herein.
3. R EPRESENTATIONS AND W ARRANTIES OF THE C OMPANY .
(I) The Company represents and
warrants to, and agrees with, the Placement Agents and the
Purchasers that:
(a) The Company has prepared and
filed in conformity with the requirements of the Securities Act of
1933, as amended (the “ Securities Act ”), and
published rules and regulations thereunder (the “ Rules
and Regulations ”) adopted by the Securities and Exchange
Commission (the “ Commission ”) a
“shelf” Registration Statement on Form S-3 (File
No. 333-138057), which became effective on November 3,
2006 (the “ Effective Date ”), including a base
prospectus relating to the Shares (the “ Base
Prospectus ”), and such amendments and supplements
thereto as may have been required to the date of this Agreement.
The term “ Registration Statement ” as used in
this Agreement means the registration statement
(including
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all exhibits, financial schedules
and all documents and information deemed to be a part of the
Registration Statement pursuant to Rule 430A under the Securities
Act), as amended and/or supplemented to the date of this Agreement,
including the Base Prospectus. 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, to the Knowledge (as defined herein) of the Company,
are threatened by the Commission. The Company, if required by the
Rules and Regulations of the Commission, will file the Prospectus
(as defined below), with the Commission pursuant to Rule 424(b) of
the Rules and Regulations. The term “ Prospectus
” as used in this Agreement means the Prospectus, in the form
in which it is to be filed with the Commission pursuant to Rule
424(b) of the Rules and Regulations, or, if the Prospectus is not
to be filed with the Commission pursuant to Rule 424(b), the
Prospectus in the form included as part of the Registration
Statement as of the Effective Date, except that if any revised
prospectus or prospectus supplement shall be provided to the
Representative by the Company for use in connection with the
offering and sale of the Shares which differs from the 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 “ Prospectus ”
shall refer to such revised prospectus or prospectus supplement, as
the case may be, from and after the time it is first provided to
the Representative 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(a) of
the Rules and Regulations is hereafter called a “
Preliminary Prospectus .” 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 and any reference herein to the
terms “amend,” “amendment,” or
“supplement” with respect to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include (i) the filing of any document
under the Exchange Act of 1934, as amended (the “ Exchange
Act ”), after the Effective Date, the date of such
Preliminary Prospectus or the date of the Prospectus, as the case
may be, which is incorporated by reference in the Registration
Statement, any Preliminary Prospectus or the Prospectus and
(ii) any such document so filed and incorporated by reference.
If the Company has filed an abbreviated registration statement to
register additional Shares pursuant to Rule 462(b) under the Rules
and Regulations (the “ 462(b) Registration Statement
”), then any reference herein to the Registration Statement
shall also be deemed to include such 462(b) Registration
Statement.
(b) As of the Applicable Time (as
defined below) and as of the Closing Date, neither (i) any
General Use Free Writing Prospectus (as defined below) issued at or
prior to the Applicable Time, and the Pricing Prospectus (as
defined below), all considered together (collectively, the “
General Disclosure Package ”), (ii) any
individual Limited Use Free Writing Prospectus (as defined below),
nor (iii) any bona fide electronic road show (as defined in
Rule 433(h)(5) of the Rules and Regulations that has been made
available without restriction to any person), when considered
together with the General Disclosure Package, included or will
include, any untrue statement of a material fact or omitted or as
of the Closing Date
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will omit, to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
provided, however , that the Company makes no
representations or warranties as to information contained in or
omitted from any Issuer Free Writing Prospectus (as defined below),
in reliance upon, and in conformity with, written information
furnished to the Company through the Representative by or on behalf
of any Placement Agent specifically for inclusion therein, which
information the parties hereto agree is limited to the Placement
Agents’ Information (as defined in Section 18) .
As used in this paragraph (a) and elsewhere in this
Agreement:
“Applicable Time” means
5:00 P.M., New York time, on the date of this Agreement.
“Pricing Prospectus”
means the Preliminary Prospectus, if any, and the Base Prospectus,
each as amended and supplemented immediately prior to the
Applicable Time, including any document incorporated by reference
therein and any prospectus supplement deemed to be a part
thereof.
“Issuer Free Writing
Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 of the Rules and
Regulations relating to the Shares in the form filed or required to
be filed with the Commission or, if not required to be filed, in
the form retained in the Company’s records pursuant to Rule
433(g) of the Rules and Regulations.
“General Use Free Writing
Prospectus” means any Issuer Free Writing Prospectus that is
identified on Schedule A to this Agreement.
“Limited Use Free Writing
Prospectuses” means any Issuer Free Writing Prospectus that
is not a General Use Free Writing Prospectus.
(c) No order preventing or
suspending the use of any Preliminary Prospectus, any Issuer Free
Writing Prospectus or the Prospectus relating to the proposed
offering of the Shares has been issued by the Commission, and no
proceeding for that purpose or pursuant to Section 8A of the
Securities Act has been instituted or, to the Company’s
Knowledge, threatened by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Securities Act and the
Rules and Regulations, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading; provided, however , that the Company makes no
representations or warranties as to information contained in or
omitted from any Preliminary Prospectus, in reliance upon, and in
conformity with, written information furnished to the Company
through the Representative by or on behalf of any Placement Agent
specifically for inclusion therein, which information the parties
hereto agree is limited to the Placement Agents’ Information
(as defined in Section 18 ).
(d) At the time the Registration
Statement became or becomes effective, at the date of this
Agreement and at the Closing Date, the Registration Statement
conformed and will conform in all material respects to the
requirements of the Securities 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 light of
the circumstances under which they were made, not misleading; the
Prospectus, at the time the Prospectus was issued and at the
Closing Date, conformed and will conform in all material respects
to the requirements of the Securities Act and the Rules
and
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Regulations and did not and will not
contain an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading; provided , however , that the foregoing
representations and warranties in this paragraph (c) shall not
apply to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon, and in conformity
with, written information furnished to the Company through the
Representative by or on behalf of any Placement Agent specifically
for inclusion therein, which information the parties hereto agree
is limited to the Placement Agents’ Information (as defined
in Section 18 ).
(e) Each Issuer Free Writing
Prospectus, if any, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the
Shares or until any earlier date that the Company notified or
notifies the Representative as described in
Section 5(I)(e) , did not, does not and will not
include any information that conflicted, conflicts or will conflict
with the information contained in the Registration Statement,
Pricing Prospectus or the Prospectus, including any document
incorporated by reference therein and any prospectus supplement
deemed to be a part thereof that has not been superseded or
modified, or includes an untrue statement of a material fact or
omitted or would omit 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 prevailing at the
subsequent time, not misleading. The foregoing sentence does not
apply to statements in or omissions from any Issuer Free Writing
Prospectus in reliance upon, and in conformity with, written
information furnished to the Company through the Representative by
or on behalf of any Placement Agent specifically for inclusion
therein, which information the parties hereto agree is limited to
the Placement Agents’ Information (as defined in
Section 18 ).
(f) 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, and the rules and regulations of the
Commission thereunder and none of such documents contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make
the statements therein not misleading; and any further documents so
filed and incorporated by reference in 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 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 not
misleading.
(g) The Company has not, directly or
indirectly, distributed and will not distribute any offering
material in connection with the offering and sale of the Shares
other than any Preliminary Prospectus, the Prospectus and other
materials, if any, permitted under the Securities Act and
consistent with Section 5(I)(b) below. The Company will
file with the Commission all Issuer Free Writing Prospectuses
(other than a “road show,” as described in Rule
433(d)(8) of the Rules and Regulations), if any, in the time and
manner required under Rules 163(b)(2) and 433(d) of the Rules and
Regulations.
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(h) The Company is existing as a
corporation in Delaware and each of its subsidiaries (as defined in
Section 16 ) have been duly incorporated and are
validly existing as corporations or other legal entities in good
standing (or the foreign equivalent thereof) under the laws of
their respective jurisdictions of organization. The Company and
each of its subsidiaries are duly qualified to do business and are
in good standing as foreign corporations or other legal entities in
each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses require such
qualification and have all power and authority (corporate or other)
necessary to own or hold their respective properties and to conduct
the businesses in which they are engaged, except where the failure
to so qualify or have such power or authority (i) would not
have, singularly or in the aggregate, a material adverse effect on
the condition (financial or otherwise), results of operations,
assets, business or prospects of the Company and its subsidiaries
taken as a whole, or (ii) impair in any material respect the
ability of the Company to perform its obligations under this
Agreement or to consummate any transactions contemplated by the
Agreement, the General Disclosure Package or the Prospectus (any
such effect as described in clauses (i) or (ii), a “
Material Adverse Effect ”). The Company has disclosed
to the Representative each corporation, partnership, limited
liability partnership, limited liability company, association or
other entity owned or controlled, directly or indirectly, by the
Company.
(i) The Company has the full right,
power and authority to enter into this Agreement, 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 this Agreement,
each of the Subscription Agreements and the Escrow Agreement has
been duly authorized, executed and delivered by the Company, and
constitutes a valid and binding obligation of the Company
enforceable in accordance with its terms.
(j) The Shares to be issued and sold
by the Company to the Purchasers under the Subscription Agreements
have been duly and validly authorized and, when issued and
delivered against payment therefor, will be duly and validly
issued, fully paid and nonassessable and free of any preemptive or
similar rights and will conform to the description thereof
contained in the General Disclosure Package and the
Prospectus.
(k) The Company has an authorized
capitalization as set forth in the Pricing Prospectus, and all of
the issued shares of capital stock of the Company have been duly
and validly authorized and issued, are fully paid and
non-assessable, have been issued in compliance with United States
Federal and state securities laws, and conform to the description
thereof contained in the General Disclosure Package and the
Prospectus. As of December 6, 2006, there were 25,375,861
shares of Common Stock issued and outstanding and 2,679,708 shares
of Common Stock were issuable upon the exercise of all options,
warrants and convertible securities outstanding as of such date.
Since such date, the Company has not issued any securities, other
than Common Stock of the Company issued pursuant to the exercise of
warrants previously outstanding or stock options previously
outstanding under the Company’s stock option plans or the
issuance of restricted Common Stock pursuant to employee stock
purchase plans. All of the Company’s options, warrants and
other rights to purchase or exchange any securities for shares of
the Company’s capital stock have been duly authorized and
validly issued in compliance with U.S. federal and state securities
laws. None of the outstanding Common Stock were issued in violation
of
6
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
shares of capital stock, 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 any of its subsidiaries
other than those described above or accurately described in the
General Disclosure Package. The description of the Company’s
stock option, stock bonus and other stock plans or arrangements,
and the options or other rights granted thereunder, as described in
the General Disclosure Package and the Prospectus, accurately and
fairly present the information required to be shown therein with
respect to such plans, arrangements, options and rights.
(l) Except as previously disclosed
to the Representative, all the outstanding shares of capital stock
of each subsidiary of the Company have been duly authorized and
validly issued, are fully paid and nonassessable and, except to the
extent set forth in the General Disclosure Package or the
Prospectus, are owned by the Company directly or indirectly through
one or more wholly-owned subsidiaries, free and clear of any claim,
lien, encumbrance, security interest, restriction upon voting or
transfer or any other claim of any third party.
(m) 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 will not (with or without notice or
lapse of time or both) conflict with or result in a breach or
violation of any of the terms or provisions of, constitute a
default under, give rise to any right of termination or other right
or the cancellation or acceleration of any right or obligation or
loss of a benefit under, or give rise to the creation or imposition
of any lien, encumbrance, security interest, claim or charge upon
any property or assets of the Company or any subsidiary pursuant
to, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of
the Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the charter or
by-laws (or analogous governing instruments, as applicable) of the
Company or any of its subsidiaries or any law, statute, rule,
regulation, judgment, order or decree of any court or governmental
agency or body, domestic or foreign, having jurisdiction over the
Company or any of its subsidiaries or any of their properties or
assets.
(n) Except for the registration of
the Shares under the Securities Act and such consents, approvals,
authorizations, registrations or qualifications as may be required
under the Exchange Act and applicable state securities laws, the
National Association of Securities Dealers, Inc. (the “
NASD ”) and AMEX in connection with the offering and
sale of the Shares and the listing of the Shares on AMEX, no
consent, approval, authorization or order of, or filing,
qualification or registration (each an “ Authorization
”) with, any court, governmental or non-governmental agency
or body, foreign or domestic, which has not been made, obtained or
taken and is not in full force and effect, is required for the
execution, delivery and performance of this Agreement by the
Company, the offer or sale of the Stock or the consummation of the
transactions contemplated hereby or thereby; and no event has
occurred that allows or results in, or after notice or lapse
of
7
time or both would allow or result
in, revocation, suspension, termination or invalidation of any such
Authorization or any other impairment of the rights of the holder
or maker of any such Authorization. All corporate approvals
(including those of stockholders) necessary for the Company to
consummate the transactions contemplated by this Agreement have
been obtained and are in effect.
(o) Singer Lewak
Greenbaum & Goldstein LLP, who have certified certain
financial statements and related schedules included or incorporated
by reference in the Registration Statement, the General Disclosure
Package and the Prospectus. Except as disclosed in the Registration
Statement and as pre-approved in accordance with the requirements
set forth in Section 10A of the Exchange Act, Singer Lewak
Greenbaum & Goldstein LLP has not been engaged by the
Company to perform any “prohibited activities” (as
defined in Section 10A of the Exchange Act).
(p) The financial statements,
together with the related notes and schedules, included or
incorporated by reference in the General Disclosure Package, the
Prospectus and in the Registration Statement fairly present, the
financial position and the results of operations and changes in
financial position of the Company and its consolidated subsidiaries
and other consolidated entities at the respective dates or for the
respective periods therein specified. Such statements and related
notes and schedules have been prepared in accordance with generally
accepted accounting principles in the United States (“
GAAP ”) applied on a consistent basis throughout the
periods involved except as may be set forth in the related notes
included or incorporated by reference in the General Disclosure
Package. The financial statements, together with the related notes
and schedules, included or incorporated by reference in the General
Disclosure Package and the Prospectus comply in all material
respects with Regulation S-X as in effect on the respective dates
thereof. No other financial statements or supporting schedules or
exhibits are required by Regulation S-X to be described, or
included or incorporated by reference in the Registration
Statement, the General Disclosure Package or the Prospectus. There
is no pro forma or as adjusted financial information which is
required to be included in the Registration Statement, the General
Disclosure Package, or and the Prospectus or a document
incorporated by reference therein in accordance with Regulation S-X
which has not been included or incorporated as so required. The
summary and selected financial data included or incorporated by
reference in the General Disclosure Package, the Prospectus and
each Registration Statement fairly present the information shown
therein as at their respective dates and for the respective periods
specified and are derived from the consolidated financial
statements set forth or incorporated by reference from the
Registration Statement, the Pricing Prospectus and the Prospectus
and other financial information. All information contained in the
Registration Statement, the General Disclosure Package and the
Prospectus regarding “non-GAAP financial measures” (as
defined in Regulation G) complies with Regulation G and
Item 10 of Regulation S-K, to the extent possible.
(q) Neither the Company nor any of
its subsidiaries has sustained, since the date of the latest
audited financial statements included or incorporated by reference
in the General Disclosure Package, 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
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the General Disclosure
Package; and,
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since such date, there has not been
any change in the capital stock or long-term debt of the Company or
any of its subsidiaries (other than issuances of shares of capital
stock upon exercise of presently outstanding stock options), or any
material adverse change, or any development involving a prospective
material adverse change, in or affecting the business, assets,
general affairs, management, financial position, prospects,
stockholders’ equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth
or contemplated in the General Disclosure Package.
(r) Except as set forth in the
General Disclosure Package, there is no legal or governmental
action, suit, claim or proceeding pending to which the Company or
any of its subsidiaries is a party or of which any property or
assets of the Company or any of its subsidiaries is the subject,
including any proceeding before the United States Food and Drug
Administration of the U.S. Department of Health and Human Services
(“ 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), which is required to be described
in the Registration Statement, the General Disclosure Package or
the Prospectus or a document incorporated by reference therein and
is not described therein, or which, singularly or in the aggregate,
if determined adversely to the Company or any of its subsidiaries,
could reasonably be expected to have a Material Adverse Effect or
prevent the consummation of the transactions contemplated hereby;
and to the Company’s knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others. The Company is in compliance with all
applicable federal, state, local and foreign laws, regulations,
orders and decrees governing its business as prescribed by the FDA,
or any other federal, state or foreign agencies or bodies with
jurisdiction over the activities of the Company engaged in the
regulation of pharmaceuticals or biohazardous substances or
materials, except where noncompliance would not, singly or in the
aggregate, have a Material Adverse Effect. All preclinical and
clinical studies conducted by or on behalf of the Company to
support approval for commercialization of the Company’s
products have been conducted by the Company, or to the best of the
Company’s knowledge after reasonable investigation and due
diligence inquiry (“ Knowledge ”), by third
parties, in compliance with all applicable federal, state or
foreign laws, rules, orders and regulations, except for such
failure or failures to be in compliance as could not reasonably be
expected to have, singly or in the aggregate, a Material Adverse
Effect.
(s) Neither the Company nor any of
its subsidiaries is in (i) violation of its charter or by-laws
(or analogous governing instrument, as applicable),
(ii) default in any respect, and no event has occurred which,
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, lease or other agreement or instrument to which it
is a party or by which it is bound or to which any of its property
or assets is subject (including, without limitation, those
administered by
9
the FDA or by any foreign, federal,
state or local governmental or regulatory authority with
jurisdiction over the activities of the Company performing
functions similar to those performed by the FDA) or
(iii) violation in any respect of any law, ordinance,
governmental rule, regulation or court order, decree or judgment to
which it or its property or assets may be subject except, in the
case of clauses (ii) and (iii) of this paragraph (s), for
any violations or defaults which, singularly or in the aggregate,
would not have a Material Adverse Effect.
(t) The Company and each of its
subsidiaries possess all licenses, certificates, authorizations and
permits issued by, and have made all declarations and filings with,
the appropriate local, state, federal or foreign regulatory
agencies or bodies (including, without limitation, those
administered by FDA or by any foreign, federal, state or local
governmental or regulatory authority with jurisdiction over the
activities of the Company performing functions similar to those
performed by the FDA) which are necessary or desirable for the
ownership of their respective properties or the conduct of their
respective businesses as described in the General Disclosure
Package and the Prospectus (collectively, the “
Governmental Permits ”) except where any failures to
possess or make the same, singularly or in the aggregate, would not
have a Material Adverse Effect. The Company and its subsidiaries
are in compliance with all such Governmental Permits; all such
Governmental Permits are valid and in full force and effect, except
where the validity or failure to be in full force and effect would
not, singularly or in the aggregate, have a Material Adverse
Effect. All such Governmental Permits are free and clear of any
restriction or condition that are in addition to, or materially
different from those normally applicable to similar licenses,
certificates, authorizations and permits. Neither the Company nor
any subsidiary has received notification of any revocation,
modification, suspension, termination or invalidation (or
proceedings related thereto) of any such Governmental Permit and to
the Knowledge of the Company, no event has occurred that allows or
results in, or after notice or lapse of time or both would allow or
result in, revocation, modification, suspension, termination or
invalidation (or proceedings related thereto) of any such
Governmental Permit and the Company has no reason to believe that
any such Governmental Permit will not be renewed. The studies,
tests and preclinical or clinical trials conducted by or on behalf
of the Company that are described in the General Disclosure Package
and the Prospectus (the “ Company Studies and Trials
”) were and, if still pending, are being, conducted in all
material respects in accordance with experimental protocols,
procedures and controls pursuant to, where applicable, accepted
professional scientific standards; the descriptions of the results
of the Company Studies and Trials contained in the General
Disclosure Package and Prospectus are accurate in all material
respects; and the Company has not received any notices or
correspondence with the FDA or any foreign, state or local
governmental body exercising comparable authority requiring the
termination, suspension or material modification of any Company
Studies or Trials that termination, suspension or material
modification would reasonably be expected to have a Material
Adverse Effect.
(u) Neither the Company nor any of
its subsidiaries is or, after giving effect to the offering of the
Shares and the application of the proceeds thereof as described in
the General Disclosure Package and the Prospectus, will become an
“investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and
regulations of the Commission thereunder.
10
(v) Neither the Company, its
subsidiaries nor, to the Company’s Knowledge, any of the
Company’s or its subsidiaries’ officers or directors
has taken or will take, directly or indirectly, any action designed
or intended to stabilize or manipulate the price of any security of
the Company, or which caused or resulted in, or which might in the
future reasonably be expected to cause or result in, stabilization
or manipulation of the price of any security of the
Company.
(w) The Company and its subsidiaries
own or possess the valid right to use all (i) valid and
enforceable patents, patent applications, trademarks, trademark
registrations, service marks, service mark registrations, Internet
domain name registrations, copyrights, copyright registrations,
licenses, trade secret rights (“ Intellectual Property
Rights ”) and (ii) inventions, software, works of
authorship, trade marks, service marks, trade names, databases,
formulae, know how, Internet domain names and other intellectual
property (including trade secrets and other unpatented and/or
unpatentable or proprietary confidential information, systems, or
procedures) (collectively, “ Intellectual Property
Assets ”), which Intellectual Property Rights and
Intellectual Property Assets are owned by, or licensed to, the
Company and its subsidiaries and are necessary to conduct their
respective businesses as currently conducted, and as proposed to be
conducted and described in the General Disclosure Package and the
Prospectus. The Company and its subsidiaries have not received any
opinion from their legal counsel concluding that any activities of
their respective businesses infringe, misappropriate, or otherwise
violate, valid and enforceable Intellectual Property Rights of any
other person, and have not received written notice of any
challenge, which is to their Knowledge still pending, by any other
person to the rights of the Company and its subsidiaries with
respect to any Intellectual Property Rights or Intellectual
Property Assets owned or used by the Company or its subsidiaries.
To the Knowledge of the Company, the Company and its
subsidiaries’ respective businesses as now conducted do not
give rise to any infringement of, any misappropriation of, or other
violation of, any valid and enforceable Intellectual Property
Rights of any other person. All licenses for the use of the
Intellectual Property Rights described in the General Disclosure
Package and the Prospectus are valid, binding upon, and enforceable
by or against the parties thereto in accordance to its terms. The
Company has complied in all material respects with, and is not in
breach nor has received any asserted or threatened claim of breach
of any Intellectual Property license, and the Company has no
Knowledge of any unresolved breach or anticipated breach by any
other person to any Intellectual Property license. Except as
described in the General Disclosure Package, no claim has been made
against the Company alleging the infringement by the Company of any
patent, trademark, service mark, trade name, copyright, trade
secret, license in or other intellectual property right or
franchise right of any person. The Company has taken all reasonable
steps to protect, maintain and safeguard its Intellectual Property
Rights, including the execution of appropriate nondisclosure and
confidentiality agreements. The consummation of the transactions
contemplated by this Agreement will not result in the loss or
impairment of or payment of any additional amounts with respect to,
nor require the consent of any other person in respect of, the
Company’s right to own, use, or hold for use any of the
Intellectual Property Rights as owned, used or held for use in the
conduct of the business as currently conducted.
11
To the Knowledge of the Company, all
patent applications filed by the Company and its subsidiaries for
all inventions owned by or licensed to the Company and its
subsidiaries that are material to the conduct of the businesses of
the Company and its subsidiaries, each in the manner in which it
has been and is contemplated to be conducted as described in the
Prospectus, have been duly and properly filed or caused to be filed
with the United States Patent and Trademark Office (“
PTO” ) to the extent required and, in the case of one
pending patent application, applicable foreign and international
patent authorities. To the Knowledge of the Company, assignments
for all patents and patent applications, including, without
limitation any continuations, divisionals, continuations-in-part,
renewals, reissues and applications for registration, to the extent
such assignments are required for any such filing, of any of the
foregoing owned by or licensed to the Company and its subsidiaries
(collectively, the “ Patents” ) that are
material to the conduct of the businesses of the Company and its
subsidiaries each in the manner in which it has been and is
contemplated to be conducted as described in the Prospectus, have
been properly executed and recorded for each named inventor; except
where such failure would not reasonably be expected to have a
Material Adverse Effect. To the Knowledge of the Company, all
printed publications and patent references material to the
patentability of the inventions claimed in the Patents have been
disclosed, or are scheduled to be disclosed, to those patent
offices so requiring in the time periods required. To the Knowledge
of the Company, each of the Company, the subsidiaries, and their
assignors or licensors, as applicable, has met its duty of candor
and good faith to the PTO for the Patents. To the Knowledge of the
Company, no material misrepresentation has been made to any patent
office in connection with the Patents. The Company is not aware of
any facts material to a determination of patentability regarding
the Patents of which it was aware that was not disclosed to the PTO
or other applicable patent office. The Company is not aware of any
facts not disclosed to the PTO or other applicable patent office
that would preclude the patentability, validity or enforceability
of any patent or patent application in the Patents. The Company has
no Knowledge of any facts that would preclude the Company or any
licensors, as applicable, from having clear sole or joint title to
the patents and patent applications in the Patents.
(x) The Company and each of its
subsidiaries have good and marketable title in fee simple to, or
have valid rights to lease or otherwise use, all items of real or
personal property which are material to the business of the Company
and its subsidiaries taken as a whole, in each case free and clear
of all liens, encumbrances, security interests, claims and defects
that do not, singularly or in the aggregate, materially affect the
value of such property and do not interfere with the use made and
proposed to be made of such property by the Company or any of its
subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one
enterprise, and under which the Company or any of its subsidiaries
hold properties described in the General Disclosure Package and the
Prospectus, are in full force and effect, and neither the Company
nor any subsidiary has received any notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of
the Company or any subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the
leased or subleased premises under any such lease or
sublease.
12
(y) There is (A) no significant
unfair labor practice complaint pending against the Company, or any
of its subsidiaries, nor, to the Knowledge of the Company,
threatened against it or any of its subsidiaries, before the
National Labor Relations Board, any state or local labor relation
boards or any foreign labor relations board, and no significant
grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the
Company or any of its subsidiaries, or, to the Knowledge of the
Company, threatened against it and (B) no labor disturbance by
the employees of the Company or any of its subsidiaries exists or,
to the Company’s Knowledge, is imminent, and the Company is
not aware of any existing or imminent labor disturbance by the
employees of any of its or its subsidiaries principal suppliers,
manufacturers, customers or contractors, that could reasonably be
expected, singularly or in the aggregate, to have a Material
Adverse Effect. The Company is not aware that any key employee or
significant group of employees of the Company or any subsidiary
plans to terminate employment with the Company or any such
subsidiary.
(z) No “prohibited
transaction” (as defined in Section 406 of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder
(“ERISA”), or Section 4975 of the Internal Revenue
Code of 1986, as amended from time to time (the
“Code”)) or “accumulated funding
deficiency” (as defined in Section 302 of ERISA) or any
of the events set forth in Section 4043(b) of ERISA (other
than events with respect to which the thirty (30)-day notice
requirement under Section 4043 of ERISA has been waived) has
occurred or could reasonably be expected to occur with respect to
any employee benefit plan of the Company or any of its subsidiaries
which could, singularly or in the aggregate, have a Material
Adverse Effect. Each employee benefit plan of the Company or any of
its subsidiaries is in compliance in all material respects with
applicable law, including ERISA and the Code. The Company and its
subsidiaries have not incurred and could not reasonably be expected
to incur liability under Title IV of ERISA with respect to the
termination of, or withdrawal from, any pension plan (as defined in
ERISA). Each pension plan for which the Company or any of its
subsidiaries would have any liability that is intended to be
qualified under Section 401(a) of the Code is so qualified,
and nothing has occurred, whether by action or by failure to act,
which could, singularly or in the aggregate, cause the loss of such
qualification.
(aa) The Company and its
subsidiaries are in compliance with all applicable United States,
foreign, federal, state, and local rules, laws and regulations
relating to the use, treatment, storage and disposal of hazardous
or toxic substances or waste and protection of health and safety or
the environment which are applicable to their businesses (“
Environmental Laws ”). There has been no storage,
generation, transportation, handling, treatment, disposal,
discharge, emission, or other release of any kind of toxic or other
wastes or other hazardous substances by, due to, or caused by the
Company or any of its subsidiaries (or, to the Company’s
Knowledge, any other entity for whose acts or omissions the Company
or any of its subsidiaries is or may otherwise be liable) upon any
of the property now or previously owned or leased by the Company or
any of its subsidiaries, or upon any other property, in violation
of any law, statute, ordinance, rule, regulation, order,
13
judgment, decree or permit or which
would, under any law, statute, ordinance, rule (including rule of
common law), regulation, order, judgment, decree or permit, give
rise to any liability; and there has been no disposal, discharge,
emission or other release of any kind onto such property or into
the environment surrounding such property of any toxic or other
wastes or other hazardous substances with respect to which the
Company or any of its subsidiaries has Knowledge, except for any
such disposal, discharge, emission, or other release of any kind
which would not have, singularly or in the aggregate with all such
discharges and other releases, a Material Adverse
Effect.
(bb) The Company and each of its
subsidiaries (i) have timely filed all necessary U.S. federal,
state, local and foreign tax returns, and all such returns were
true, complete and correct, (ii) have paid all federal, state,
local and foreign taxes, assessments, governmental or other charges
due and payable for which they are liable, including, without
limitation, all sales and use taxes and all taxes which the Company
or any of its subsidiaries is obligated to withhold from amounts
owing to employees, creditors and third parties, and (iii) do
not have any tax deficiency or claims outstanding or assessed or,
to its Knowledge, proposed against any of them, except those, in
each of the cases described in clauses (i), (ii) and
(iii) of this paragraph (aa), that would not, singularly or in
the aggregate, have a Material Adverse Effect. Neither the Company
nor any of its subsidiaries has engaged in any transaction which is
a corporate tax shelter or which could be characterized as such by
the Internal Revenue Service or any other taxing authority. The
accruals and reserves on the books and records of the Company and
its subsidiaries in respect of tax liabilities for any taxable
period not yet finally determined are adequate to meet any
assessments and related liabilities for any such period, and since
December 1, 2006, neither the Company nor any of its
subsidiaries has incurred any liability for taxes other than in the
ordinary course.
(cc) The Company and each of its
subsidiaries carry, or are covered by, insurance in such amounts
and covering such risks as is adequate for the conduct of their
respective businesses and the value of their respective properties
and as is customary for companies of a similar size engaged in
similar businesses in similar industries. Neither the Company nor
any of its subsidiaries has any reason to 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 would not have a Material Adverse Effect. All policies of
insurance owned by the Company or any of its subsidiaries are, to
the Company’s Knowledge, in full force and effect and the
Company and its subsidiaries are in compliance with the terms of
such policies. Neither the Company nor any of its subsidiaries has
received written notice from any insurer, agent of such insurer or
the broker of the Company or any of its subsidiaries that any
material capital improvements or any other material expenditures
(other than premium payments) are required or necessary to be made
in order to continue such insurance. Neither the Company nor any of
its subsidiaries insure risk of loss through any captive insurance,
risk retention group, reciprocal group or by means of any fund or
pool of assets specifically set aside for contingent liabilities
other than as described in the General Disclosure
Package.
(dd) The Company and each of its
subsidiaries maintains a system of internal control over financial
reporting (as such term is defined in Rule 13a-15 of the General
Rules and Regulations under the Exchange Act (the “Exchange
Act Rules”)) that complies with the requirements of the
Exchange Act and has been designed by the Company’s principal
executive officer and principal financial officer, or under their
supervision, to provide reasonable assurances that
(i) transactions are
14
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 GAAP and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
The Company’s internal control over financial reporting is
effective. Except as described in the General Disclosure Package,
since the end of the Company’s most recent audited fiscal
year, there has been (A) no material weakness in the
Company’s internal control over financial reporting (whether
or not remediated) and (B) no change in the Company’s
internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting. The
Company’s internal control over financial reporting is
overseen by the Audit Committee of the Board of Directors of the
Company (the “ Audit Committee ”) in accordance
with the Exchange Act Rules. The Company has not publicly disclosed
or reported to the Audit Committee or to the Board, and within the
next 90 days the Company does not reasonably expect to publicly
disclose or report to the Audit Committee or the Board, a
significant deficiency, material weakness, change in internal
control over financial reporting or fraud involving management or
other employees who have a significant role in the internal control
over financial reporting (each an “ Internal Control
Event ”), any violation of, or failure to comply with,
the U.S. Securities Laws, or any matter which, if determined
adversely, would have a Material Adverse Effect.
(ee) A member of the Audit Committee
has confirmed to the Chief Executive Officer, Chief Financial
Officer or General Counsel of the Company that, except as set forth
in the General Disclosure Package, the Audit Committee is not
reviewing or investigating, and neither the Company’s
independent auditors nor its internal auditors have recommended
that the Audit Committee review or investigate, (i) adding to,
deleting, changing the application of or changing the
Company’s disclosure with respect to, any of the
Company’s material accounting policies, (ii) any matter
which could result in a restatement of the Company’s
financial statements for any annual or interim period during the
current or prior three fiscal years, or (iii) any Internal
Control Event.
(ff) The Company and each of its
subsidiaries have made and keep books, records and accounts, which,
in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company and its
subsidiaries in all material respects.
(gg) The Company maintains
disclosure controls and procedures (as such term is defined in Rule
13a-15 of the Exchange Act Rules) that comply with the requirements
of the Exchange Act, such disclosure controls and procedures have
been designed to ensure that information required to be disclosed
by the Company and its subsidiaries is accumulated and communicated
to the Company’s management, including the Company’s
principal executive officer and principal financial officer by
others within those entities, and such disclosure controls and
procedures are effective.
15
(hh) The minute books of the Company
and each of its subsidiaries that would be a “significant
subsidiary” within the meaning of Rule 1-02(w) of Regulation
S-X (such a significant subsidiary of the Company, a “
Significant Subsidiary ”) have been made available to
the Placement Agents and counsel for the Placement Agents, and such
books (i) contain complete minutes of all meetings and actions
of the board of directors (including each board committee) and
shareholders of the Company (or analogous governing bodies and
interest holders, as applicable) and each of its Significant
Subsidiaries since the time of their respective incorporation or
organization through the date of the latest meeting and action, and
(ii) accurately in all material respects reflect all
transactions authorized in such minutes.
(ii) There is no franchise
agreement, lease, contract, or other agreement or document required
by the Securities Act or by the Rules and Regulations to be
described in the General Disclosure Package and in the Prospectus
or a document incorporated by reference therein or to be filed as
an exhibit to the Registration Statement or a document incorporated
by reference therein which is not so described or filed therein as
required; and all descriptions of any such franchise agreements,
leases, contracts, or other agreements or documents contained in
the General Disclosure Package and in the Prospectus or in a
document incorporated by reference therein are accurate and
complete descriptions of such documents in all material respects.
Other than as described in the General Disclosure Package, no such
franchise agreement, lease, contract or other agreement has been
suspended or terminated for convenience or default by the Company
or any of the other parties thereto, and neither the Company nor
any of its subsidiaries has received notice nor does the Company
have Knowledge of any such pending or threatened suspension or
termination.
(jj) No relationship, direct or
indirect, exists between or among the Company and any of its
subsidiaries on the one hand, and the directors, officers,
stockholders (or analogous interest holders), customers or
suppliers of the Company or any of its subsidiaries or any of their
affiliates on the other hand, which is required to be described in
the General Disclosure Package and the Prospectus or a document
incorporated by reference therein and which is not so described. No
person or entity has the right to require registration of Common
Stock or other securities of the Company or any of its subsidiaries
because of the filing or effectiveness of the Registration
Statement or otherwise, except for persons and entities who have
expressly waived such right in writing or who have been given
timely and proper written notice and have failed to exercise such
right within the time or times required under the terms and
conditions of such right. Except as described in the General
Disclosure Package, there are no persons with registration rights
or similar rights to have any securities registered by the Company
or any of its subsidiaries under the Securities Act.
(kk) Neither the Company nor any of
its subsidiaries owns any “margin securities” as that
term is defined in Regulation U of the Board of Governors of the
Federal Reserve System (the “ Federal Reserve Board
”), and none of the proceeds of the sale of the Shares will
be used, directly or indirectly, for the purpose of purchasing or
carrying any margin security, for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase
or carry any margin security or for any other purpose which might
cause any of the Shares to be considered a “purpose
credit” within the meanings of Regulations T, U or X of the
Federal Reserve Board.
16
(ll) Other than that certain
Engagement Letter dated November 17, 2006 between the Company
and the Representative, neither the Company nor any of its
subsidiaries is a party to any contract, agreement or understanding
with any person that would give rise to a valid claim against the
Company or the Placement Agents for a brokerage commission,
finder’s fee or like payment in connection with the offering
and sale of the Shares or any transaction contemplated to be
effected by this Agreement, the Registration Statement, the General
Disclosure Package or the Prospectus.
(mm) The exercise price of each
option issued under the Company’s stock option or other
employee benefit plans has been no less than the fair market value
of a Common Share as determined on the date of grant of such
option. All grants of options were validly issued and properly
approved by the board of directors of the Company (or a duly
authorized committee thereof)
