EXHIBIT 1.1
7,740,739 Shares
GTC BIOTHERAPEUTICS,
INC.
Shares of Common
Stock
($.01 par value)
PLACEMENT AGENT
AGREEMENT
January 21, 2005
SG COWEN & CO., LLC
1221 Avenue of the Americas
New York, New York 10020
Dear Sirs:
GTC Biotherapeutics, Inc., a
Massachusetts corporation (the “ Company ”),
proposes to issue and sell to the Purchasers, pursuant to the terms
of this Placement Agent Agreement (this “ Agreement
”) and the Subscription Agreements, in a form to be agreed
upon (the “ Subscription Agreements ”) and
entered into severally with the Purchasers that become parties
thereto (each a “ Purchaser ” and, collectively,
the “ Purchasers ”), an aggregate of 7,740,739
shares of Common Stock, $.01 par value (the “ Common
Stock ”), of the Company. The aggregate of 7,740,739
shares so proposed to be sold is hereinafter referred to as the
“ Stock .” The Company hereby confirms its
agreement with SG Cowen & Co., LLC (“ SG Cowen
”) as follows (certain capitalized terms used herein are
defined in Section 13 hereof):
1. AGREEMENT TO ACT AS PLACEMENT AGENT;
PLACEMENT OF SECURITIES .
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 SG
Cowen to act as its exclusive agent (in such capacity, the “
Placement Agent ”) to solicit offers for the purchase
of all or part of the Stock from the Company in connection with the
proposed offering of the Stock (the “ Offering
”). Until the Closing Date (as defined below), the Company
shall not, without the prior consent of the Placement Agent,
solicit or accept offers to purchase Stock otherwise than through
the Placement Agent.
(b) The Placement Agent agrees, as
agent of the Company, to use its best efforts to solicit offers to
purchase the Stock from the Company on the terms and subject to the
conditions set forth in the Base Prospectus (as defined below) and
the Prospectus Supplement (as defined below). The Placement Agent
shall make reasonable best efforts to assist the Company in
obtaining performance by each Purchaser whose offer to purchase
Stock has been solicited by the Placement Agent and accepted by the
Company, but the Placement Agent shall not, except as otherwise
provided in this Agreement, be
obligated to disclose the identity
of any potential purchaser or have any liability to the Company in
the event any such purchase is not consummated for any reason.
Under no circumstances will the Placement Agent be obligated to
purchase any Stock for its own account and, in soliciting purchases
of Stock, the Placement Agent shall act solely as the
Company’s agent and not as principal. Notwithstanding the
foregoing and except as otherwise provided in Section 1(c) ,
it is understood and agreed that the Placement Agent (or its
affiliates) may, solely at its discretion and without any
obligation to do so, purchase Stock as principal.
(c) Subject to the provisions of
this Section 1 , offers for the purchase of Stock may be
solicited by the Placement Agent as agent for the Company at such
times and in such amounts as the Placement Agent deems advisable.
The Placement Agent shall communicate to the Company, orally or in
writing, each reasonable offer to purchase Stock received by it as
agent of the Company. The Company shall have the sole right to
accept offers to purchase the Stock and may reject any such offer,
in whole or in part. The Placement Agent shall have the right, in
its discretion reasonably exercised, without notice to the Company,
to reject any offer to purchase Stock 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 Stock by
the Purchasers shall be evidenced by the execution of the
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 Agent by wire transfer of immediately available funds to
an account or accounts designated by the Placement Agent, an amount
equal to six percent (6.0%) of the gross proceeds received by the
Company from the sale of the Stock on such Closing Date.
(f) No Stock that 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
Stock shall have been delivered to the Purchaser thereof against
payment by such Purchaser. If the Company shall default in its
obligation to deliver Stock to a Purchaser whose offer it has
accepted, the Company shall indemnify and hold the Placement Agent
harmless against any loss, claim or damage arising from or as a
result of such default by the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY. The Company
represents and warrants to, and agrees with, the Placement Agent
that:
(a) The Company has filed with the
Securities and Exchange Commission (the “ Commission
”) a registration statement on Form S-3 (Registration File
No. 333-111464) under the Securities Act of 1933, as amended (the
“ Securities Act ”), which became effective on
January 9, 2004, for the registration under the Securities Act of
the Stock. At the time of such filing, the Company met the
requirements of Form S-3 under the Securities Act. Such
registration statement meets the requirements set forth in
Rule
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415(a)(1)(x) under the Securities
Act and complies with said Rule. The Company will file with the
Commission pursuant to Rule 424(b) under the Securities Act, and
the rules and regulations (the “ Rules and Regulations
”) of the Commission promulgated thereunder, a supplement to
the form of prospectus included in such registration statement
relating to the placement of the Stock and the plan of distribution
thereof and has advised the Placement Agent of all further
information (financial and other) with respect to the Company
required to be set forth therein. Such registration statement,
including the exhibits thereto, as amended at the date of this
Agreement, is hereinafter called the “ Registration
Statement ”; such prospectus in the form in which it
appears in the Registration Statement is hereinafter called the
“ Base Prospectus ”; and the supplemented form
of prospectus, in the form in which it will be filed with the
Commission pursuant to Rule 424(b) (including the Base Prospectus
as so supplemented) is hereinafter called a “ Prospectus
Supplement .” Any reference in this Agreement to the
Registration Statement, the Base Prospectus or the Prospectus
Supplement shall be deemed to refer to and include the documents
incorporated by reference therein (the “ Incorporated
Documents ”) pursuant to Item 12 of Form S-3 which were
filed under the Securities Exchange Act of 1934, as amended (the
“ Exchange Act ”), on or before the date of this
Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be; and any reference in
this Agreement to the terms “amend,”
“amendment” or “supplement” with respect to
the Registration Statement, the Base Prospectus or the Prospectus
Supplement shall be deemed to refer to and include the filing of
any document under the Exchange Act after the date of this
Agreement, or the issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be, deemed to be
incorporated therein by reference. All references in this Agreement
to financial statements and schedules and other information which
is “contained,” “included,”
“described,” “referenced,” “set
forth” or “stated” in the Registration Statement,
the Base Prospectus or the Prospectus Supplement (and all other
references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration
Statement, the Base Prospectus or the Prospectus Supplement, as the
case may be. No stop order suspending the effectiveness of the
Registration Statement or the use of the Base Prospectus or the
Prospectus Supplement has been issued, and no proceeding for any
such purpose is pending or has been initiated or, to the
Company’s knowledge, is threatened by the
Commission.
(b) The Registration Statement (and
any further documents to be filed with the Commission on or prior
to the Closing Date) contains all exhibits and schedules as
required by the Securities Act. Each of the Registration Statement
and any post-effective amendment thereto, at the time it became
effective, complied in all material respects with the Securities
Act and the Exchange Act and the applicable Rules and Regulations
and did not and, as amended or supplemented, if applicable, will
not, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. The Base Prospectus and
the Prospectus Supplement, each as of its respective date, comply
in all material respects with the Securities Act and the Exchange
Act and the
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applicable Rules and Regulations.
Each of the Base Prospectus and the Prospectus Supplement, as
amended or supplemented, did not and will not contain as of the
date thereof any 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. The Incorporated Documents, when they were filed
with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the applicable Rules and
Regulations, and none of such documents, when they were filed with
the Commission, contained any untrue statement of a material fact
or omitted to state a material fact necessary to make the
statements therein (with respect to Incorporated Documents
incorporated by reference in the Base Prospectus or Prospectus
Supplement, in light of the circumstances under which they were
made) not misleading; and any further documents so filed and
incorporated by reference in the Base Prospectus or Prospectus
Supplement, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the
Exchange Act and the applicable Rules and Regulations, as
applicable, and will not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading. Notwithstanding the foregoing, the
Company makes no representations or warranties as to information,
if any, contained in or omitted from the Prospectus Supplement or
any amendment thereof or supplement thereto in reliance upon and in
conformity with information furnished in writing to the Company by
or on behalf of the Placement Agent specifically for use in the
Registration Statement or the Prospectus Supplement, which
information the parties hereto agree is limited to the Placement
Agent’s Information as defined in Section 15 . No
post-effective amendment to the Registration Statement reflecting
any facts or events arising after the date thereof which represent,
individually or in the aggregate, a fundamental change in the
information set forth therein is required to be filed with the
Commission. There are no documents required to be filed with the
Commission in connection with the transaction contemplated hereby
that (x) have not been filed as required pursuant to the Securities
Act or (y) will not be filed within the requisite time period.
There are no contracts or other documents required to be described
in the Base Prospectus or Prospectus Supplement, or to be filed as
exhibits or schedules to the Registration Statement, which have not
been described or filed as required.
(c) The Company has delivered, or
will as promptly as practicable deliver, to the Placement Agent a
complete conformed copy of the Registration Statement and of each
consent and certificate of experts, as applicable, filed as a part
thereof, and such conformed copies of the Registration Statement
(without exhibits) and the Base Prospectus and the Prospectus
Supplement, as amended or supplemented, in such quantities and at
such places as the Placement Agent reasonably requests. Neither the
Company nor any of its directors and officers has distributed and
none of them will distribute, prior to the Closing Date, any
offering material in connection with the offering and sale of the
Stock other than the Base Prospectus, the Prospectus Supplement,
the Registration Statement, copies of the documents incorporated by
reference therein and any other materials permitted by the
Securities Act.
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(d) The Company has been duly
organized and are validly existing as corporations or other legal
entities in good standing (or the equivalent thereof, if any) under
the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing (or the
equivalent thereof, if any) as foreign corporations in each
jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires
such qualification, and have all power and authority necessary to
own or hold their respective properties and to conduct the
businesses in which they are engaged, except where the failure to
be so qualified and in good standing or have such power or
authority would not have, singularly or in the aggregate, a
material adverse effect on the condition (financial or otherwise),
results of operations, business, properties or prospects of the
Company and its subsidiaries taken as a whole (a “
Material Adverse Effect ”).
(e) The Stock to be issued and sold
by the Company hereunder and under the Subscription Agreements has
been duly and validly authorized and, when issued and delivered
against payment therefor as provided herein, will be duly and
validly issued, fully paid and nonassessable and free of any
preemptive or similar rights. The Stock conforms to the description
thereof contained in the Base Prospectus and the Prospectus
Supplement.
(f) The Company has an authorized
capitalization as set forth in the Base Prospectus and the
Prospectus Supplement. All of the issued and outstanding 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 federal and state securities laws, and conform to
the description thereof contained in the Base Prospectus and the
Prospectus Supplement. None of the outstanding shares of Common
Stock was 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 any of its subsidiaries that have been granted by the
Company other than those referenced in the Base Prospectus and the
Prospectus Supplement. 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
Base Prospectus and the Prospectus Supplement accurately and fairly
present the information required to be shown with respect to such
plans, arrangements, options and rights.
(g) [Intentionally
Omitted.]
(h) The Company has the full right,
power and authority to enter into this Agreement and each of the
Subscription Agreements and to perform and to discharge its
obligations hereunder and thereunder; and each of this Agreement
and each of the Subscription Agreements 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
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terms, except as limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting the enforcement of
creditors’ rights generally and (ii) general principles of
equity, regardless of whether asserted in a proceeding at equity or
law, and except to the extent that the indemnification and
contribution provisions of Section 7 hereof may be limited by
federal or state securities laws and public policy considerations
in respect thereof.
(i) The execution, delivery and
performance of this Agreement and the Subscription Agreements by
the Company and the consummation of the transactions contemplated
hereby and thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a
default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is
a party or by which the Company is bound or to which any of the
property or assets of the Company is subject, nor will such actions
result in any violation of the provisions of the charter or by-laws
of the Company or any statute, law, rule or regulation or any
judgment, order or decree of any court or governmental agency or
body having jurisdiction over the Company or any of its properties
or assets, except for such breach, violation or default that,
singularly or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.
(j) There is no franchise, contract,
lease, instrument or other document of a character required by the
Securities Act or the Rules and Regulations to be described in the
Base Prospectus and the Prospectus Supplement, or to be filed as an
exhibit to the Registration Statement, which is not described or
filed as required; and all statements summarizing any such
franchises, contracts, leases, instruments or other documents
contained in the Registration Statement fairly present the
information required to be shown with respect thereto. Other than
as described in the Base Prospectus and the Prospectus Supplement,
no such franchise, contract, lease, instrument or other document
has been suspended or terminated for convenience or default by the
Company or any of the other parties thereto, and the Company has
not received notice or any other knowledge of any such pending or
threatened suspension or termination, except for such pending or
threatened suspensions or terminations that would not reasonably be
expected to, singularly or in the aggregate, have a Material
Adverse Effect.
(k) All existing minute books of the
Company, including all existing records of all meetings and actions
of the board of directors (including, Audit, Compensation,
Nominating and Governance and other board committees) and
stockholders of the Company through the date of the latest meeting
and action (collectively, the “ Corporate Records
”) have been made available to the Placement Agent and
counsel for the Placement Agent. All such Corporate Records are
complete and accurately reflect, in all material respects, all
transactions referred to in such Corporate Records. There are no
material transactions, agreements or other actions of the Company
that are not properly approved and/or recorded in the Corporate
Records.
(l) No consent, approval,
authorization, filing with or order of or registration with, any
court or governmental agency or body is required in
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connection with the transactions
contemplated herein and in the Subscription Agreements, except such
as have been obtained or made under the Securities Act or the
Exchange Act and such as may be required under the securities, or
blue sky, laws of any jurisdiction in connection with the offer and
sale of the Stock by the Company in the manner contemplated herein
and in the Base Prospectus and the Prospectus
Supplement.
(m) Except as described in the Base
Prospectus and the Prospectus Supplement, (i) no person has the
right, contractual or otherwise, to cause the Company to issue or
sell to it any shares of Common Stock or shares of any other
capital stock or other equity interests of the Company, (ii) no
person has any preemptive rights, resale rights, rights of first
refusal or other rights to purchase any shares of Common Stock or
shares of any other capital stock or other securities of the
Company, and (iii) except as provided herein, no person has the
right to act as an underwriter, placement agent or financial
advisor to the Company in connection with and as a result of the
offer and sale of the Stock, in the case of each of the foregoing
clauses (i), (ii) and (iii), whether as a result of the filing or
effectiveness of the Registration Statement or the sale of the
Stock as contemplated thereby or otherwise; no person has the
right, contractual or otherwise, to cause the Company to register
under the Securities Act any shares of Common Stock or shares of
any other capital stock or other securities of the Company, or to
include any such shares or interests in the Registration Statement
or the offering contemplated thereby, whether as a result of the
filing or effectiveness of the Registration Statement or the sale
of the Stock as contemplated thereby or otherwise, except for
persons and entities who have expressly waived such right or who
have been given timely and proper notice and have failed to
exercise such right within the time or times required under the
terms and conditions of such right, and the Company is not required
to file any registration statement for the registration of any
securities of any person or register any such securities pursuant
to any other registration statement filed by the Company under the
Securities Act for a period of at least 180 days after the date
hereof.
(n) The financial statements,
together with the related notes and schedules, of the Company
included in the Base Prospectus, the Prospectus Supplement or the
Registration Statement, or incorporated by reference therein, as
the case may be, present fairly the financial condition, results of
operations and cash flows of the Company and its consolidated
subsidiaries and other consolidated entities as of the dates and
for the periods indicated, comply in all material respects with the
Securities Act and the Rules and Regulations thereunder, and have
been prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved. No other financial statements or supporting schedules or
exhibits are required by the Securities Act or the Rules and
Regulations thereunder to be included in the Base Prospectus, the
Prospectus Supplement or the Registration Statement, or
incorporated by reference therein, as the case may be.
(o) Except as set forth in the Base
Prospectus and the Prospectus Supplement, there is no legal or
governmental proceeding pending to which the Company is a party or
of which any property or assets of the Company is
7
the subject which is required to be
described in the Base Prospectus or the Prospectus Supplement and
is not described therein, or which, singularly or in the aggregate,
if determined adversely to the Company, would have a Material
Adverse Effect or would prevent or adversely affect the ability of
the Company to perform its obligations under this Agreement; and to
the best of the Company’s knowledge, no such proceedings are
threatened or contemplated by governmental authorities or
threatened by others.
(p) The Company has good and
marketable title to all property (real and personal) described in
the Registration Statement, the Base Prospectus and the Prospectus
Supplement as being owned by the Company, free and clear of all
claims, liens, encumbrances, security interests, defects or
restrictions upon voting or transfer or any other claims of any
kind (“ Liens ”), except for (i) Liens disclosed
in the financial statements included in the Base Prospectus and
(ii) Liens that do not materially interfere with the use made or
proposed to be made of such property by the Company or that would
not have a Material Adverse Effect; all the property described in
the Registration Statement, the Base Prospectus and the Prospectus
Supplement as being held under lease by the Company is held thereby
under valid, subsisting and enforceable leases except where the
failure to be valid, subsisting or enforceable would not have a
Material Adverse Effect.
(q) The Company is not (i) in
violation of any provision of its charter or by-laws, (ii) in
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 of any indenture, contract, lease, mortgage, deed of
trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant 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, or (iii) in violation in any respect of any
statute, law, rule, regulation, ordinance, judgment, order or
decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company or any of its properties, as
applicable (including, without limitation, those administered by
the Food and Drug Administration of the U.S. Department of Health
and Human Services (the “ FDA ”) or by any
foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the
FDA), except, with respect to clauses (ii) and (iii), any
violations or defaults which, singularly or in the aggregate, would
not have a Material Adverse Effect.
(r) The contracts described in the
Company’s regular reports on Forms 10-K, 10-Q and 8-K as
filed by the Company with the Commission or incorporated by
reference therein that are material to the Company are in full
force and effect on the date hereof, and neither the Company nor,
to the Company’s knowledge, any other party to such contracts
is in breach of or default under any of such contracts except any
such breach or default which, singularly or in the aggregate, would
not have a Material Adverse Effect.
(s) The Company has fulfilled its
obligations, if any, under the minimum funding standards of Section
302 of the United States Employee Retirement
8
Income Security Act of 1974 (“
ERISA ”) and the regulations and published
interpretations thereunder with respect to each “plan”
(as defined in Section 3(3) of ERISA and such regulations and
published interpretations) in which employees of the Company are
eligible to participate and each such plan is in compliance in all
material respects with the presently applicable provisions of ERISA
and such regulations and published interpretations. No
“prohibited transaction” (as defined in Section 406 of
ERISA, or Section 4975 of the Internal Revenue Code of 1986, as
amended from time to time (the “ Code ”)) has
occurred with respect to any employee benefit plan which would have
a Material Adverse Effect. The Company has not incurred any unpaid
liability to the Pension Benefit Guaranty Corporation (other than
for the payment of premiums in the ordinary course) or to any such
plan under Title IV of ERISA. Each “pension plan” (as
defined in ERISA) for which the Company would have any liability
that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred,
whether by action or by failure to act, which could cause the loss
of such qualification.
(t) The Company has made all
filings, applications and submissions required by, and possesses
all approvals, licenses, certificates, certifications, clearances,
consents, exemptions, marks, notifications, orders, permits and
other authorizations issued by, the appropriate federal, state or
foreign regulatory authorities (including, without limitation, the
FDA, and any other foreign, federal, state or local government or
regulatory authorities performing functions similar to those
performed by the FDA) necessary to conduct its businesses
(collectively, “ Permits ”), except for such
Permits which the failure to obtain would not have a Material
Adverse Effect (the “ Immaterial Permits ”), and
is in compliance in all material respects with the terms and
conditions of all such Permits other than the Immaterial Permits
(the “ Required Permits ”); all of such Required
Permits held by the Company are valid and in full force and effect;
there is no pending or, to the Company’s knowledge,
threatened action, suit, claim or proceeding which may cause any
such Required Permit to be limited, revoked, cancelled, suspended,
modified or not renewed and the Company has not received any notice
of proceedings relating to the limitation, revocation,
cancellation, suspension, modification or non-renewal of any such
Required Permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect, whether or not arising from transactions
in the ordinary course of business, except as set forth in or
contemplated by the Base Prospectus or the Prospectus
Supplement.
(u) PricewaterhouseCoopers LLP, who
have certified certain financial statements of the Company and
delivered their report with respect to the audited consolidated
financial statements and schedules included in the Base Prospectus,
the Prospectus Supplement or the Registration Statement, or
incorporated by reference therein, as the case may be, are, to the
Company’s knowledge, independent public accountants with
respect to the Company within the meaning of the Securities Act and
the Rules and Regulations.
9
(v) The Company has filed all
foreign, federal, state and local tax returns that are required to
be filed or has requested extensions thereof (except in any case in
which the failure so to file would not have a Material Adverse
Effect and except as set forth in the Base Prospectus and the
Prospectus Supplement) and has paid all taxes required to be paid
by it and any other assessment, fine or penalty levied against it,
to the extent that any of the foregoing is due and payable, except
for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a Material Adverse
Effect and except as set forth in the Base Prospectus and the
Prospectus Supplement.
(w) The principal executive officer
and principal financial officer of the Company have made all
certifications required by the Sarbanes-Oxley Act of 2002 (the
“ Sarbanes-Oxley Act ”), and the rules and
regulations promulgated thereunder, and the statements contained in
any such certification are correct and comply as to form as of the
dates made. The Company maintains “disclosure controls and
procedures” (as defined in Rule 13a-14(c) under the Exchange
Act), and such controls and procedures are designed (i) to ensure
that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported, within the time
periods specified in the Commission’s rules and forms and
(ii) to ensure that information required to be disclosed by the
Company in the reports that it files or submits under the Exchange
Act is accumulated and communicated to the Company’s
management, including its principal executive officer and principal
financial officer, as appropriate to allow timely decisions
regarding required disclosure. The Company does not have any
material weaknesses in internal controls, and there has been no
fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal controls. The Company is otherwise in compliance in all
respects with all applicable effective provisions of the
Sarbanes-Oxley Act and the rules and regulations promulgated
thereunder by the Commission (and intends to comply upon
effectiveness with all applicable provisions that are not yet
effective).
(x) The Company maintains a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management’s general or specific authorizations; (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted
accounting principles and to maintain accountability of 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 the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(y) To the Company’s
knowledge, the Company (i) is in compliance in all material
respects with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human
health and safety, the environment or hazardous or toxic substances
or wastes, pollutants or contaminants (“ Environmental
Laws ”), (ii) has received and is in compliance with all
permits, licenses or other approvals required of it under
applicable
10
Environmental Laws to conduct its
business and (iii) has not received notice of any actual or
potential liability for the investigation or remediation of any
disposal or release of hazardous or toxic substances or wastes,
pollutants or contaminants, except where such non-compliance with
Environmental Laws, failure to receive required permits, licenses
or other approvals, or liability would not, individually or in the
aggregate, have a Material Adverse Effect, whether or not arising
from transactions in the ordinary course of business, except as set
forth in or contemplated by the Base Prospectus and the Prospectus
Supplement (exclusive of any supplement thereto). The Company has
not been named as a “potentially responsible party”
under the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended.
(z) To the Company’s
knowledge, there has been no storage, disposal, generation,
manufacture, refinement, transportation, handling or treatment of
medical wastes, toxic wastes, hazardous wastes or hazardous
substances by the Company (or, to the knowledge of the Company, any
of its predecessors in interest) at, upon or from any of the
property now or previously owned or leased by the Company in
violation of any applicable Environmental Law which would require
remedial action under any applicable Environmental Law, except for
any violation or remedial action which would not cause, singularly
or in the aggregate with all such violations and remedial actions,
a Material Adverse Effect; there has been no material spill,
discharge, leak, emission, injection, escape, dumping or release of
any kind onto such property or of any medical wastes, toxic wastes,
hazardous wastes or hazardous substances due to or caused by the
Company or with respect to which the Company had knowledge, except
for any such spill, discharge, leak, emission, injection, escapes,
dumpings or releases which would not cause or would not be
reasonably likely to cause, singularly or in the aggregate with all
such spills, discharges, leaks, emissions, injections, escapes,
dumpings or releases, a Material Adverse Effect; and the terms
“hazardous substances,” “toxic wastes,”
“hazardous wastes” and “medical wastes”
shall have the meanings specified in any applicable Environmental
Laws.
(aa) The Company owns, possesses,
licenses or has other rights to use all foreign and domestic
patents, patent applications, trade and service marks, trade and
service mark registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology, Internet domain names,
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 the
Base Prospectus and the Prospectus Supplement to be conducted.
Except as set forth in the Base Prospectus and the Prospectus
Supplement (i) to the Company’s knowledge, there are no
rights of third parties to any such Intellectual Property except
through licensing or cross-licensing agreements or where the
exercise of such rights would not result, singularly or in the
aggregate, in a Material Adverse Effect; (ii) to the
Company’s knowledge, there is no infringement by third
parties of any such Intellectual Property that is necessary and
material to the Company’s business as it is presently being
conducted; (iii) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by
others
11
challenging the Company’s
rights in or to any such Intellectual Property, and the Company is
unaware of any facts which would form a reasonable basis for any
such claim; (iv) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual
Property; (v) there is no pending or, to the Company’s
knowledge, threatened action, suit, proceeding or claim by others
that the Company infringe or otherwise violate 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; (vi) except as
described in the Base Prospectus and the Prospectus Supplement, to
the Company’s knowledge, there is no third-party U.S. patent
or published U.S. patent application which contains claims for
which an Interference Proceeding could be commenced against any
patent or patent application described in the Base Prospectus and
the Prospectus Supplement as being owned by or licensed to the
Company; and (vii) the Company has taken all steps reasonably
determined by the Company to be necessary to perfect its ownership
of and interest in the Intellectual Property.
(bb) The clinical, pre-clinical and
other studies and tests conducted by or on behalf of or sponsored
by the Company were and, if still pending, are being conducted in
accordance with all statutes, laws, rules and regulations, as
applicable (including, without limitation, those administered by
the FDA or by any foreign, federal, state or local governmental or
regulatory authority performing functions similar to those
performed by the FDA) except where the failure to comply with such
statutes, laws, rules or regulations would not result, singularly
or in the aggregate, in a Material Adverse Effect.
(cc) The Company complies with
applicable regulatory requirements (including, without limitation,
those administered by the FDA and any other relevant foreign,
federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA), except
where the failure to comply with such regulatory requirements would
not result, singularly or in the aggregate, in a Material Adverse
Effect.
(dd) The Company has not failed to
file with the applicable regulatory authorities (including, without
limitation, the FDA or any foreign, federal, state or local
governmental or regulatory authority performing functions similar
to those performed by the FDA) any filing, declaration, listing,
registration, report or submission in respect of which any such
failure would have a Material Adverse Effect; all such filings,
declarations, listings, registrations, reports or submissions were
in compliance in all material respects with applicable laws when
filed and no deficiencies with respect to such compliance have been
asserted by any applicable regulatory authority (including, without
limitation, the FDA or any foreign, federal, state or local
governmental or regulatory authority performing functions similar
to those performed by the FDA) with respect to any such filings,
declarations, listings, registrations, reports or
submissions.
(ee) No relationship, direct or
indirect, exists between or among the Company on the one hand and
the directors, officers, stockholders, customers
12
or suppliers of the Company on the
other hand which is required to be described in the Base Prospectus
and the Prospectus Supplement and which is not so
described.
(ff) Neither the Company nor any
other person associated with or acting on behalf of the Company
including, without limitation, any director, officer, agent or
employee of the Company or any of its subsidiaries, has, directly
or indirectly, while acting on behalf of the Company or any of its
subsidiaries (i) used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses, or
received or retained any funds, relating to political activity;
(ii) made any unlawful payment from corporate funds to, or received
or retained any unlawful funds from, foreign or domestic government
officials or employees or to or from foreign or domestic political
parties or campaigns; (iii) violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iv) made any other
unlawful payment or received or retained any other unlawful
funds.
(gg) The Company is not or, after
giving effect to the offering and sale of the Stock and the
application of the proceeds thereof as described in the Base
Prospectus and the Prospectus Supplement, will not become an
“investment company” as defined in the Investment
Company Act of 1940, as amended.
(hh) Other than as contemplated by
this Agreement, 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 Agent for a brokerage commission, finder’s fee or
like payment in connection with the offering and sale of the
Stock.
(ii) The Company has not sustained,
since the date of the latest audited financial statements included
in the Prospectus Supplement, any material loss or interference
with its business from fire, explosion, flood, terrorist act 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 in or contemplated by the Prospectus
Supplement.
(jj) Except as set forth in or as
otherwise contemplated by the Registration Statement, the Base
Prospectus or the Prospectus Supplement, subsequent to the
respective dates as of which information is given in the
Registration Statement, the Base Prospectus and the Prospectus
Supplement, there has not been (i) any adverse change or
development that would reasonably be expected to result in a
Material Adverse Effect, (ii) any transaction which is material to
the Company, (iii) any obligation, direct or contingent (including
any off-balance sheet obligations), incurred by the Company outside
the ordinary course of business, which is material to the Company,
(iv) any change in the capital stock (other than the issuance of
shares of Common Stock upon exercise of stock options and warrants
disclosed as outstanding in the Registration Statement, the Base
Prospectus and the Prospectus Supplement and the grant of options
under existing stock option plans described in the Registration
Statement, the Base Prospectus and the Prospectus Supplement) or
outstanding indebtedness of the Company, or (v) any dividend or
distribution of any kind declared, paid or made on the capital
stock of the Company.
13
(kk) The Stock is registered under
the Exchange Act and is duly listed and admitted and authorized for
trading, subject to official notice of issuance, on the Nasdaq
National Market (“ Nasdaq ”) and the Company has
taken no action designed to terminate, or likely to have the effect
of terminating the registration of the Common Stock under the
Exchange Act or delisting or suspending from trading the Common
Stock from Nasdaq, nor has the Company received any information
suggesting that the Commission or the National Association of
Securities Dealers, Inc. (“ NASD ”) is
contemplating terminating or suspending such registration or
listing.
(ll) Neither the Company nor any of
its subsidiaries nor any of their officers, directors or affiliates
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 o
