STEMCELLS, INC.
$30,000,000 COMMON STOCK
CONTROLLED EQUITY
OFFERING SM
CANTOR
FITZGERALD & CO.
499 Park Avenue
New York, NY 10022
STEMCELLS,
INC., a Delaware corporation (the “ Company
”), confirms its agreement (this “
Agreement ”) with Cantor Fitzgerald & Co.
(“ CF&Co ”), as follows:
1.
Issuance and Sale of Shares . The Company agrees that, from
time to time during the term of this Agreement, on the terms and
subject to the conditions set forth herein, it may issue and sell
through CF&Co, acting as agent and/or principal, up to
$30,000,000 of shares (the “ Placement
Shares ”) of the Company’s common stock,
par value $0.01 per share (the “ Common
Stock ”). Notwithstanding anything to the
contrary contained herein, the parties hereto agree that compliance
with the limitation set forth in this Section 1 on the
number of Placement Shares issued and sold under this Agreement
shall be the sole responsibility of the Company, and CF&Co
shall have no obligation in connection with such compliance. The
issuance and sale of Placement Shares through CF&Co will be
effected pursuant to the Registration Statement (as defined below)
filed by the Company and declared effective by the Securities and
Exchange Commission (the “ Commission
”), although nothing in this Agreement shall be construed as
requiring the Company to use the Registration Statement (as defined
below) to issue Common Stock.
The
Company has filed, in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations
thereunder (collectively, the “ Securities Act
”), with the Commission a registration statement on Form S-3
(File No. 333-151891), including a base prospectus, relating
to certain securities, including the Placement Shares to be issued
from time to time by the Company, and which incorporates by
reference documents that the Company has filed or will file in
accordance with the provisions of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder
(collectively, the “ Exchange Act ”). The
Company has prepared a prospectus supplement specifically relating
to the Common Stock (the “ Prospectus
Supplement ”) to the base prospectus included as
part of such registration statement. The Company has furnished to
CF&Co, for use by CF&Co, copies of the prospectus included
as part of such registration statement, as supplemented by the
Prospectus Supplement, relating to the Placement Shares. Except
where the context otherwise requires, such registration statement,
as amended when it became effective, including all documents filed
as part thereof or incorporated by reference therein, and including
any information contained in a Prospectus (as
1
defined below)
subsequently filed with the Commission pursuant to Rule 424(b)
under the Securities Act or deemed to be a part of such
registration statement pursuant to Rule 430B or 462(b) of the
Securities Act, as well as any comparable successor registration
statement filed by the Company for the sale of shares of its Common
Stock, including the Placement Shares, collectively are herein
called the “ Registration Statement
.” The base prospectus, including all documents incorporated
therein by reference, included in the Registration Statement, as it
may be supplemented by the Prospectus Supplement, in the form in
which such prospectus and/or Prospectus Supplement have most
recently been filed by the Company with the Commission pursuant to
Rule 424(b) under the Securities Act is herein called the “
Prospectus .” Any reference herein to
the Registration Statement, the Prospectus or any amendment or
supplement thereto 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
or the Prospectus shall be deemed to refer to and include the
filing after the execution hereof of any document with the
Commission deemed to be incorporated by reference therein. For
purposes of this Agreement, all references to the Registration
Statement, the Prospectus or to any amendment or supplement thereto
shall be deemed to include any copy filed with the Commission
pursuant to either the Electronic Data Gathering Analysis and
Retrieval System or Interactive Data Electronic Applications
(collectively “ IDEA
”).
2.
Placements . Each time that the Company wishes to issue and
sell the Placement Shares hereunder (each, a “
Placement ”), it will notify CF&Co
by email notice (or other method mutually agreed to in writing by
the parties) (a “ Placement Notice
”) containing the parameters in accordance with which it
desires the Placement Shares to be sold, which shall at a minimum
include the number of Placement Shares to be issued, the time
period during which sales are requested to be made, any limitation
on the number of Placement Shares that may be sold in any one
Trading Day (as defined in Section 3) and any minimum price
below which sales may not be made, a form of which containing such
minimum sales parameters necessary is attached hereto as
Schedule 1 . The Placement Notice shall originate
from any of the individuals from the Company set forth on
Schedule 2 (with a copy to each of the other individuals from
the Company listed on such schedule), and shall be addressed to
each of the individuals from CF&Co set forth on
Schedule 2, as such Schedule 2 may be amended from time
to time. The Placement Notice shall be effective upon receipt by
CF&Co unless and until (i) in accordance with the notice
requirements set forth in Section 4, CF&Co declines to
accept the terms contained therein for any reason, in its sole
discretion, (ii) the entire amount of the Placement Shares
have been sold, (iii) in accordance with the notice
requirements set forth in Section 4, the Company suspends or
terminates the Placement Notice, (iv) the Company issues a
subsequent Placement Notice with parameters superseding those on
the earlier dated Placement Notice, or (iv) the Agreement has
been terminated under the provisions of Section 11. The amount
of any discount, commission or other compensation to be paid by the
Company to CF&Co in connection with the sale of the Placement
Shares shall be calculated in accordance with the terms set forth
in Schedule 3. It is expressly acknowledged and agreed that
neither the Company nor CF&Co will have any obligation
whatsoever with respect to a Placement or any Placement Shares
unless and until the Company delivers a Placement Notice to
CF&Co and CF&Co does not decline such Placement Notice
pursuant to the terms set forth above, and then only upon the terms
specified therein and herein. In the event of a conflict between
the terms of this Agreement and the terms of a Placement Notice,
the terms of the Placement Notice will control.
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3. Sale
of Placement Shares by CF&Co . Subject to the terms and
conditions herein set forth, upon the Company’s issuance of a
Placement Notice, and unless the sale of the Placement Shares
described therein has been declined, suspended, or otherwise
terminated in accordance with the terms of this Agreement,
CF&Co, for the period specified in the Placement Notice, will
use its commercially reasonable efforts consistent with its normal
trading and sales practices and applicable state and federal laws,
rules and regulations and the rules of the NASDAQ Global Market
(the “ Exchange ”), to sell such
Placement Shares up to the amount specified, and otherwise in
accordance with the terms of such Placement Notice. CF&Co will
provide written confirmation to the Company (including by email
correspondence) no later than the opening of the Trading Day (as
defined below) next following the Trading Day on which it has made
sales of Placement Shares hereunder setting forth the number of
Placement Shares sold on such day, the compensation payable by the
Company to CF&Co with respect to such sales pursuant to
Section 2, and the Net Proceeds (as defined below) payable to
the Company, with an itemization of deductions made by CF&Co
(as set forth in Section 5(a)) from gross proceeds for the
Placement Shares that it receives from such sales. CF&Co may
sell Placement Shares by any method permitted by law deemed to be
an “at the market” offering as defined in Rule 415
of the Securities Act, including without limitation sales made
directly on the Exchange, on any other existing trading market for
the Common Stock or to or through a market maker. With the prior
express written consent of the Company, which may be provided in
its Placement Notice, CF&Co may also sell Placement Shares in
privately negotiated transactions. The Company acknowledges and
agrees that (i) there can be no assurance that CF&Co will
be successful in selling Placement Shares, and (ii) CF&Co
will incur no liability or obligation to the Company or any other
person or entity if it does not sell Placement Shares for any
reason other than a failure by CF&Co to use its commercially
reasonable efforts consistent with its normal trading and sales
practices to sell such Placement Shares as required under this
Section 3 . For the purposes hereof, “
Trading Day ” means any day on which the
Company’s Common Stock are purchased and sold on the
principal market on which the Common Stock are listed or
quoted.
4.
Suspension of Sales . The Company or CF&Co may, upon
notice to the other party in writing (including by email
correspondence to each of the individuals of the other party set
forth on Schedule 2 , if receipt of such
correspondence is actually acknowledged by any of the individuals
to whom the notice is sent, other than via auto-reply) or by
telephone (confirmed immediately by verifiable facsimile
transmission or email correspondence to each of the individuals of
the other party set forth on Schedule 2 ),
suspend any sale of Placement Shares; provided, however ,
that such suspension shall not affect or impair either
party’s obligations with respect to any Placement Shares sold
hereunder prior to the receipt of such notice. Each of the Parties
agrees that no such notice under this Section 4 shall
be effective against the other unless it is made to one of the
individuals named on Schedule 2 hereto, as such
schedule may be amended from time to time.
(a)
Settlement of Placement Shares . Unless otherwise specified
in the applicable Placement Notice, settlement for sales of
Placement Shares will occur on the third (3
rd ) Business Day (or such earlier day as is
industry practice for regular-way trading) following the date on
which such sales are made (each, a “ Settlement
Date ” and the first such settlement date, the
“ First Delivery Date ”). The
amount of proceeds to be delivered to the Company on a Settlement
Date against receipt of the Placement Shares sold (the “
Net Proceeds ”) will be
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equal to the
aggregate sales price received by CF&Co at which such Placement
Shares were sold, after deduction for (i) CF&Co’s
commission, discount or other compensation for such sales payable
by the Company pursuant to Section 2 hereof,
(ii) any other amounts due and payable by the Company to
CF&Co hereunder pursuant to Section 7(g) (Expenses)
hereof, and (iii) any transaction fees imposed by any
governmental or self-regulatory organization in respect of such
sales.
(b)
Delivery of Placement Shares . On or before each Settlement
Date, the Company will, or will cause its transfer agent to,
electronically transfer the Placement Shares being sold by
crediting CF&Co’s or its designee’s account
(provided CF&Co shall have given the Company written notice of
such designee at least one Business Day prior to the Settlement
Date) at The Depository Trust Company through its Deposit and
Withdrawal at Custodian System or by such other means of delivery
as may be mutually agreed upon by the parties hereto which in all
cases shall be freely tradeable, transferable, registered shares in
good deliverable form. On each Settlement Date, CF&Co will
deliver the related Net Proceeds in same-day funds to an account
designated by the Company on, or prior to, the Settlement Date. The
Company agrees that if the Company, or its transfer agent (if
applicable), defaults in its obligation to deliver Placement Shares
on a Settlement Date, the Company agrees that in addition to and in
no way limiting the rights and obligations set forth in
Section 9(a) (Indemnification and Contribution) hereto,
it will (i) hold CF&Co harmless against any loss, claim,
damage, or expense (including reasonable legal fees and expenses),
as incurred, arising out of or in connection with such default by
the Company and (ii) pay to CF&Co any commission,
discount, or other compensation to which it would otherwise have
been entitled absent such default.
6.
Representations and Warranties of the Company . The Company
represents and warrants to, and agrees with, CF&Co that as of
each Applicable Time (as defined in Section 20(a)
):
(a)
Compliance with Registration Requirements . The Registration
Statement has been filed with the Commission under the Securities
Act and declared effective by the Commission under the Securities
Act. The Company has complied with all requests of the Commission
for additional or supplemental information. No stop order
suspending the effectiveness of the Registration Statement is in
effect and no proceedings for such purpose have been instituted or
are pending or, to the Company’s knowledge, are contemplated
or threatened by the Commission. The Company satisfied all
applicable requirements for the use of Form S-3 under the
Securities Act when the Registration Statement was filed. The
Commission has not issued an order preventing or suspending the use
of the base prospectus, any Free Writing Prospectus (as defined
below) or the Prospectus relating to the proposed offering of the
Placement Shares and no proceedings for such purpose have been
instituted or are pending or, to the Company’s knowledge, are
contemplated or threatened by the Commission. The Prospectus
delivered to CF&Co for use in connection with the offering of
Placement Shares was, at the time of such delivery, identical to
the electronically transmitted copies thereof filed with the
Commission pursuant to IDEA, except to the extent permitted by
Regulation S-T. At the respective times each part of the
Registration Statement and each amendment thereto became effective
or was deemed effective, as the case may be, the Registration
Statement complied and will comply in all material respects with
the Securities Act and did not and will not contain an untrue
statement of a material fact or omit to state a material fact
required to be
4
stated therein
or necessary to make the statements therein not misleading. The
immediately preceding sentence does not apply to statements in or
omissions from the Registration Statement or any amendments or
supplements thereto based upon and in conformity with written
information furnished to the Company by CF&Co specifically for
use therein.
(b)
Delivery of Offering Materials . The Company has delivered
to CF&Co, or made available through IDEA, one complete copy of
the Registration Statement and of each consent of experts filed as
a part thereof, and conformed copies of the Registration Statement
(without exhibits), and the Prospectus, as amended or supplemented,
in such quantities and at such places as CF&Co has reasonably
requested.
(c)
Prospectus . Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such
amendment or supplement was issued, as of the date hereof and at
each Applicable Time, as the case may be, included or will include
an untrue statement of a material fact or omitted or 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. The foregoing sentence does not apply to
statements in or omissions from the Prospectus or any amendments or
supplements thereto based upon and in conformity with written
information furnished to the Company by CF&Co specifically for
use therein.
(d)
Financial Information . The consolidated financial
statements of the Company, together with the related schedules and
notes thereto, set forth or included or incorporated by reference
in the Registration Statement and the Prospectus fairly present, in
all material respects, the financial condition of the Company as of
and at the dates indicated and the results of operations, changes
in financial position, stockholders’ equity and cash flows
for the periods therein specified. Such financial statements,
schedules, and notes are in conformity with GAAP as consistently
applied in the United States throughout the periods involved
(except as otherwise stated therein). The selected financial data
included or incorporated by reference in the Registration Statement
and the Prospectus present fairly the information shown therein
and, to the extent based upon or derived from the financial
statements, have been complied on a basis consistent with the
financial statements presented therein. Any pro forma financial
statements of the Company, and the related notes thereto, included
or incorporated by reference in the Registration Statement and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission’s rules and
guidelines with respect to pro forma financial statements and have
been properly compiled on the basis described therein, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions and circumstances referred to therein. The Company
does not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations), not
disclosed in the Registration Statement and the Prospectus. No
other financial statements are required to be set forth or to be
incorporated by reference in the Registration Statement or the
Prospectus under the Securities Act.
(e)
Incorporated Documents . Each document incorporated or
deemed to be incorporated by reference in the Registration
Statement or the Prospectus heretofore filed, at the time it was or
hereafter is filed with the Commission conformed and will conform
when filed in all material respects with the requirements of the
Exchange Act and the rules and regulations thereunder; no such
document when it was filed (or, if an amendment with
respect
5
to any such
document was filed, when such amendment was filed), contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make
the statements therein not misleading; and no such document, when
it is filed, will contain an untrue statement of a material fact or
will omit to state a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading.
(f)
Free Writing Prospectuses . Each “issuer free writing
prospectus” (a “ Free Writing Prospectus
”), as defined in Rule 433 under the Securities Act
(“ Rule 433 ”), relating to the
Placement Shares that (i) was required to be filed with the
Commission by the Company or (ii) is exempt from filing pursuant to
Rule 433(d)(5)(i) in each case 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), as of its issue date and as of each Applicable
Time (as defined in Section 20 below), did not, does
not and will not include any information that conflicted, conflicts
or will conflict with the information contained in the Registration
Statement or the Prospectus, including any incorporated document
deemed to be a part thereof that has not been superseded or
modified. The foregoing sentence does not apply to statements in or
omissions from any Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by
CF&Co specifically for use therein.
(g)
Organization . The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the state of Delaware with full corporate power and authority
necessary to own, hold, lease and/or operate its assets and
properties and to conduct the business in which it is engaged and
as described in the Registration Statement and Prospectus; and the
Company is duly qualified as a foreign entity to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure, individually or in the aggregate, to be so qualified and
be in good standing would not have a material adverse effect on
(i) the consolidated business, operations, assets, properties,
financial condition, reputation, prospects, or results of
operations of the Company and the Subsidiary (as defined herein)
taken as a whole, (ii) the transactions contemplated hereby,
or (iii) the ability of the Company to perform its obligation
under this Agreement (collectively, a “ Material
Adverse Effect ”). The Company has full corporate
power and authority necessary to enter into and perform its
obligations under this Agreement and to consummate the transactions
contemplated hereby. The Company is in compliance with the laws,
orders, rules, regulations and directives applicable to it, except
for any noncompliance that, individually, or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
Complete and correct copies of the articles of incorporation and of
the bylaws of the Company and all amendments thereto have been
delivered or made available to CF&Co.
(h)
Subsidiary . (1) The Company has no “significant
subsidiaries” (as such term is defined in Rule 1-02 of
Regulation S-X promulgated under the Securities Act) other
than StemCells California, Inc., a California Corporation (“
StemCells California ”) and StemCell Sciences
Holdings Limited, a private limited company registered in the
United Kingdom (“ StemCell Sciences ”).
StemCells California, StemCell Sciences and each of the
Company’s other subsidiaries (collectively, the “
Subsidiaries ”) has been duly formed and
incorporated and is validly existing as a corporation in good
standing under the laws of its respective
6
jurisdiction,
is duly qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which its ownership or
lease of property or assets or the conduct of its business requires
such qualification, except where the failure to so qualify,
individually or in the aggregate, would not have a Material Adverse
Effect, and has full corporate power and authority necessary to
own, hold, lease and/or operate its assets and properties, to
conduct the business in which it is engaged and as described in the
Prospectus. Each of the Subsidiaries is in compliance with the
laws, orders, rules, regulations and directives necessary to
conduct its business except for any noncompliance that,
individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect. A complete and correct copy of
the formation documents of StemCells California and StemCell
Sciences and all amendments thereto have been delivered or made
available to CF&Co.
(2)
Other than the capital stock of its Subsidiaries, the Company does
not own, directly or indirectly, any shares of stock or any other
equity interests or long-term debt securities of any corporation,
firm, partnership, joint venture, association or other entity,
other than the Company’s equity interest in ReNeuron Group
plc, as disclosed in the Registration Statement and the Prospectus.
All of the outstanding shares of capital stock of each of its
Subsidiaries have been duly authorized and validly issued, are
fully paid and non-assessable, and are wholly owned by the Company,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or other equity or adverse claims except for any
security interest, mortgage, pledge, lien, encumbrance, or claims
as would not reasonably be expected to have a Material Adverse
Effect. No options, warrants or other rights to purchase,
agreements or other obligations to issue or other rights to convert
any obligation into shares of capital stock or ownership interests
in any of the Subsidiaries are outstanding.
(i)
No Violation or Default . Neither the Company nor any of its
Subsidiaries is (i) in violation of any provision of its charter or
bylaws or similar organizational documents, (ii) is 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, (iii) is 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,
its Subsidiaries 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), or (iv) any rule or regulation of any self-regulating
organization or other non-governmental regulatory authority
(including, without limitation, the rules and regulations of the
Exchange) except, with respect to clauses (ii), (iii), and (iv),
any violations or defaults which, singularly or in the aggregate,
would not reasonably be expected to result in a Material Adverse
Effect. To the knowledge of the Company, no other party under any
contract or other agreement to which the Company or its
Subsidiaries is a party is in default in any respect thereunder,
except for any default that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
The execution, delivery and performance of this Agreement, the
issuance and sale of
7
the Placement
Shares and the consummation of the transactions contemplated hereby
will not conflict with, or result in any breach of or constitute a
default under (nor constitute any event which with notice, lapse of
time or both would result in any breach of, or constitute a default
under), (i) any provision of the charter, bylaws or
organizational documents, as the case may be, of the Company or any
of its Subsidiaries, (ii) any provision of any contract,
license, repurchase agreement, management agreement, indenture,
mortgage, deed of trust, bank loan or credit agreement, note, lease
or other evidence of indebtedness, or any lease, contract 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, or any of their respective assets or properties may
be bound or affected, except for any breach or default that,
individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect, (iii) any federal, state,
local or foreign law, regulation or rule or any decree, judgment or
order applicable to the Company or any of its Subsidiaries, or
(iv) any rule or regulation of any self-regulating
organization or other non-governmental regulatory authority
(including, without limitation, the rules and regulations of the
Exchange), except for any breach or default that, individually or
in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
(j)
Capitalization . As of December 31, 2008, the Company
had an authorized, issued and outstanding capitalization as set
forth on its balance sheet included in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2008. All
of the issued and outstanding shares of capital stock of the
Company have been duly and validly authorized and issued and are
fully paid and non-assessable, have been issued in compliance with
all federal and state securities laws and were not issued in
violation of any preemptive right, resale right, right of first
refusal or similar right.
(k)
Authorization; Enforceability . This Agreement has been duly
authorized, executed and delivered by the Company and is a legal,
valid and binding agreement of the Company enforceable in
accordance with its terms, except to the extent that
(i) enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general equitable
principles and (ii) the indemnification and contribution
provisions of Section 9 hereof may be limited by federal or
state securities laws and public policy considerations in respect
thereof.
(l)
Capital Stock and Placement Shares in Proper Form . The
capital stock of the Company, including the Placement Shares,
conforms in all material respects to the description thereof
contained in the Registration Statement and the Prospectus. The
form of certificates for the Placement Shares are in due and proper
form and the holders of the Placement Shares will not be subject to
personal liability under the Delaware General Corporation Law by
reason of being such holders.
(m)
Authorization of Placement Shares . The Placement Shares,
when issued and delivered pursuant to the terms approved by the
Board of Directors or a duly designated committee thereof, against
payment therefor as provided herein, will be duly and validly
authorized and issued and fully paid and non-assessable, free and
clear of any pledge, lien, encumbrance, security interest or other
claim, including any statutory or contractual preemptive rights,
resale rights, rights of first refusal or other similar rights, and
will be registered pursuant to Section 12 of the Exchange
Act.
8
(n)
Consents and Permits . (1) The Company and its
Subsidiaries have 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 for the ownership or lease of their respective properties
or to conduct its businesses as described in the Registration
Statement and the Prospectus (collectively, “
Permits ”), except for such Permits the failure
of which to possess, obtain or make the same would not reasonably
be expected to have a Material Adverse Effect; and neither the
Company nor any of its Subsidiaries has received any written notice
of proceedings relating to the limitation, revocation,
cancellation, suspension, modification or non-renewal of any such
Permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material
Adverse Effect, and has any reason to believe that any such
license, certificate, permit or authorization will not be renewed
in the ordinary course. (2) No approval, authorization,
consent or order of or filing with any national, state or local
governmental or regulatory commission, board, body, authority or
agency is required in connection with the issuance and sale of the
Placement Shares or the consummation by the Company of the
transactions contemplated hereby other than (i) registration
of the Placement Shares under the Securities Act, (ii) any
necessary qualification under the securities or blue sky laws of
the various jurisdictions in which the Placement Shares are being
offered by CF&Co, (iii) filing of any reports under the
Exchange Act, (iv) such approvals obtained or to be obtained
in connection with the approval of the listing of the Placement
Shares on the Exchange, or (v) such approvals as may be
required by the Conduct Rules of the Financial Industry Regulatory
Authority, Inc. (“ FINRA ”).
(o)
No Preferential Rights . Except as set forth in the
Registration Statement and the Prospectus, (i) no person, as
such term is defined in Rule 1-02 of Regulation S-X
promulgated under the Securities Act (each, a “
Person ”), has the right, contractual or
otherwise, to cause the Company to issue or sell to such Person any
shares of Common Stock or shares of any other capital stock or
other securities of the Company, (ii) no Person has any
preemptive rights, resale rights, rights of first refusal, or any
other rights (whether pursuant to a “poison pill”
provision or otherwise) to purchase any shares of Common Stock or
shares of any other capital stock or other securities of the
Company, (iii) except as disclosed to CF&Co or its agents
in connection with the transactions contemplated hereby, no Person
has the right to act as an underwriter or as a financial advisor to
the Company in connection with the offer and sale of the Placement
Shares, and (iv) no Person has the right, contractual or
otherwise, to require 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 other securities 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
Placement Shares as contemplated thereby or otherwise.
(p)
Independent Public Accountant . Grant Thornton LLP (
“ Grant Thornton ” ), whose report on the
consolidated financial statements of the Company is filed with the
Commission as part of the Registration Statement and the
Prospectus, are and, during the periods covered
9
by their
report, were independent public accountants within the meaning of
the Securities Act and the Public Accounting Oversight Board
(United States).
(q)
Enforceability of Agreements . To the knowledge of the
Company, all agreements between the Company and third parties
expressly referenced in the Prospectus are legal, valid and binding
obligations of the Company enforceable in accordance with their
respective terms, except to the extent that (i) enforceability
may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors’ rights
generally and by general equitable principles and (ii) the
indemnification provisions of certain agreements may be limited be
federal or state securities laws or public policy considerations in
respect thereof and except for any unenforceability that,
individually or in the aggregate, would not unreasonably be
expected to have a Material Adverse Effect.
(r)
No Litigation . Except as disclosed in the Registration
Statement and the Prospectus, there are no actions, suits, claims,
investigations, inquiries or proceedings pending or, to the best of
the Company’s knowledge, threatened to which either the
Company or, to the Company’s knowledge, its Subsidiaries, nor
any of their respective officers or directors is a party or of
which any of their respective properties or other assets is subject
at law or in equity, or before or by any federal, state, local or
foreign governmental or regulatory commission, board, body,
authority or agency or before any self-regulating organization or
other non-governmental regulatory authority (including, without
limitation, the Exchange), which if resolved adversely to the
Company or such Subsidiary would, individually or in the aggregate,
have a Material Adverse Effect.
(s)
Regulatory Filings . Neither the Company nor any of its
Subsidiaries has 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,
except for such failures that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect;
all such filings, declarations, listings, registrations, reports or
submissions were in compliance with applicable laws when filed and
no deficiencies have been asserted by any applicable regulatory
authority with respect to any such filings, declarations, listings,
registrations, reports or submissions, except for any deficiencies
that, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
(t)
Market Capitalization . As of the date of this Agreement,
the aggregate market value of the Company’s voting stock held
by nonaffiliates of the Company was equal to or greater than
$100 million.
(u)
No Material Changes . Subsequent to the respective dates as
of which information is given in, or incorporated by reference
into, the Registration Statement and the Prospectus, there has not
been (i) any change, development, or event that has caused, or
could reasonably be expected to result, individually or in the
aggregate, in, a Material Adverse Effect, (ii) any change in
the number of authorized shares of capital stock, (iii) any
transaction which is material to the Company and the Subsidiary
taken as a whole, or (iv) any obligation or liability, direct
or contingent (including any off-balance sheet obligations),
incurred by the
10
Company or its
Subsidiaries, which is material to the Company and its Subsidiaries
taken as a whole.
(v)
No Material Defaults . Neither the Company nor any of its
Subsidiaries has defaulted on any installment on indebtedness for
borrowed money or on any rental on one or more long-term leases,
which defaults, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect. The Company has not
filed a report pursuant to Section 13(a) or 15(d) of the Exchange
Act since the filing of its last Annual Report on Form 10-K
indicating that it (i) has failed to pay any dividend or
sinking fund installment on preferred stock or (ii) has defaulted
on any installment on indebtedness for borrowed money or on any
rental on one or more long-term leases, which defaults,
individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(w)
Certain Market Activities . Neither the Company nor, to the
Company’s knowledge, any of its Subsidiaries, nor, to the
Company’s knowledge, any of their respective directors,
officers or controlling persons has taken, directly or indirectly,
any action designed, or that has constituted or might reasonably be
expected to cause or result in, under the Exchange Act or
otherwise, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the
Placement Shares.
(x)
Broker/Dealer Relationships . Neither the Company nor any of
its Subsidiaries or any related entities (i) is required to
register as a “broker” or “dealer” in
accordance with the provisions of the Exchange Act or
(ii) directly or indirectly through one or more
intermediaries, controls or is a “person associated with a
FINRA member” or “associated person of a FINRA
member” (within the meaning of Article I of the Bylaws
of the NASD).
(y)
No Reliance . The Company has not relied upon CF&Co or
legal counsel for CF&Co for any legal, tax or accounting advice
in connection with the offering and sale of the Placement
Shares.
(z)
Taxes . The Company and, to the Company’s knowledge,
any of its Subsidiaries has filed on a timely basis (taking into
account all applicable extensions) all necessary federal, state,
local and foreign income and franchise tax returns, if any such
returns were required to be filed, through the date hereof and have
paid all taxes shown as due thereon except for any failure to file
or pay which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. No tax
deficiency has been asserted against the Company or, to the
Company’s knowledge, any of its Subsidiaries, nor does the
Company know of any tax deficiency that is likely to be asserted
against any such entity that, if determined adversely to any such
entity, could reasonably be expected to have a Material Adverse
Effect. All tax liabilities, if any, are adequately provided for on
the books of the Company and, to the Company’s knowledge, any
of its Subsidiaries, except for such tax liabilities that,
individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect.
(aa)
Intellectual Property . Except as set forth in the
Prospectus, the Company and its Subsidiaries own, possess, license
or have 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
11
conduct of
their respective businesses as now conducted or as proposed in the
Prospectus to be conducted except to the extent that the failure to
own, possess, license or otherwise hold adequate rights to use such
Intellectual Property would not, individually or in the aggregate,
have a Material Adverse Effect. Except as set forth in the
Prospectus, (a) there are no rights of third parties to any
such Intellectual Property owned by the Company and its Subsidiary;
(b) to the Company’s knowledge, there is no infringement by
third parties of any such Intellectual Property; (c) to the
Company’s knowledge, there is no pending or threatened
action, suit, proceeding or claim by others challenging the
Company’s and its Subsidiary’ rights in or to any such
Intellectual Property, and the Company is unaware of any facts
which could form a reasonable basis for any such action, suit,
proceeding or claim; (d) to the Company’s knowledge,
there is no pending or threatened action, suit, proceeding or claim
by others challenging the validity or scope of any such
Intellectual Property; (e) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or
claim by others that the Company and its Subsidiary infringe or
otherwise violate any patent, trademark, copyright, trade secret or
other proprietary rights of others; and (f) 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 (as defined in 35 U.S.C. § 135)
have been commenced against any patent or patent application
described in the Prospectus as being owned by or licensed to the
Company, (g) the Company and its Subsidiaries have complied
with the terms of each agreement pursuant to which Intellectual
Property has been licensed to the Company or such Subsidiary, and
all such agreements are in full force an
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