|
Exhibit 10.1
EXECUTION COPY
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the " Agreement "), dated
as of December 29, 2008, by and among Stereotaxis, Inc., a
Delaware corporation, with headquarters located at 4320 Forest Park
Avenue, Suite 100, St. Louis, Missouri 63108 (the "
Company "), and the investors listed on the Schedule of
Buyers attached hereto (individually, a " Buyer " and
collectively, the " Buyers ").
WHEREAS :
A. The Company and the Buyers desire to enter into this
transaction to purchase the Common Shares (as defined below) and
Warrants (as defined below) pursuant to the Registration Statement
(as defined below) which is currently effective, has at least
$65,820,600 of initial offering price of unallocated securities
available for sale as of the date hereof and has been declared
effective in accordance with the Securities Act of 1933, as amended
(the " 1933 Act "), by the United States Securities and
Exchange Commission (the " SEC "), and is currently
effective.
B. Each Buyer wishes to purchase, and the Company wishes to
sell, upon the terms and conditions stated in this Agreement,
(i) that number of shares of the Common Stock, par value
$0.001 per share, of the Company (the " Common Stock "), set
forth opposite such Buyer’s name in column (3) on the
Schedule of Buyers attached hereto (which aggregate amount for all
Buyers shall be $10,000,000, (ii) warrants, in substantially
the form attached hereto as Exhibit A-1 (the " Series A
Warrants "), to acquire up to that number of additional shares
of Common Stock set forth opposite such Buyer’s name in
column (4) of the Schedule of Buyers (as exercised,
collectively, the " Series A Warrant Shares "),
(iii) warrants in substantially the form attached hereto as
Exhibit A-2 (the " Series B Warrants "), to acquire up to
that number of additional shares of Common Stock set forth opposite
such Buyer’s name in column (5) of the Schedule of
Buyers (as exercised, collectively, the " Series B Warrant
Shares "), (iv) warrants, in substantially the form
attached hereto as Exhibit A-3 (the " Series C Warrants "),
to acquire up to that number of additional shares of Common Stock
set forth opposite such Buyer’s name in column (6) of
the Schedule of Buyers (as exercised, collectively, the " Series
C Warrant Shares "), (v) warrants, in substantially the
form attached hereto as Exhibit A-4 (the " Series D Warrants
," and collectively with the Series A Warrants, the Series B
Warrants and the Series C Warrants, the " Warrants "), to
acquire up to that number of additional shares of Common Stock set
forth opposite such Buyer’s name in column (7) of the
Schedule of Buyers (as, exercised, collectively, the " Series D
Warrant Shares ," and collectively with the Series A Warrant
Shares, the Series B Warrant Shares and the Series C Warrant
Shares, the " Warrant Shares "), which Warrant Shares shall
be issued pursuant to the Registration Statement or, if such
Registration Statement is not available at the time of issuance of
such Warrant Shares, shall be issued solely pursuant to the
cashless exercise provisions of the Warrant as securities exempt
from registration pursuant to Section 3(a)(9) of the 1933
Act.
C. The Common Shares, the Warrants and the Warrant Shares
collectively are referred to herein as the " Securities
."
NOW, THEREFORE , the Company and each
Buyer hereby agree as follows:
1. PURCHASE AND SALE OF COMMON SHARES AND WARRANTS .
(a) Purchase of Common Shares and Warrants .
(i) Common Shares and Warrants . Subject to the
satisfaction (or waiver) of the conditions set forth in Sections 6
and 7 below, the Company shall issue and sell to each Buyer, and
each Buyer severally, but not jointly, shall purchase from the
Company on the Closing Date (as defined below), (v) the number
of Common Shares as is set forth opposite such Buyer’s name
in column (3) on the Schedule of Buyers, (w) Series A
Warrants to acquire up to that number of Warrant Shares as is set
forth opposite such Buyer’s name in column (4) on the
Schedule of Buyers, (x) Series B Warrants to acquire up to
that number of Warrant Shares as is set forth opposite such
Buyer’s name in column (5) on the Schedule of Buyers,
(y) Series C Warrants to acquire up to that number of Warrant
Shares as is set forth opposite such Buyer’s name in column
(6) on the Schedule of Buyers and (z) Series D Warrants
to acquire up to that number of Warrant Shares as is set forth
opposite such Buyer’s name in column (7) on the Schedule
of Buyers.
(ii) Closing . The date of the Closing (the " Closing
Date ") shall be on the date of notification of satisfaction
(or waiver) of the conditions to the Closing set forth in Sections
6 and 7 below at the offices of Schulte Roth & Zabel LLP,
919 Third Avenue, New York, New York 10022 (unless otherwise
mutually agreed to by the Company and each Buyer). The Closing
shall be deemed to have occurred at 10:00 a.m., New York City time
on the Closing Date.
(iii) Purchase Price . The aggregate purchase price for
the Common Shares and the Warrants to be purchased by each such
Buyer at the Closing (the " Purchase Price ") shall be the
amount set forth opposite each Buyer’s name in column
(8) of the Schedule of Buyers, which shall be equal to $4.18
per Common Share and the related Warrants.
(b) Form of Payment . On the Closing Date, (i) each
Buyer shall pay its Purchase Price to the Company for the Common
Shares and the Warrants to be issued and sold to such Buyer at the
Closing, by wire transfer of immediately available funds in
accordance with the Company’s written wire instructions and
(ii) the Company shall deliver to each Buyer the Common Shares
(allocated in the amounts as such Buyer shall request) which such
Buyer is then purchasing hereunder along with the Warrants
(allocated in the amounts as such Buyer shall request) which such
Buyer is purchasing, in each case duly executed on behalf of the
Company and registered in the name of such Buyer or its
designee.
2. BUYER’S REPRESENTATIONS AND WARRANTIES . Each
Buyer, severally and not jointly, represents and warrants with
respect to only itself that:
(a) No Sale or Distribution . Such Buyer is acquiring the
Common Shares and the Warrants in the ordinary course of its
business for its own account. Such Buyer does not presently have
any agreement or understanding, directly or indirectly, with any
Person to distribute any of the Common Shares or Warrants. For the
purpose of this Agreement, " Person " means an individual, a
limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
- 2 -
(b) Organization; Authority . Such Buyer
is an entity duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization with the
requisite power and authority to enter into and to consummate the
transactions contemplated by the applicable Transaction Documents
(as defined below) and otherwise to carry out its obligations
thereunder. The execution, delivery and performance by such Buyer
of the transactions contemplated by this Agreement has been duly
authorized by all necessary action on the part of such Buyer. This
Agreement has been duly executed by such Buyer, and when delivered
by such Buyer in accordance with the terms hereof, will constitute
the valid and legally binding obligation of such Buyer, enforceable
against it in accordance with its terms, except (i) as such
enforceability may be limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors’ rights
generally, (ii) as enforceability of any indemnification and
contribution provisions may be limited under the federal and state
securities laws and public policy, and (iii) that the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion
of the court before which any proceeding therefor may be
brought.
(c) No Conflicts . The execution, delivery and
performance by such Buyer of this Agreement and the consummation by
such Buyer of the transactions contemplated hereby will not
(i) result in a violation of the organizational documents of
such Buyer or (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which such Buyer is a party, or
(iii) result in a violation of any law, rule, regulation,
order, judgment or decree (including federal and state securities
laws) applicable to such Buyer, except in the case of clauses
(ii) and (iii) above, for such conflicts, defaults,
rights or violations which would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect
on the ability of such Buyer to perform its obligations
hereunder.
(d) Residency . Such Buyer is a resident of that
jurisdiction specified below its address on the Schedule of
Buyers.
The Company acknowledges and agrees that each Buyer does not
make or has not made any representations or warranties with respect
to the transactions contemplated hereby other than those
specifically set forth in this Section 2.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . The
Company represents and warrants to each of the Buyers that, as of
the date hereof and as of the Closing Date:
(a) Shelf Registration Statement . A "shelf" registration
statement on Form S-3 (File No. 333-137007) with respect to
the Securities has been prepared by the Company in conformity in
all material respects with the requirements of the 1933 Act, and
the rules and regulations (the " Rules and Regulations ") of
the SEC thereunder and has been filed with the SEC. The Company and
the transactions contemplated by this Agreement meet the
requirements and comply with the conditions for the use of Form
S-3. The Registration Statement (as defined below) meets the
requirements of Rule 415(a)(1)(x) under the 1933 Act and complies
in all material respects with said rule. Copies of such
registration statement, including any amendments thereto, the base
prospectus
- 3 -
(meeting in all material respects the
requirements of the Rules and Regulations) contained therein and
the exhibits, financial statements and schedules, as finally
amended and revised, have heretofore been delivered by the Company
to the Buyers. Such registration statement, together with any
registration statement or amendment thereto filed by the Company
pursuant to Rule 462(b) under the 1933 Act, is herein referred to
as the " Registration Statement , which shall be deemed to
include all information omitted therefrom in reliance upon Rules
430A, 430B or 430C under the 1933 Act and contained in the
Prospectus referred to below, has become effective under the 1933
Act and, other than the amendment to the Registration Statement
filed or to be filed prior to Closing by the Company pursuant to
Rule 462(b) under the 1933 Act, no post-effective amendment to the
Registration Statement has been filed as of the date of this
Agreement. The term "Prospectus" as used in this Agreement means
the form of base prospectus together with the final prospectus
supplement relating to the Securities (the " Prospectus
Supplement ") first filed with the SEC pursuant to and within
the time limits described in Rule 424(b) under the 1933 Act. Any
preliminary prospectus relating to the Securities prior to the date
hereof, if any, is referred to as a " Preliminary Prospectus
". Any reference herein to the Registration Statement, any
Preliminary Prospectus or the Prospectus or to any amendment or
supplement to any of the foregoing documents shall be deemed to
refer to and include any documents incorporated by reference
therein, and, in the case of any reference herein to the
Prospectus, also shall be deemed to include any documents
incorporated by reference therein, and any supplements or
amendments thereto, filed with the SEC after the date of filing of
the Prospectus Supplement under Rule 424(b) under the 1933 Act and
prior to the termination of the offering of the
Securities.
(b) Prospectus . As of the Applicable Time (as defined
below) and as of the Closing Date (as defined below), neither
(x) the General Use Free Writing Prospectus(es) (as defined
below) issued at or prior to the Applicable Time, the Statutory
Prospectus (as defined below), all considered together
(collectively, the " General Disclosure Package "), nor
(y) any individual Limited Use Free Writing Prospectus (as
defined below), when considered together with the General
Disclosure Package, included or will include any 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;
provided, however, that the Company makes no representations or
warranties as to information contained in or omitted from any
Issuer Free Writing Prospectus, in reliance upon, and in conformity
with, written information furnished to the Company by or on behalf
of the Buyers, specifically for use therein. As used in this
subsection and elsewhere in this Agreement:
(i) " Applicable Time " means 5:30 p.m. (New York time)
on the date of this Agreement or such other time as agreed to by
the Company and the Buyers.
(ii) " Statutory Prospectus " as of any time means the
Preliminary Prospectus relating to the Securities that is included
in the Registration Statement immediately prior to that time.
(iii) " Issuer Free Writing Prospectus " means any
"issuer free writing prospectus," as defined in Rule 433 under the
1933 Act, relating to the Securities in the form filed or required
to be filed with the SEC or, if not required to be filed, in the
form retained in the Company’s records pursuant to Rule
433(g) under the 1933 Act.
- 4 -
(iv) " General Use Free Writing Prospectus
" means any Issuer Free Writing Prospectus that is identified on
Schedule I to this Agreement.
(v) " Limited Use Free Writing Prospectus " means any
Issuer Free Writing Prospectus that is not a General Use Free
Writing Prospectus.
(c) Organization . The Company has been duly organized
and is validly existing as a corporation in good standing under the
laws of the State of Delaware, with corporate power and authority
to own or lease its properties and conduct its business as
described in the Registration Statement, the General Disclosure
Package and the Prospectus. The Company has no significant
subsidiaries (as such term is defined in Rule 1-02 of Regulation
S-X promulgated by the SEC) other than as listed in Exhibit 21.1 to
the Company’s Annual Report on Form 10-K for the year ended
December 31, 2007 (the " Annual Report ")
(collectively, the " Subsidiaries "). Each of the
Subsidiaries has been duly organized and is validly existing as an
entity in good standing under the laws of the jurisdiction of its
organization, with corporate power and authority to own or lease
its properties and conduct its business as described in the
Registration Statement, the General Disclosure Package and the
Prospectus. The Subsidiaries are the only subsidiaries, direct or
indirect, of the Company. The Company and each of the Subsidiaries
are duly qualified to transact business in all jurisdictions in
which the conduct of their business requires such qualification,
except where the failure to be so qualified would not reasonably be
expected to (i) result in any material adverse change in or
affecting the business, results of operations, or financial
condition of the Company and of the Subsidiaries taken as a whole,
whether or not occurring in the ordinary course of business, or
(ii) prevent, burden or impair the consummation of the
transactions contemplated by this Agreement (collectively a "
Material Adverse Effect "). The outstanding shares of
capital stock of each of the Subsidiaries have been duly authorized
and validly issued, are fully paid and non-assessable and are owned
by the Company or another Subsidiary free and clear of all liens,
encumbrances and equities and claims, except as described in the
Registration Statement and the Annual Report; and no options,
warrants or other rights to purchase, agreements or other
obligations to issue or other rights to convert any obligations
into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(d) Authorization; Enforcement; Validity . The Company
has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement, the Irrevocable
Transfer Agent Instructions (as defined in Section 5(b)), the
Warrants and each of the other agreements entered into by the
parties hereto in connection with the transactions contemplated by
this Agreement (collectively, the " Transaction Documents ")
and to issue the Securities in accordance with the terms hereof and
thereof. The execution and delivery of the Transaction Documents by
the Company and the consummation by the Company of the transactions
contemplated hereby and thereby, including, without limitation, the
issuance of the Common Shares and the Warrants and the reservation
for issuance and the issuance of the Warrant Shares issuable upon
exercise of the Warrants have been duly authorized by the
Company’s Board of Directors, and no further filing, consent,
or authorization is required by the Company’s Board of
Directors or its stockholders. This Agreement and the other
Transaction Documents of even date herewith have been duly executed
and delivered by the Company, and constitute the legal, valid and
binding obligations of the Company, enforceable against the Company
in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and
remedies.
- 5 -
(e) Issuance of Securities . The
outstanding shares of Common Stock of the Company have been duly
authorized and validly issued and are fully paid and
non-assessable; the Securities to be issued and sold by the Company
have been duly authorized and when issued and paid for as
contemplated herein will be validly issued, fully paid and
non-assessable; and no preemptive rights of stockholders exist with
respect to any of the Securities or the issue and sale thereof. As
of the Closing, a number of shares of Common Stock shall have been
duly authorized and reserved for issuance which equals or exceeds
(i) the number of Common Shares issuable as of the Closing
Date and (ii) the maximum number of Warrant Shares issuable
upon exercise of the Warrants. Neither the filing of the
Registration Statement nor the offering or sale of the Securities
as contemplated by this Agreement gives rise to any rights, other
than those which have been waived or satisfied, for or relating to
the registration of any shares of Common Stock. Upon exercise of
the Warrants, the Warrant Shares will be validly issued, fully paid
and nonassessable and free from all preemptive or similar rights,
taxes, liens and charges with respect to the issue thereof, with
the holders being entitled to all rights accorded to a holder of
Common Stock.
(f) Equity Capitalization . As of the date hereof and as
of the Closing Date, the Company has or will have, as the case may
be, an authorized, issued and outstanding capitalization as is set
forth in the Registration Statement and the Prospectus (subject, in
each case, to the issuance of shares of Common Stock upon exercise
of stock options and warrants disclosed as outstanding in the
Registration Statement and the Prospectus and the grant or issuance
of options or shares under existing equity compensation plans or
stock purchase plans described in the Registration Statement or the
Prospectus), and such authorized capital stock conforms to the
description thereof set forth in the Registration Statement and the
Prospectus. All of the Securities conform to the description
thereof contained in the Registration Statement and the Prospectus.
The form of certificates for the Common Shares and the Warrant
Shares will conform to the corporate law of the jurisdiction of the
Company’s incorporation.
(g) Disclosure .
(i) The SEC has not issued an 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 Securities, and no proceeding for that purpose or pursuant to
Section 8A of the 1933 Act has been instituted or, to the
Company’s knowledge, threatened by the SEC. The Registration
Statement conforms, and the Prospectus and any amendments or
supplements thereto will conform to the requirements of the 1933
Act and the Rules and Regulations. The documents incorporated, or
to be incorporated, by reference in the Prospectus, at the time
filed with the SEC conformed in all material respects, or will
conform in all respects, to the requirements of the Securities
Exchange Act of 1934, as amended (the " 1934 Act ") or the
1933 Act, as applicable, and the Rules and Regulations. The
Registration Statement and any amendment thereto do not contain,
and on the Closing Date will not contain, any untrue statement of a
material fact and do not omit, and on the Closing Date will not
omit, to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The
Prospectus and any amendments and supplements thereto do not
contain, and on the Closing
- 6 -
Date will not contain, any untrue statement of a
material fact; and do not omit, and on the Closing Date will not
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 the Registration Statement or the Prospectus, or
any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company by or
on behalf of the Buyers, specifically for use therein.
(ii) Each Issuer Free Writing Prospectus, as of its issue date
and at all subsequent times through the completion of the public
offer and sale of the Securities or until any earlier date that the
Company notified or notifies the Buyers as described in the next
sentence, 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 document incorporated by reference therein that has
not been superseded or modified. If at any time following issuance
of an Issuer Free Writing Prospectus, there occurred or occurs an
event or development as a result of which such Issuer Free Writing
Prospectus included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact
necessary in order to make the statements therein, in light of the
circumstances, not misleading, the Company has notified or will
notify promptly the Buyers so that any use of such Issuer Free
Writing Prospectus may cease until it is amended or supplemented.
The foregoing two sentences do not apply to statements or omissions
from any Issuer Free Writing Prospectus based upon and in
conformity with written information furnished to the Company by the
Buyers specifically for use therein.
(iii) The Company confirms that neither it nor any other Person
acting on its behalf has provided any of the Buyers or their agents
or counsel with any information that constitutes or could
reasonably be expected to constitute material, nonpublic
information, that is not included in the 8-K Filing (as defined
below). The Company understands and confirms that each of the
Buyers will rely on the foregoing representations in effecting
transactions in securities of the Company. All disclosure provided
to the Buyers regarding the Company or any of its Subsidiaries,
their business and the transactions contemplated hereby, including
the Schedules to this Agreement, furnished by or on behalf of the
Company does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under
which they were made, not misleading. No event or circumstance has
occurred or information exists with respect to the Company or any
of its Subsidiaries or its or their business, properties,
prospects, operations or financial conditions, which, under
applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly
announced or disclosed.
(h) Offering Materials . The Company has not, directly or
indirectly, distributed and will not distribute any offering
material in connection with the offering and sale of the Securities
other than any Preliminary Prospectus, the Prospectus, any
Permitted Free Writing Prospectus (as defined below) and other
materials, if any, permitted under the 1933 Act. The Company will
file with the SEC all Issuer Free Writing Prospectuses in the time
required under Rule 433(d) under the 1933 Act. The Company has
satisfied or will satisfy the conditions in Rule 433 under the 1933
Act to avoid a requirement to file with the SEC any electronic road
show.
- 7 -
(i) Ineligible Issuer Status . At the time
of filing the Registration Statement and (ii) as of the date
hereof (with such date being used as the determination date for
purposes of this clause (ii)), the Company was not and is not an
"ineligible issuer" (as defined in Rule 405 under the 1933 Act,
without taking into account any determination by the SEC pursuant
to Rule 405 under the 1933 Act that it is not necessary that the
Company be considered an ineligible issuer), including, without
limitation, for purposes of Rules 164 and 433 under the 1933 Act
with respect to the offering of the Securities as contemplated by
the Registration Statement.
(j) Financial Statements . The consolidated financial
statements of the Company and the Subsidiaries, together with
related notes and schedules as set forth or incorporated by
reference in the Registration Statement, the General Disclosure
Package and the Prospectus, present fairly in all material respects
the financial position and the results of operations and cash flows
of the Company and the consolidated Subsidiaries, at the indicated
dates and for the indicated periods. Such consolidated financial
statements and related schedules have been prepared in accordance
with generally accepted principles of accounting (" GAAP "),
consistently applied throughout the periods involved, except as
disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The
summary and selected consolidated financial and statistical data
included or incorporated by reference in the Registration
Statement, the General Disclosure Package and the Prospectus
presents fairly in all material respects the information shown
therein, at the indicated dates and for the indicated periods, and
such data has been compiled on a basis consistent with the
financial statements presented therein and the books and records of
the Company. All disclosures, if any, contained in the Registration
Statement, the General Disclosure Package and the Prospectus
regarding "non-GAAP financial measures" (as such term is defined by
the Rules and Regulations) comply in all material respects with
Regulation G of the 1934 Act and Item 10 of Regulation S-K
under the 1933 Act, to the extent applicable. The Company and the
Subsidiaries do not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations
or any "variable interest entities" within the meaning of Financial
Accounting Standards Board Interpretation No. 46), not
disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus. There are no financial statements
(historical or pro forma) that are required to be included in the
Registration Statement, the General Disclosure Package or the
Prospectus that are not included as required.
(k) Accountants . Ernst & Young, LLP, who have
certified certain of the financial statements filed with the SEC as
part of, or incorporated by reference in, the Registration
Statement, the General Disclosure Package and the Prospectus, has
represented to the Company that it is an independent registered
public accounting firm with respect to the Company and the
Subsidiaries within the meaning of the 1933 Act and the applicable
Rules and Regulations and the Public Company Accounting Oversight
Board (United States) (the " PCAOB ").
(l) Weaknesses or Changes in Internal Accounting Controls
. Neither the Company nor any of the Subsidiaries is aware of
(i) any material weakness in its internal control over
financial reporting or (ii) change in internal control over
financial reporting that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control
over financial reporting.
- 8 -
(m) Sarbanes-Oxley . Solely to the extent
that the Sarbanes-Oxley Act of 2002, as amended, and the rules and
regulations promulgated by the SEC and The NASDAQ Global Market
(the " Principal Market ") thereunder (collectively, the "
Sarbanes-Oxley Act ") has been applicable to the Company,
there is and has been no failure on the part of the Company to
comply in all respects with any provision of the Sarbanes-Oxley
Act. The Company has taken all necessary actions to ensure that it
is in compliance in all respects with all provisions of the
Sarbanes-Oxley Act that are in effect with respect to which the
Company is required to comply and is actively taking steps to
ensure that it will be in compliance with the other provisions of
the Sarbanes-Oxley Act which will become applicable to the
Company.
(n) Litigation . There is no action, suit, claim or
proceeding pending or, to the knowledge of the Company, threatened
against the Company or any of the Subsidiaries before any court or
administrative agency or otherwise which if determined adversely to
the Company or any of the Subsidiaries would have, individually or
in the aggregate, a Material Adverse Effect, except as set forth in
the Registration Statement, the General Disclosure Package and the
Prospectus.
(o) Title . The Company and the Subsidiaries have good
and marketable title to all of the material properties and assets
reflected in the consolidated financial statements hereinabove
described or described in the Registration Statement, the General
Disclosure Package and the Prospectus, subject to no lien,
mortgage, pledge, charge or encumbrance of any kind except those
reflected in such financial statements or described in the
Registration Statement, the General Disclosure Package and the
Prospectus or which are not material in amount or would not
materially interfere with the use to be made of such properties or
assets. The Company and the Subsidiaries occupy their leased
properties under valid and binding leases conforming in all
material respects to the description thereof set forth in the
Registration Statement, the General Disclosure Package and the
Prospectus.
(p) Taxes . The Company and the Subsidiaries have filed
all federal, state, local and foreign tax returns which have been
required to be filed and have paid all taxes indicated by such
returns and all assessments received by them or any of them to the
extent that such taxes have become due and are not being contested
in good faith and for which an adequate reserve for accrual has
been established in accordance with GAAP. All tax liabilities have
been adequately provided for in the consolidated financial
statements of the Company in accordance with GAAP, and the Company
does not know of any actual or proposed additional material tax
assessments.
(q) Absence of Certain Changes . Since the respective
dates as of which information is given in the Registration
Statement, the General Disclosure Package and the Prospectus, as
each may be amended or supplemented, there has not been any
Material Adverse Effect, and there has not been any material
transaction entered into by the Company or the Subsidiaries, other
than transactions in the ordinary course of business and
transactions described in the Registration Statement, the General
Disclosure Package and the Prospectus, as each may be amended or
supplemented. The Company and the Subsidiaries have no material
contingent obligations which are not disclosed in the
Company’s consolidated financial statements which are
included in the Registration Statement, the General Disclosure
Package and the Prospectus.
- 9 -
(r) No Conflicts . Neither the Company nor
any of the Subsidiaries is or with the giving of notice or lapse of
time or both, will be, (i) in violation of its certificate of
incorporation, by-laws, or other organizational documents or
(ii) in violation of or in default under any agreement, lease,
contract, indenture or other instrument or obligation to which it
is a party or by which it, or any of its properties, is bound and,
solely with respect to this clause (ii), which violation or default
would have a Material Adverse Effect. The execution and delivery of
this Agreement and the consummation of the transactions herein
contemplated and the fulfillment of the terms hereof will not
conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust or other agreement or instrument to which
the Company or any Subsidiary is a party or by which the Company or
any Subsidiary or any of their respective properties is bound, or
of the certificate of incorporation or by-laws of the Company or
any law, order, rule or regulation judgment, order, writ or decree
applicable to the Company or any Subsidiary of any court or of any
government, regulatory body or administrative agency or other
governmental body having jurisdiction, except to the extent that
such conflict, breach or default would not have a Material Adverse
Effect.
(s) Contracts . There is no document, contract or other
agreement required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required by the 1933
Act or the Rules and Regulations. Each description of a contract,
document or other agreement in the Registration Statement and the
Prospectus accurately reflects in all material respects the terms
of the underlying contract, document or other agreement. Each
contract, document or other agreement described in the Registration
Statement and Prospectus or listed in the exhibits to the
Registration Statement or incorporated by reference is in full
force and effect and is valid and enforceable by and against the
Company in accordance with its terms (except as rights to indemnity
and contribution thereunder may be limited by federal or state
securities laws and matter of public policy and except as the
enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and by general
equitable principle and except for those agreements that have
expired by their terms). Neither the Company nor any of its
Subsidiaries nor, to the Company’s knowledge, any other party
is in default in the observance or performance of any term or
obligation to be performed by it under any such agreement or any
other agreement or instrument to which the Company or its
Subsidiaries is a party or by which the Company or its Subsidiaries
or their respective properties or businesses may be bound, and no
event has occurred which with notice or lapse of time or both would
constitute such a default, in any such case in which the default or
event, individually or in the aggregate, would have a Material
Adverse Effect.
(t) Regulatory Approvals . Each approval, consent, order,
authorization, designation, declaration or filing by or with any
regulatory, administrative or other governmental body necessary in
connection with the execution and delivery by the Company of this
Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by
the SEC, the Financial Industry Regulatory Authority, Inc. (the "
FINRA ") or such additional steps as may be required under
state securities or Blue Sky laws) has been obtained or made and is
in full force and effect.
- 10 -
(u) Intellectual Property . Except as
described in the Registration Statement or in any document
incorporated by reference therein, the Company and each of the
Subsidiaries hold all material licenses, certificates and permits
from governmental authorities which are necessary to the conduct of
their businesses in the manner in which they are being conducted;
the Company and the Subsidiaries each own or possess the right to
use all patents, patent rights, trademarks, trade names, service
marks, service names, copyrights, license rights, know-how
(including trade secrets and other unpatented and unpatentable
proprietary or confidential information, systems or procedures) and
other intellectual property rights (" Intellectual Property
") necessary to carry on their business in all material respects in
the manner in which it is being conducted; to the Company’s
knowledge, neither the Company nor any of the Subsidiaries has
infringed, and none of the Company or the Subsidiaries have
received notice of conflict with, any Intellectual Property of any
other person or entity. The Company has taken all steps reasonably
necessary to secure ownership interests in Intellectual Property
created for it by any contractors. There are no outstanding
options, licenses or agreements of any kind relating to the
Intellectual Property of the Company that are required to be
described in the Registration Statement, the General Disclosure
Package and the Prospectus and are not described therein in all
material respects. The Company is not a party to or bound by any
options, licenses or agreements with respect to the Intellectual
Property of any other person or entity that are required to be set
forth in the Prospectus and are not described therein in all
material respects. None of the technology employed by the Company
and material to the Company’s business has been obtained or
is being used by the Company in violation of any contractual
obligation binding on the Company or, to the Company’s
knowledge, any of its officers, directors or employees or, to the
Company’s knowledge, otherwise in violation of the rights of
any persons; the Company has not received any written or oral
communications alleging that the Company has violated, infringed or
conflicted with, or, by conducting its business as set forth in the
Registration Statement, the General Disclosure Package and the
Prospectus, would violate, infringe or conflict with, any of the
Intellectual Property of any other person or entity. The Company
knows of no infringement by others of Intellectual Property owned
by or licensed to the Company.
(v) FDA; Studies . Since the respective dates as of which
information is set forth in the Registration Statement, the General
Disclosure Package and the Prospectus, (i) all of the
descriptions of the Company’s legal and governmental
proceedings and procedures before the United States Food and Drug
Administration (the " FDA ") or any other national,
departmental, state or local governmental body exercising
comparable authority are true and correct in all material respects,
(ii) the studies, tests and preclinical and clinical trials
(if any) conducted by or on behalf of the Company and its
Subsidiaries that are described in the Registration Statement, the
General Disclosure Package and the Prospectus were and, if still
pending, are (a) with respect to the foregoing conducted by
employees of the Company or any of its Subsidiaries ("Company
Studies"), being conducted in accordance with experimental
protocols, procedures and controls pursuant to, where applicable,
accepted professional scientific standards, in each case in all
necessary respects and in all material respects; and (b) with
respect to the foregoing conducted on behalf of the Company or
independently by others using the Company’s or any of its
Subsidiaries’ technologies, products or product candidates ("
Independent Studies "), to the Company’s knowledge,
after due inquiry, being conducted in accordance with experimental
protocols, procedures
- 11 -
and controls pursuant to, where applicable,
accepted professional scientific standards, in each case in all
necessary respects and in all material respects; (iii) the
descriptions of the results of the Company Studies (if any), and,
to the Company’s knowledge, after due inquiry, the
Independent Studies (if any), contained in the Registration
Statement, the General Disclosure Package and the Prospectus are
true and correct in all material respects; and (iv) except as
disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus, neither the Company nor its
Subsidiaries have received any notices or correspondence from the
FDA, or any national, state or local governmental body exercising
comparable authority requiring the termination, suspension or
material modification of any of the Company Studies or Independent
Studies (if any).
(w) Manipulation of Prices . Neither the Company, nor to
the Company’s knowledge, any of its affiliates, has taken or
may take, directly or indirectly, any action designed to cause or
result in, or which has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the
price of the shares of Common Stock to facilitate the sale or
resale of the Securities.
(x) Investment Company Act . Neither the Company nor any
Subsidiary is or, after giving effect to the offering and sale of
the Securities contemplated hereunder and the application of the
net proceeds from such sale as described in the Prospectus, will be
an "investment company" within the meaning of such term under the
Investment Company Act of 1940 as amended (the " 1940 Act
"), and the rules and regulations of the SEC thereunder.
(y) Internal Accounting Controls .
(i) The Company and each of the Subsidiaries maintains a system
of internal accounting controls sufficient to provide reasonable
assurances that (i) transactions are executed in accordance
with management’s general or specific authorization;
(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.
(ii) The Company has established and maintains "disclosure
controls and procedures" (as defined in Rules 13a-15(e) and
15d-15(e) under the 1934 Act); the Company’s "disclosure
controls and procedures" are reasonably designed to ensure that all
information (both financial and non-financial) required to be
disclosed by the Company in the reports that it files or submits
under the 1934 Act is recorded, processed, summarized and reported
within the time periods specified in the rules and regulations of
the 1934 Act, and that all such information is accumulated and
communicated to the Company’s management as appropriate to
allow timely decisions regarding required disclosure and to make
the certifications of the Chief Executive Officer and Chief
Financial Officer of the Company required under the 1934 Act with
respect to such reports.
(z) Industry and Market Data . The statistical,
industry-related and market-related data included in the
Registration Statement, the General Disclosure Package and the
Prospectus are based on or derived from sources which the Company
reasonably and in good faith believes are reliable and accurate,
and such data agree in all material respects with the sources from
which they are derived.
- 12 -
(aa) Money Laundering Laws . The
operations of the Company and the Subsidiaries are and have been
conducted at all times in compliance with applicable financial
record-keeping and reporting requirements of the Currency and
Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations
thereunder (collectively, the " Money Laundering Laws "),
and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any or its subsidiaries with respect to the Money
Laundering Laws is pending or, to the Company’s knowledge,
threatened.
(bb) Office of Foreign Assets Control . Neither the
Company nor, to the Company’s knowledge, any director,
officer, agent, employee or affiliate of the Company is currently
subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (" OFAC ");
and the Company will not directly or indirectly use the proceeds of
the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person
or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by
OFAC.
(cc) Insurance . The Company and each of the 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 engaged in similar businesses.
(dd) Employee Benefits . The Company and each Subsidiary
is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and
published
|
