13,750,000 Shares of Common Stock
Palatin Technologies, Inc.
(a Delaware corporation)
Common Stock
Underwriting Agreement
February 12, 2007
Pacific Growth Equities,LLC
One Bush Street, Suite 1700
San Francisco, California 94104
Ladies and Gentlemen:
Palatin
Technologies, Inc., a Delaware corporation (the “
Company ”), proposes to issue and sell to Pacific
Growth Equities, LLC (the “ Underwriter ”)
13,750,000 shares of Common Stock, $0.01 par value per share (the
“ Common Stock ”), of the Company (the “
Offered Securities ”).
1.
Representations and Warranties . The Company represents and
warrants to, and agrees with, the Underwriter as set forth below in
this Section.
(a)
A registration statement on Form S-3 (No. 333-132369) relating to
the Offered Securities, including a form of prospectus (the “
Initial Registration Statement ”), has been filed with
the Securities and Exchange Commission (the “
Commission ”) and was declared effective on March 31,
2006 (the “ Initial Registration Statement Effective
Date ”). As used in this Underwriting Agreement, “
Registration Statement ” as of any time means such
registration statement in the form then filed with the Commission,
including any amendment thereto, including a registration statement
(if any) filed pursuant to Rule 462(b) increasing the size of the
offering contemplated hereby, any document incorporated by
reference therein and any information in a prospectus or prospectus
supplement deemed or retroactively deemed to be a part thereof
pursuant to Rule 430B (“ Rule 430B ”) or 430C
(“ Rule 430C ”) under the Securities Act of
1933, as amended (the “ Act ”), that has not
been superseded or modified. “Registration Statement”
without reference to a time means the Registration Statement as of
the time of the first contract of sale for the Offered Securities,
which time shall be considered the “ Effective Date
” of the Registration Statement relating to the Offered
Securities, including a registration statement (if any) filed
pursuant to Rule 462(b) increasing the size of the offering
contemplated hereby. For purposes of this definition, information
contained in a form of prospectus or prospectus supplement that is
deemed retroactively to be a part of the Registration Statement
pursuant to Rule 430B shall be considered to be included in the
Registration Statement as of the time specified in Rule 430B. For
purposes of this Underwriting Agreement, “ Applicable
Time ” means 2:30 p.m. Pacific Standard Time on February
12, 2007.
“
Statutory Prospectus ” as of any time means the
prospectus relating to the Offered Securities that is included in
the Registration Statement immediately prior to that time,
including any document incorporated by reference therein and any
basic prospectus or prospectus supplement deemed to be a part
thereof pursuant to Rule 430B or 430C that has not been superseded
or modified. For purposes of this definition, information contained
in a form of prospectus (including a prospectus supplement) that is
deemed retroactively to be a part of the Registration Statement
pursuant to Rule 430B shall be considered to be included in the
Statutory Prospectus only as of the actual time that form of
prospectus (including a prospectus supplement) is filed with the
Commission pursuant to Rule 424(b) (“ Rule 424(b)
”) under the Act. “ Prospectus ” means the
Statutory Prospectus that discloses the public offering price and
other final terms of the Offered Securities and otherwise satisfies
Section 10(a) of the Act. “ Issuer Free Writing
Prospectus ” means any “issuer free writing
prospectus,” as defined in Rule 433 (“
Rule
433 ”) under the Act, relating to the Offered
Securities 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). “
General Use Issuer Free Writing Prospectus ” means any
Issuer Free Writing Prospectus that is intended for general
distribution to prospective investors, as evidenced by its being
specified in Schedule III . “ Limited Use Issuer
Free Writing Prospectus ” means any Issuer Free Writing
Prospectus that is not a General Use Issuer Free Writing
Prospectus.
(b)
On the Initial Registration Statement Effectiveness Date, at the
time of each amendment thereto for the purposes of complying with
Section 10(a)(3) of the Act (whether by post-effective amendment,
incorporated report or form of prospectus) and on the Effective
Date, the Registration Statement complied and will comply in all
material respects with the requirements of the Act and the rules
and regulations of the Commission (the “ Rules and
Regulations ”) and did not and will not contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein in light of the circumstances under which they
were made (with respect to the Prospectus and any supplement or
amendment thereto) not misleading. At the Applicable Time, the
Registration Statement and the Statutory Prospectus will comply in
all material respects with the requirements of the Act and the
Rules and Regulations, and neither of such documents contains, or
will contain, any untrue statement of a material fact or omits, or
will omit, to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
provided, however , that the Company makes no
representations or warranties as to the information contained in or
omitted from the Registration Statement or the Prospectus in
reliance upon and in conformity with information furnished herein
or in writing to the Company by or on behalf of the Underwriter
specifically for inclusion therein, it being understood and agreed
that the only such information is that described in Section 11
hereof.
(c)
The date of this Underwriting Agreement is not more than three
years subsequent to the Initial Registration Statement Effective
Date. If, immediately prior to the third anniversary of the Initial
Registration Statement Effective Date, any of the Offered
Securities remain unsold by the Underwriters, the Company, prior to
that third anniversary will, if it has not already done so, file a
new shelf registration statement relating to the Offered
Securities, in a form satisfactory to the Underwriters, will use
commercially reasonable efforts to cause such registration
statement to be declared effective within 180 days after that third
anniversary, and will take all other action necessary or
appropriate to permit the public offering and sale of the Offered
Securities to continue as contemplated in the expired registration
statement relating to the Offered Securities. References herein to
the Registration Statement shall include such new shelf
registration statement.
(d)
As of the Applicable Time, neither (i) the General Use Issuer Free
Writing Prospectus(es) issued at or prior to the Applicable Time,
the Statutory Prospectus at the Applicable Time and the information
set forth in Schedule III , all considered together
(collectively, the “ General Disclosure Package
”), nor (ii) any individual Limited Use Issuer Free Writing
Prospectus, when considered together with the General Disclosure
Package, included any untrue statement of a material fact or
omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading. The preceding sentence does not
apply to statements in or omissions from any prospectus included in
the Registration Statement or any Issuer Free Writing Prospectus in
reliance upon and in conformity with written information furnished
herein or in writing to the Company by the Underwriter specifically
for use therein, it being understood and agreed that the
information furnished by the Underwriter consists only of the
information in Section 11 hereof.
(e)
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 Offered Securities or until any earlier date that the
Company notified or notifies the Underwriter 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 then contained in the Registration Statement. 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 conflicted or would conflict
with the information then contained in the Registration Statement
or 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 the light of the circumstances prevailing at
that subsequent time, not misleading, (i) the Company has promptly
notified or will promptly notify the Underwriter and (ii) the
Company has promptly amended or will promptly amend or supplement
such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission. The foregoing two sentences
do not apply to statements in or omissions from any Issuer Free
Writing Prospectus in reliance upon and in conformity with written
information furnished to the Company by the Underwriters
specifically for use therein, it being understood and agreed that
the information furnished by the Underwriters consists only of the
information described in Section 11 hereto. The Company has
complied with and will comply with Rule 433.
(f)
The Company and RhoMed Incorporated (the “ Subsidiary
”) have been duly incorporated and are validly existing
corporations in good standing under the laws of Delaware and New
Mexico, respectively, with full power and authority (corporate and
other) to own, lease and operate, as the case may be, their
respective properties and conduct their respective businesses as
described in the General Disclosure Package; and the Company is
duly qualified to do business as a foreign corporation in good
standing in New Jersey, which is the only jurisdiction in which the
conduct of its business requires such qualification, except where
the failure to be so qualified or be in good standing would not
reasonably be expected to have, individually or in the aggregate, a
material adverse effect on the business, assets, properties,
financial condition or results of operations of the Company
(“ Material Adverse Effect ”). The Company has
not received a written notification that any proceeding has been
instituted in any such jurisdiction, revoking, limiting or
curtailing, or seeking to revoke, limit or curtail, such power and
authority or qualification, and to the Company’s knowledge,
no proceeding has been instituted in any such jurisdiction,
revoking, limiting or curtailing, or seeking to revoke, limit or
curtail, such power and authority or qualification. The Company is
in possession of and operating in material compliance with all
authorizations, licenses, certificates, consents, orders and
permits from state, federal and other regulatory authorities that
are material to the conduct of its business, all of which are valid
and in full force and effect. Neither the Company nor the
Subsidiary is in violation of its charter or bylaws. The Company
does not own or control, directly or indirectly, any corporation,
association or other entity other than the Subsidiary. The
Subsidiary is not actively conducting business.
(g)
The Company has all requisite corporate power and authority to
enter into this Underwriting Agreement and perform the transactions
contemplated hereby. This Underwriting Agreement has been duly
authorized, executed and delivered by the Company and is a valid
and binding agreement on the part of the Company, enforceable in
accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors’ rights generally or
by general equitable principles. The execution, delivery and
performance of this Underwriting Agreement and the consummation of
the transactions herein contemplated will not result in (A) any
violation of the charter or bylaws of the Company or the Subsidiary
or (B) a breach or violation of any of the material terms and
provisions of, or constitute a default under any contract,
agreement, license, understanding, indenture, mortgage, deed of
trust, loan agreement, joint venture, lease (including without
limitation any sale and leaseback arrangement) or bond, debenture,
note or other evidence of indebtedness, to which the Company or the
Subsidiary is a party or by or to which it or its properties
(including without limitation all Company Intellectual Property (as
defined in Section 1(v)) are or may be bound or subject (each, a
“ Contract ”) or any law, order, ruling, rule,
regulation, writ, assessment, injunction, judgment or decree of any
government or governmental court, agency or body, domestic or
foreign, having jurisdiction over the Company, the Subsidiary or
over any of their respective properties (including without
limitation all Company Intellectual Property) or Contracts (“
Government Entity ”) or by or to which they or such of
their properties or Contracts are or may be bound or subject (each,
a “ Law ”), except in the case of this clause
(B), such defaults or violations which would not reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect. No consent, approval, authorization or order of or
qualification with any Government Entity is required for the
execution and delivery of this Underwriting Agreement and the
consummation by the Company of the transactions herein
contemplated, except such consents (i) that will be obtained prior
to the Closing Date (as defined in Section 2) and (ii) as may be
required under the Act, the Securities Exchange Act of 1934, as
amended (the “ Exchange Act ”) (if applicable),
the Rules and Regulations, or under state or other securities or
blue sky laws, the American Stock Exchange (the “ AMEX
”) or the National Association of
Securities Dealers, Inc. (the
“ NASD ”), all of which requirements will be
satisfied in all material respects at or prior to the Closing
Date.
(h)
Except as disclosed in the General Disclosure Package, there are no
actions, suits, claims, investigations or proceedings pending or,
to the Company’s knowledge, threatened to which the Company
or the Subsidiary or, to the Company’s knowledge, to which
any of their respective directors or officers is a party, or of
which any of their respective properties (including without
limitation all Company Intellectual Property) or any Contract is
the subject, at law or in equity, before or by any federal, state,
local or foreign governmental or regulatory commission, board,
body, authority or agency which, if adversely decided, would be
reasonably likely to result in a decision, ruling, finding,
judgment, decree, order or settlement having a Material Adverse
Effect or to prevent consummation of the transactions contemplated
hereby. There are no Contracts of a character required to be
described or referred to in the General Disclosure Package, and/or
filed as an exhibit to, the Registration Statement or the
Prospectus by the Act, the Exchange Act or the Rules and
Regulations which have not been accurately described in all
material respects in the General Disclosure Package, and/or filed
as an exhibit to, the Registration Statement or the Statutory
Prospectus at the Applicable Time, as applicable. The Contracts
described in the General Disclosure Package are in full force and
effect and are valid agreements, enforceable by the Company, except
as the enforcement thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors’ rights generally or by
general equitable principles. No event has occurred, and no
circumstance or condition exists, that (with or without notice or
lapse of time) (A) has resulted or is reasonably likely to result
in a breach, default, violation or waiver of any Contract or any
provision thereof; (B) gives or is reasonably likely to give any
party to any Contract the right to declare a breach, default or
violation of, or exercise any remedy under such Contract; (C) gives
or is reasonably likely to give any party to any Contract the right
to cancel, terminate, modify or be excused from performance of any
obligations under such Contract; or (D) has resulted or is
reasonably likely to result in a violation of any Law or in
imposition of any fines, penalties, damages, injunctions,
prohibitions or other sanctions, except in the cases of clauses
(A), (B) and (C), where such breaches, defaults, violations,
waivers, remedies, cancellations, terminations, modifications,
excuses or impositions would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse
Effect.
(i)
All outstanding shares of capital stock of the Company and the
Subsidiary have been duly authorized and validly issued and are
fully paid and nonassessable, have been issued in compliance with
all federal and state securities laws, and have not been issued in
violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities. The Company owns all of the
outstanding shares of the Subsidiary. The authorized, issued and
outstanding capital stock of the Company is as set forth in the
Statutory Prospectus at the Applicable Time and conforms in all
material respects to the statements relating thereto contained in
the General Disclosure Package (and such statements correctly state
the substance of the instruments defining the capitalization of the
Company). The Offered Securities have been duly authorized for
issuance and sale to the Underwriter pursuant to this Underwriting
Agreement and, when issued and delivered by the Company against
payment therefor in accordance with the terms of this Underwriting
Agreement, will be duly and validly issued and fully paid and
nonassessable, and will be sold free and clear of any pledge, lien,
security interest, encumbrance, claim or equitable interest. No
preemptive right, co-sale right, registration right, right of first
refusal or other similar right of stockholders exists with respect
to any of the Offered Securities or the issuance and sale thereof,
other than those that have been expressly waived prior to the date
hereof, those that will have been expressly waived prior to the
Closing Date (as defined in Section 2 below), and those that will
automatically expire upon or will not apply to the consummation of
the transactions contemplated on the Closing Date. No further
approval or authorization of any stockholder, the Board of
Directors of the Company or others is required for the issuance and
sale or transfer of the Offered Securities, except as may be
required under state or other securities or blue sky laws, or the
NASD. Except as disclosed in the General Disclosure Package and the
financial statements of the Company, and the related notes thereto,
included or incorporated by reference in the Statutory Prospectus
at the Applicable Time, the Company does not have outstanding any
options to purchase, any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of
its capital stock or any such options, rights, registration rights,
convertible securities or obligations. The description of the
Company’s stock option plans, employee stock purchase plans
or similar arrangements, and the options or other rights granted
and exercised thereunder, set forth
in the General Disclosure Package
accurately and fairly presents, in all material respects, the
information required to be shown with respect to such plans,
arrangements, options and rights. All stock option awards granted
by the Company have been appropriately authorized by the Board of
Directors of the Company or a duly authorized committee thereof,
including approval of the exercise or purchase price or the
methodology for determining the exercise or purchase price and the
substantive terms of the stock options awards.
(j)
The Company meets the eligibility requirements for the use of
Commission Form S-3 to register a primary offering of securities.
When filed with the Commission, all of the Company’s Exchange
Act reports incorporated by reference into the Statutory Prospectus
at the Applicable Time conformed, to the extent applicable, in all
material respects to the requirements of the Exchange Act and the
Rules and Regulations.
(k)
KPMG LLP, whose report on the financial statements of the Company
is filed with the Commission and is incorporated by reference in
the Registration Statement, the Statutory Prospectus at the
Applicable Time and the Prospectus, are independent registered
public accountants as required by the Act and the Rules and
Regulations. Except as described in the General Disclosure Package
and as preapproved in accordance with the requirements set forth in
Section 10A of the Exchange Act, to the Company’s knowledge,
KPMG LLP has not engaged in any “prohibited activities”
(as defined in Section 10A of the Exchange Act) on behalf of the
Company.
(l)
The financial statements of the Company, together with the related
schedules and notes, included in or incorporated by reference in
the Registration Statement and included in the General Disclosure
Package: (i) present fairly, in all material respects, the
financial position of the Company as of the dates indicated and the
results of operations and cash flows of the Company for the periods
specified; (ii) have been prepared in compliance with requirements
of the Act and the Rules and Regulations and in conformity with
generally accepted accounting principles in the United States
applied on a consistent basis during the periods presented and the
schedules included in the Registration Statement present fairly, in
all material respects, the information required to be stated
therein ( provided, however , that the statements that are
unaudited are subject to normal year-end adjustments and do not
contain certain footnotes required by generally accepted accounting
principles); (iii) comply with the antifraud provisions of the
federal securities laws; and (iv) describe accurately, in all
material respects, the controlling principles used to form the
basis for their presentation. There are no financial statements
(historical or pro forma) and/or related schedules and notes that
are required to be included in the Registration Statement, the
Statutory Prospectus at the Applicable Time and the Prospectus that
are not included as required by the Act, the Exchange Act and/or
the Rules and Regulations.
(m)
Subsequent to the respective dates as of which information is given
in the Registration Statement and the General Disclosure Package,
there has not been (i) any change, development or event that would
reasonably be expected to result, individually or in the aggregate,
in a Material Adverse Effect, (ii) any transaction that is material
to the Company, (iii) any obligation, direct or contingent, that is
material to the Company, incurred by the Company or either
Subsidiary, (iv) any change in the capital stock or outstanding
indebtedness of the Company that is material to the Company, (v)
any dividend or distribution of any kind declared, paid or made on
the capital stock of the Company or (vi) any loss or damage
(whether or not insured) to the property of the Company that has
been sustained or will have been sustained that would reasonably be
expected to have, individually or in the aggregate, a Material
Adverse Effect.
(n)
Except as set forth in the General Disclosure Package or as limited
by agreements disclosed in the General Disclosure Package: (i) the
Company (A) has good and marketable title to all properties and
assets described in the General Disclosure Package as owned by it
and (B) owns or possesses adequate licenses or other rights of use
to all patents, patent applications (for the purpose of this
sentence, a patent application shall be considered to be the patent
that would issue from such patent application as currently
pending), patent rights, inventions, trade secrets, know-how,
trademarks, service marks, trade names, domain names, copyrights
and other information (collectively, “Intellectual
Property”) that is necessary to conduct its business as it is
or may in the future be conducted, as such business or potential
future business is described in the General Disclosure Package, in
the case of clauses (A) and (B) free and clear of any pledge, lien,
security interest, encumbrance, claim or
equitable interest, whether
imposed by agreement, contract, understanding, law, equity or
otherwise, except for Permitted Liens (as defined below) or where
any failure to have good and marketable title to such properties
and assets, or own or possess such adequate licenses or other
rights of use to such Intellectual Property, individually or in the
aggregate, would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect; and (ii) the
Company has valid and enforceable leases, including without
limitation any leases that are the subject of any sale and
leaseback arrangement, for all properties described in the General
Disclosure Package as leased by it, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or
affecting creditors’ rights generally or by general equitable
principles. Except as set forth in the General Disclosure Package,
the Company owns or leases all such properties as are necessary to
its operations as now conducted. A “ Permitted Lien
” shall mean (i) liens for taxes not yet due, (ii) mechanics
liens and similar liens for labor, materials or supplies incurred
in the ordinary course of business for amounts that are not
delinquent and (iii) any liens that individually or in the
aggregate are not material.
(o)
The Company and the Subsidiary have timely filed all federal, state
and foreign income and franchise tax returns required to be filed
by the Company and the Subsidiary on or prior to the date hereof,
and has paid all taxes shown thereon as due, and there is no tax
deficiency that has been or, to the Company’s knowledge,
might be asserted against the Company or the Subsidiary that might
reasonably be expected to have a Material Adverse Effect. All
material tax liabilities are adequately provided for on the books
of the Company.
(p)
The Company has established and 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 generally accepted
accounting principles in the United States 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.
(q)
Except as described in the General Disclosure Package, the
Company’s Board of Directors has validly appointed an Audit
Committee whose composition satisfies the requirements of Section
121(B) of the Company Guide of the American Stock Exchange LLC
(“ AMEX “) and the Board of Directors and/or the
Audit Committee has adopted a charter that satisfies the
requirements of Section 121(B) of AMEX’s Company Guide. The
Audit Committee has reviewed the adequacy of its charter within the
past 12 months.
(r)
The Company has established and maintains disclosure controls and
procedures (as such term is defined in Rules 13a-15 and 15d-15
under the Exchange Act). Since the date of the most recent
evaluation of such disclosure controls and procedures, except as
set forth in the General Disclosure Package, there have been no
significant changes in internal controls or in other factors that
could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and
material weaknesses. The Company is in compliance in all material
respects with all provisions currently in effect and applicable to
the Company of the Sarbanes-Oxley Act of 2002, and all rules and
regulations promulgated thereunder or implementing the provisions
thereof.
(s)
The Company maintains insurance with insurers of recognized
financial responsibility of the types and in the amounts reasonably
believed to be adequate for its business and consistent with
insurance coverage maintained by similar companies in similar
businesses, including, but not limited to, insurance covering the
acts and omissions of directors and officers, real and personal
property owned or leased by the Company against theft, damage,
destruction, acts of vandalism and all other risks customarily
insured against, all of which insurance is in full force and
effect; and the Company has no reason to believe that it will not
be able to renew its existing insurance coverage as and when such
coverage expires or to obtain similar coverage from similar
insurers as may be necessary to continue its business at a cost
that might not reasonably be expected to have a Material Adverse
Effect.
(t)
Neither the Company nor the Subsidiary has sustained since the date
of the latest financial
statements included in the
General Disclosure Package any losses or interferences with its
business from fire, explosion, flood or other calamity, whether or
not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth
or contemplated in the General Disclosure Package or other than any
losses or interferences which might not reasonably be expected to
have, individually or in the aggregate, a Material Adverse
Effect.
(u)
No labor dispute with employees of the Company exists or, to the
Company’s knowledge, is imminent which would reasonably be
expected to have a Material Adverse Effect. No collective
bargaining agreement exists with any of the Company’s
employees and, to the Company’s knowledge, no such agreement
is imminent.
(v)
Neither the Company nor the Subsidiary has received any notice or
has any knowledge of (i) any potential infringement or
misappropriation by others of Intellectual Property that the
Company or the Subsidiary owns or for which the Company or the
Subsidiary possesses licenses or other rights of use (“
Company Intellectual Property ”), (ii) any
Intellectual Property of others that conflicts or interferes with
Company Intellectual Property or (iii) any infringement or
misappropriation of Intellectual Property of others by or on behalf
of the Company or the Subsidiary in the conduct of its business as
it is or as it may in the future be conducted, in each case as such
business or potential future business is described in the General
Disclosure Package, that in each instance of subsections (i), (ii)
or (iii) might reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect if the subject of a
decision, ruling, finding, judgment, decree, order or settlement
that is in whole or in part unfavorable to the Company or the
Subsidiary. Except as disclosed in the General Disclosure Package
or as limited by agreements disclosed in the General Disclosure
Package, with respect to all patents, copyrights, trademarks and
applications for any of the foregoing included in Company
Intellectual Property, either the Company or the Subsidiary
exclusively holds the first rights to enforce, protect and defend
such Company Intellectual Property and to protect the subject
matter thereof by bringing claims, demands, suits and actions and
proceedings against others for any and all legal and equitable
remedies by reason of past, present and future infringement of such
Company Intellectual Property. Except as disclosed in the General
Disclosure Package or agreements disclosed in the General
Disclosure Package, no patent, copyright, trademark or application
for any of the foregoing included in the Company Intellectual
Property is currently the subject of or subject to any license or
sublicense to a third party or the subject of or subject to any
license, contract, agreement or understanding pursuant to which the
Company is or may become obligated to transfer or grant to others
any right, title or interest in or to any such Company Intellectual
Property, except for such licenses, sublicenses, transfers and
grants that would not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect. To
the Company’s knowledge, no claim of any patent or patent
application (assuming the claims of patent applications issue as
currently pending) included in Company Intellectual Property is
unenforceable or invalid, except for such unenforceability or
invalidity that would not reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect. No
action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand has occurred, is pending, has been made,
or, to the knowledge of the Company, is threatened, that challenges
the validity, enforceability, scope, use, or ownership of any
right, title or interest in or to Company Intellectual Property.
For all patent applications owned by the Company or the Subsidiary
(collectively, “ Company Patent Applications
”), as well as all patent applications from which unexpired
patents licensed to or owned by the Company or the Subsidiary
(collectively, “ Company Patents ”) issued and
for which the Company or the Subsidiary controlled or controls
prosecution, there has been, to our knowledge, compliance with, for
U.S. Company Patents and applications from which they issued and
U.S. Company Patent Applications, any applicable PTO duty of candor
and disclosure and, for Non-U.S. Company Patents and applications
from which they issued and the non-U.S. Company Patent
Applications, any applicable ex-U.S. duties, responsibilities or
obligations similar or corresponding thereto. Each former and
current employee and independent contractor of the Company and the
Subsidiary has signed and delivered one or more written contracts
with the Company or the Subsidiary pursuant to which such employee
or independent contractor assigns to the Company or the Subsidiary
all of his, her or its rights in and to any inventions,
discoveries, improvements, works of authorship, know-how or
information made, conceived, reduced to practice, authored or
discovered in the course of employment by or performance of
services for the Company or the Subsidiary and any and all patent
rights, copyrights, trademark and other intellectual property
rights therein or thereto.
(w)
The Common Stock is registered pursuant to Section 12(g) of the
Exchange Act and is listed on the AMEX, and the Company has taken
no action designed to, or likely to have the effect of, terminating
the registration of the Common Stock under the Exchange Act or
delisting the Common Stock from the AMEX, subject to the
AMEX’s review and approval of the Listing of Additional
Shares Form. The Company is in compliance with all applicable AMEX
continued listing requirements. Except as described in the General
Disclosure Package, the Company has not received any notification
that the Commission or the AMEX is contemplating terminating such
registration or listing. The Company has taken all actions
necessary to list the Offered Securities for quotation on the AMEX.
The issuance and sale of the Offered Securities hereunder will not
contravene the rules and regulations of the AMEX, and no approval
of the stockholders of the Company will be required for the Company
to issue and deliver the Offered Securities.
(x)
The Company is not and, after giving effect to the offering and
sale of the Offered Securities, will not be an “investment
company,” as such term is defined in the Investment Company
Act of 1940, as amended.
(y)
The Company has not distributed and, prior to the later to occur of
(i) the Closing Date and (ii) completion of the distribution of the
Offered Securities, will not distribute, any offering materials in
connection with the offering and sale of the Offered Securities
other than the Registration Statement, the Prospectus or, subject
to Section 8, any other materials permitted by the Act and the
Rules and Regulations.
(z)
Neither the Company nor, to its knowledge, any of its affiliates
has taken, directly or indirectly, any action designed to or which
has constituted or which might reasonably be expected to cause or
result, under the Exchange Act or otherwise, in the stabilization
or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Offered Securities. The
Company acknowledges that the Underwriter may engage in passive
market making transactions in the Offered Securities on the AMEX in
accordance with Regulation M under the Exchange Act.
(aa)
The Company is in compliance in all material respects with all
currently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder (“ ERISA
”), except where a failure to so comply would not reasonably
be expected to have, individually or in the aggregate, a Material
Adverse Effect; to the Company’s knowledge, no unwaivable
“reportable event” (as defined in ERISA) has occurred
with respect to any “pension plan” (as defined in
ERISA) for which the Company would have any liability; the Company
has not incurred and does not expect to incur any material
liability under (i) Title IV of ERISA with respect to termination
of, or withdrawal from, any “pension plan” or (ii)
Sections 412 or 4971 of the Internal Revenue Code of 1986, as
amended, including the regulations and published interpretations
thereunder (the “ Code ”); and each
“pension plan” 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 would cause
the loss of such qualification.
(bb)
Except as set forth in the General Disclosure Package, (i) the
Company and the Subsidiary are in material compliance with all
rules, laws and regulations relating to the use, treatment, storage
and disposal of toxic substances and protection of health or the
environment (“ Environmental Laws ”) which are
applicable to its business; (ii) neither the Company nor the
Subsidiary has received any notice from any governmental authority
or third party of an asserted claim under Environmental Laws, which
claim is required to be disclosed in the General Disclosure
Package; (iii) to the Company’s knowledge, neither the
Company nor the Subsidiary is currently required to make future
material capital expenditures to comply with Environmental Laws;
and (iv) to the Company’s knowledge, no property that is
owned, leased or occupied by the Company or the Subsidiary has been
designated a Superfund site pursuant to the Comprehensive Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C.
Section 9601, et seq.), or otherwise designated as a contaminated
site under applicable state or local law.
(cc)
There are no outstanding loans, advances (except normal advances
for business expenses in the ordinary course of business) or
guarantees of indebtedness by the Company to or for the benefit of
any of the officers or directors of the Company or any of the
members of the families of any of them, except as disclosed in the
General Disclosure Package.
(dd)
To the Company’s knowledge, there are no affiliations or
associations between any member of the NASD and any of the
Company’s officers or directors or, to the Company’s
knowledge, any of the Company’s 5% or greater security
holders, except as set forth in the General Disclosure
Package.
(ee)
The Company has not sold or issued any shares of Common Stock
during the six-month period preceding the Applicable Time,
including any sales pursuant to Rule 144A under, or Regulations D
or S of, the Act, other than shares issued in a public offering
pursuant to a valid and effective registration statement filed with
the Commission or shares issued pursuant to employee benefit plans,
qualified stock option plans or other employee compensation plans
or pursuant to outstanding options, rights, warrants or convertible
securities. There are no registration rights with respect the
Company’s securities that have not been complied with or
properly waived in connection with the Registration Statement or
the Prospectus.
(ff)
No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) made by the
Company, its Subsidiari
