STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is dated as of October
15, 2003, by and among Alteon Inc., a corporation organized under the laws of
the State of Delaware (the "Company,") and each of the Purchasers whose names
are set forth on Exhibit A hereto (individually, a "Purchaser" and collectively,
the "Purchasers").
WHEREAS, the parties desire that, upon the terms and subject to the
conditions contained herein, the Company shall issue and sell to the Purchasers
and the Purchasers, severally, shall purchase up to an aggregate of 6,016,602
shares of the Company's common stock, $0.01 par value per share (the "Common
Stock"); and
WHEREAS, such purchase and sale will be made pursuant to (i) a
registration statement (No. 333-56512), including a prospectus, relating to
$50,000,000 of the Common Stock (the " 2001 Registration Statement"), and (ii) a
registration statement (No. 333-106048), including a prospectus, relating to
$100,000,000 of the Common Stock (the "2003 Registration Statement", and
together with the 2001 Registration Statement, the "Registration Statements"),
which the Company has filed with the Securities and Exchange Commission (the
"Commission").
The parties hereto agree as follows:
1. Purchase, Sale and Delivery of the Shares.
(a) On the basis of the representations, warranties and agreements
herein contained, but subject to the terms and conditions herein set forth, the
Company agrees to issue and sell to each of the Purchasers and each of the
Purchasers severally agrees to purchase from the Company the number of shares
provided for in Section 1(b) and Section 1(c) below (collectively, the
"Shares"), which will be sold at separate closings (each, a "Closing"). At each
Closing: (x) the Shares will be delivered by the Company to the Purchasers
against payment of the purchase price therefor by same day funds payable to the
order of the Company at the offices of Smith, Stratton, Wise, Xxxxx & Xxxxxxx,
LLP, 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 or such other location
as may be mutually acceptable; and (y) the Company shall issue and deliver to
each Purchaser: (i) a stock certificate, registered in the name of such
Purchaser and free of all restrictive legends, representing the number of Shares
(or, for Purchasers who provide the necessary account information to the
Company, the Company shall issue and deliver such Shares in a balance account
with The Depository Trust Company through its Deposit Withdrawal Agent
Commission System), and (ii) the legal opinion of the Company's outside counsel
in the form of Exhibit C. At or prior to each Closing the Company shall deliver
to each Purchaser a prospectus supplement with respect to each of the
Registration Statements, as applicable, reflecting the sale of the Shares
(including Shares that may be issued at the Additional Closing (each a
"Supplement", and together the "Supplements"). The initial closing under this
Agreement (the "Initial Closing") shall take place at 10:00 a.m. Eastern
Daylight Time on or about October 17, 2003, and an additional closing (the
"Additional Closing") shall take place seven (7) Business Days (as defined
below) after the Period End Date (as defined below), or at such other times and
dates as each Purchaser and the Company mutually determine, each of such times
and dates being herein referred to as the "Closing Date." Notwithstanding the
foregoing, the Additional Closing shall occur if, and only if, at least one
Purchaser has delivered a notice (an "Additional Closing Notice") to the Company
prior to the
sixtieth (60th) Business Day after the Initial Closing (the "Period End Date")
requesting an Additional Closing and initially specifying the number of Shares
to be purchased by such Purchaser at the Additional Closing. Such Period End
Date shall be extended for any Trading Days on which the Common Stock of the
Company is not traded on AMEX (as defined below). The term "Business Day" shall
mean (a) any day on which trading occurs on AMEX (or any successor thereto), or
(b) if trading does not occur on AMEX (or any successor thereto), any day other
than Saturday, Sunday or other day on which commercial banks in the city of New
York are authorized or required by law to remain closed.
(b) At the Initial Closing, each of the Purchasers agrees to purchase
from the Company the number of shares of Common Stock set forth opposite such
Purchaser's name on Exhibit A hereto (the aggregate of such shares being
referred to herein as the "Initial Shares"). The purchase price for each Initial
Share shall be $1.75 per share.
(c) At the Additional Closing, each of the Purchasers shall have the
right at its option to purchase, and the Company agrees to sell, up to the
number of shares of Common Stock set forth in such Purchaser's Additional
Closing Notice (if any), but in no event will a Purchaser have the right to
specify in its Additional Closing Notice a number of shares exceeding the number
opposite such Purchaser's name on Exhibit B hereto (the aggregate of such shares
being referred to herein as the "Additional Shares"). Within one (1) Business
Day after the Period End Date, the Company shall provide each Purchaser that has
delivered an Additional Closing Notice prior to the Period End Date a written
notice (the "Refused Shares Notice") specifying the number of Shares (if any)
that could have been purchased by Purchasers but that were not covered by an
Additional Closing Notice ("Refused Shares"). Each such Purchaser shall have the
right, at its option, to purchase up to its pro rata share of the Refused Shares
at the Additional Closing, and may exercise such right by delivering notice
thereof to the Company within three (3) Business Days of its receipt of the
Refused Shares Notice. The purchase price for each Additional Share shall be
$1.85 per share. No Purchaser shall have any obligation to purchase any Shares
at an Additional Closing. For purposes hereof, a Purchaser's "pro rata share"
shall be determined by multiplying the number of Refused Shares by a fraction
the numerator of which is the number of Shares specified in such Purchaser's
Additional Closing Notice and the denominator of which is the number of Shares
specified in all Additional Closing Notices delivered by Purchasers.
2. Representations and Warranties of the Company.
(a) The Company represents and warrants to, and agrees with, each
Purchaser as follows:
(i) The above-referenced registration statements have been
declared effective by the Commission and no stop order suspending the
effectiveness of such registration statements has been issued and no
proceeding for that purpose has been instituted or overtly threatened
by the Commission. Such registration statements, as amended or
supplemented at the time of this Agreement and including all material
incorporated by reference therein as of the date of this Agreement, is
hereinafter referred to as the "Registration Statements", and the
prospectuses included in the Registration Statements, as supplemented
as contemplated by Section 3(a) hereof to reflect the terms of the
offering of the Shares, as first filed with the Commission pursuant to
and in accordance with Rule 424(b) ("Rule 424(b)") or Rule 430A ("Rule
430A") under the
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Securities Act of 1933, as amended (the "Act"), including all material
incorporated by reference therein as of the date of such filing, is
hereinafter referred to as the "Prospectuses". On the effective date of
the Registration Statements and as of the date of any amendments or
supplements thereto, the Registration Statements conformed in all
material respects to the requirements of the Act and the rules and
regulations promulgated thereunder (the "Rules and Regulations"),
except to the extent of the information permitted to be omitted
pursuant to Rule 430A, and did not include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and, on the date of this Agreement, the Registration Statements conform
and, on the date of the filing of the Prospectuses, the Registration
Statements and the Prospectuses will conform in all material respects
to the requirements of the Act and the Rules and Regulations, and
neither of such documents includes or will include 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 not misleading.
(ii) The financial statements of the Company, together
with the notes thereto, set forth in the Registration Statements and
Prospectuses comply in all material respects with the requirements of
the Act and fairly present the financial condition of the Company as of
the dates indicated and the results of operations and changes in cash
flows for the periods therein specified in conformity with accounting
principles generally accepted in the United States consistently applied
throughout the periods involved (except as otherwise stated therein);
and the supporting schedules included in the Registration Statements
present fairly the information required to be stated therein. No other
financial statements or schedules are required to be included in the
Registration Statements or Prospectuses except such financial
statements or schedules that are disclosed therein. KPMG LLP, which
expressed its opinion with respect to the audited financial statements
of the Company as of December 31, 2002 and for the year then ended that
were filed as a part of the Registration Statements and included in the
Registration Statements and Prospectuses, were independent public
accountants as required by the Act and the Rules and Regulations.
(iii) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectuses;
and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires
such qualification and in which the failure to so qualify would have a
material adverse effect on the condition (financial or other),
business, properties, prospects or results of operations of the Company
("Material Adverse Effect").
(iv) The Shares and all of the outstanding shares of
capital stock of the Company have been duly authorized; all outstanding
shares of capital stock of the Company are, and, when the Shares have
been delivered and paid for in accordance with this Agreement on the
Closing Date, such Shares will be, validly issued, fully paid and
non-assessable, and will be free of any liens, encumbrances, preemptive
or similar rights
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(other than those created by Purchaser) and will conform to the
description thereof contained in the Prospectuses. Except as set forth
in the Registration Statements or as contemplated or required by any
document contained or incorporated by reference therein, there are no
preemptive rights or other rights to subscribe for or to purchase, or
any restriction upon the voting or transfer of, any shares of Common
Stock pursuant to the Company's charter, by-laws or any agreement or
other instrument to which the Company is a party or by which the
Company is bound.
(v) Except as set forth in the Prospectuses, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company for a
brokerage commission, finder's fee or other like payment in connection
with the transactions contemplated by this Agreement.
(vi) The outstanding shares of Common Stock are listed on
The American Stock Exchange ("AMEX").
(vii) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court, or any third
party, is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance and sale
of the Shares by the Company, except such as may be required under the
Act and under state securities laws.
(viii) Except as disclosed in the Prospectuses, the Company
has good and marketable title to all real properties and all other
properties and assets owned by it, in each case free from liens,
encumbrances and defects that would materially affect the value thereof
or materially interfere with the use made or to be made thereof by it;
and except as disclosed in the Prospectuses, the Company holds any
leased real or personal property under valid and enforceable leases
with no exceptions that would materially interfere with the use made or
to be made thereof by it.
(ix) The Company is not, and the transactions contemplated
hereby will not cause the Company to be, in violation of its articles
of incorporation, or by-laws, or other organizational documents, or of
any law, ordinance, administrative or governmental rule or regulation
applicable to the Company or of any decree of any court or governmental
agency or body having jurisdiction over the Company, which violation
would, if continued, have a Material Adverse Effect.
(x) The Company is not, and the transactions contemplated
hereby will not cause the Company to be, in breach, default or
violation in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of
indebtedness or in any material agreement, indenture, lease or other
instrument to which the Company is a party or by which any of the
Company's properties may be bound (a "Company Contract") which breach,
default or violation would, if continued, have a Material Adverse
Effect. To the Company's knowledge, all of the parties to Company
Contracts have complied in all material respects with the provisions
thereof, and no party is in material default thereunder.
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(xi) To the Company's knowledge, no party to a Company
Contract (a "Third Party") is a party to any other agreement, lease or
other instrument (a "Third Party Contract") under which the failure by
the Third Party to perform under such Third Party Contract would
adversely affect the Company's rights under the express terms of any of
the Company Contracts.
(xii) The Company possesses adequate certificates,
authorities or permits issued by appropriate governmental agencies or
bodies necessary to conduct the business now operated by it (except for
any such certificate, authority or permit with respect to which the
failure to obtain would not individually or in the aggregate have a
Material Adverse Effect) and has not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company, would
individually or in the aggregate have a Material Adverse Effect.
(xiii) No labor dispute with the employees of the Company
exists or, to the knowledge of the Company, is imminent that might have
a Material Adverse Effect.
(xiv) Except as disclosed in the Prospectuses, the Company
is not in violation of any statute, any rule, regulation, decision or
order of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the
environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), does not own or, to its
knowledge, operate any real property contaminated with any substance
that is subject to any environmental laws, is not liable for any
off-site disposal or contamination pursuant to any environmental laws,
and is not subject to any claim relating to any environmental laws,
which violation, contamination, liability or claim would individually
or in the aggregate have a Material Adverse Effect; and the Company is
not aware of any pending investigation which might lead to such a
claim.
(xv) Except as disclosed in the Prospectuses, there are no
pending actions, suits or proceedings against or affecting the Company
or any of its properties that, if determined adversely to the Company,
would individually or in the aggregate have a Material Adverse Effect,
or would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, or which are otherwise
material in the context of the sale of the Shares; and no such actions,
suits or proceedings are threatened or, to the Company's knowledge,
contemplated.
(xvi) Except as disclosed in the Prospectuses, since the
date of the latest audited financial statements included in the
Prospectuses there has been no material adverse change, nor any
development or event involving a prospective Material Adverse Effect.
(xvii) Except as set forth in the Registration Statements or
as contemplated or required by any document contained or incorporated
by reference therein, subsequent to the respective dates as of which
information is given in the
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Registration Statements and the Prospectuses, the Company has not
incurred any material liabilities or obligations, direct or contingent,
or entered into any material transactions, made any direct or indirect
redemption, purchase or other acquisition of its capital stock declared
or paid any dividends or made any distribution of any kind with respect
to its capital stock; and there has not been any change in the capital
stock (other than a change in the number of outstanding shares of
Common Stock due to the issuance of shares upon the exercise of
outstanding options or warrants or the conversion of outstanding
convertible securities), or any material change in the short-term or
long-term debt, or any issuance by the Company of options (other than
options granted pursuant to the Company's Amended and Restated 1987
Stock Option Plan and the Company's Amended 1995 Stock Option Plan
(collectively, the "Stock Option Plans")), warrants, convertible
securities or other rights to purchase the capital stock of the
Company, or any material adverse change, or any development involving a
prospective material adverse change, in the general affairs, condition
(financial or otherwise), business, key personnel, property, net worth
or results of operations of the Company. Except as set forth in the
Registration Statements or as contemplated or required by any document
contained or incorporated by reference therein, there are no
anti-dilution or price adjustment provisions contained in any security
issued by the Company (or in any agreement providing rights to security
holders). The issue and sale of the Shares will not obligate the
Company to issue shares of Common Stock or other securities to any
person and will not result in a right of any holder of Company
securities to adjust the exercise, conversion, exchange or reset price
under such securities.
(xviii) There are no contracts or documents of the Company
that are required to be filed as exhibits to the Registration
Statements by the Act or by the Rules and Regulations that have not
been so filed.
(xix) This Agreement has been duly authorized, executed and
delivered by the Company, and constitutes a valid, legal and binding
obligation of the Company, enforceable in accordance with its terms,
except as rights to indemnity hereunder may be limited by federal or
state securities laws and except as such enforceability may be limited
by bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of
equity. The execution, delivery and performance of this Agreement by
the Company and the consummation by the Company of the transactions
herein contemplated will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any
statute, agreement or instrument to which the Company is a party or by
which it is bound or to which any of its property is subject, the
Company's charter or by-laws, or any order, rule, regulation or decree
of any court or governmental agency or body having jurisdiction over
the Company or any of its properties; no consent, approval,
authorization or order of, or filing with, any court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement by the Company or for the consummation by the Company
of the transactions contemplated hereby, including the issuance or sale
of the Shares by the Company, except such as may be required under the
Act or state securities or blue sky laws; and the Company has full
power and authority to enter into this Agreement and to authorize,
issue and sell the Shares as contemplated by this Agreement.
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(xx) The Company owns or possesses or has licenses to use
all patents, patent applications, trademarks, service marks,
tradenames, trademark registrations, service xxxx registrations,
copyrights, licenses, inventions, trade secrets and other similar
rights (such patents referred to herein as the "Patents" and all of
such intellectual property referred to collectively as the
"Intellectual Property") necessary for the conduct of the business of
the Company as currently carried on and as described in the
Registration Statements and Prospectuses; except as stated in the
Registration Statements and Prospectuses, to the Company's knowledge,
no name which the Company uses and no other aspect of the business of
the Company as conducted on the date hereof involves or gives rise to
any infringement of, or license or similar fees for, any patents,
patent applications, trademarks, service marks, tradenames, trademark
registrations, service xxxx registrations, copyrights, licenses,
inventions, trade secrets or other similar rights of others material to
the business of the Company and the Company has not received any notice
alleging any such infringement or fee. The Company or the licensor has
duly and properly filed or caused to be filed with the U.S. Patent and
Trademark Office (the "PTO") and applicable foreign and international
patent authorities all patent applications described in the
Registration Statements and the Prospectuses (the "Patent
Applications"); in connection with the filing of the Patent
Applications, the Company or the licensor has conducted reasonable
investigations of the published literature and patent references
relating to the inventions claimed in such applications; to the best of
the Company's knowledge, it has complied with the PTO's duty of candor
and disclosure for the Patent Applications and has made no
misrepresentation in the Patent Applications; the Company is not aware
of any facts material to a determination of patentability regarding the
Patent Applications not called to the attention of the PTO which would
preclude the grant of a patent for the Patent Applications; and the
Company has no knowledge of any facts which would preclude it from
having an enforceable license or clear title to the Patent
Applications.
(xxi) The Company has filed all federal, state, local and
foreign income and franchise tax returns required to be filed and is
not in default in the payment of any taxes which were payable pursuant
to said returns or any assessments with respect thereto, other than any
which the Company is contesting in good faith or which could result in
a material adverse effect on the financial condition of the Company.
(xxii) The Company has not distributed and will not
distribute any prospectus or other offering material in connection with
the offering and sale of the Shares other than the Prospectuses or
other materials permitted by the Act to be distributed by the Company.
(xxiii) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (A)
transactions are executed in accordance with management's general or
specific authorization; (B) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with
management's general or specific authorization; and (D) the recorded
accountability for assets is compared with existing
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assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxiv) Except as disclosed in the Registration Statements
and the documents referred to and incorporated therein by reference,
there are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to
any securities of the Company or to require the Company to include such
securities with the Common Stock registered pursuant to the
Registration Statements.
(xxv) The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they
are engaged; the Company has not been refused any insurance coverage
sought or applied for; and, except for the potential effect of
conditions in the insurance industry and markets generally, 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 would not have a material adverse effect on
the Company, except as described in the Prospectuses.
(xxvi) The Company confirms that neither it nor any other
person or entity acting on its behalf has provided any of the
Purchasers or their agents or counsel with any information that
constitutes or might constitute material, nonpublic information. The
Company understands and confirms that each of the Purchasers will rely
on the foregoing representations in effecting transactions in
securities of the Company. All disclosure provided to the Purchasers
regarding the Company, its business and the transactions contemplated
hereby, the Registration Statements and each Supplement, furnished by
or on behalf of the Company are true and correct and do 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 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 its business, properties, prospects, operations or financial
conditions, which, under applicable law, rule or regulation, requires
public disclosure or announcement by the Company that has not been so
publicly announced or disclosed (assuming for this purpose that the
Company's reports filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") are being incorporated into the
Registration Statements) in the Registration Statements or the
Supplements. The Company acknowledges and agrees that no Purchaser
makes or has made any representations or warranties with respect to the
transactions contemplated hereby.
(xxvii) The Company acknowledges and agrees that each of the
Purchasers is acting solely in the capacity of an arm's length
purchaser with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that no Purchaser
is acting as a financial advisor or fiduciary of the Company or any
other Purchaser (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any advice given
by any Purchaser or any of their respective representatives or agents
in connection with this
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Agreement and the transactions contemplated hereby is merely incidental
to such Purchasers' purchase of the Shares. The Company further
represents to each Purchaser that the Company's decision to enter into
this Agreement has been based solely on the independent evaluation of
the Company and its representatives.
(b) Any certificate signed by any officer of the Company and delivered
to the Purchasers shall be deemed a representation and warranty by the Company
to the Purchasers as to the matters covered thereby.
3. Covenants. The Company covenants and agrees with each Purchaser as
follows:
(a) Prior to each Closing, the Company will file a prospectus
supplement with the Commission pursuant to and in accordance with Rule 424(b)(2)
(or, if applicable and if consented to by the Purchaser, subparagraph (5)
thereto) with regard to the Shares being issued at such Closing.
(b) The Company will not take, directly or indirectly, any action
designed to or that would constitute or that might reasonably be expected to
cause or result in, under the Exchange Act or otherwise, stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Common Stock.
(c) On or prior to each Closing, all necessary filings shall be made as
required and all filing fees shall have been paid to effect the listing of the
Shares on AMEX.
(d) The Company shall not and shall cause each of its Affiliates (as
defined in Rule 405 under the Securities Act) and other persons acting on behalf
of the Company not to divulge to any Purchaser any information that it believes
to be material non public information unless such Purchaser has agreed in
writing to receive such information prior to such divulgence.
4. Conditions of Purchasers' Obligations. The obligations of each
Purchaser hereunder are subject to the accuracy, as of the date hereof and at
the Closing Date (as if made at the Closing Date), of and compliance with all
representations, warranties and agreements of the Company contained herein, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) The prospectus supplement shall have been filed with the Commission
in accordance with the Rules and Regulations and Section 3(a) of this Agreement.
No stop order suspending the effectiveness of the Registration Statements or of
any part thereof shall have been issued and no proceedings for that purpose
shall have been instituted or, to the knowledge of the Company or the
Purchasers, shall be contemplated by the Commission.
(b) No Purchaser shall have advised the Company that the Registration
Statements or the Prospectuses, or any amendment thereof or supplement thereto,
contains an untrue statement of fact which, in such Purchaser's opinion, is
material, or omits to state a fact which, in such Purchaser's opinion, is
material and is required to be stated therein or necessary to make the
statements therein not misleading.
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(c) Except as set forth in the Registration Statements or as
contemplated or required by any document contained or incorporated by reference
therein, subsequent to the respective dates as of which information is given in
the Registration Statements and the Prospectuses the Company shall not have
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transactions, or declared or paid any dividends or
made any distribution of any kind with respect to its capital stock; and there
shall not have been any change in the capital stock (other than a change in the
number of outstanding shares of Common Stock due to the issuance of shares upon
the exercise of outstanding options or warrants or the conversion of outstanding
convertible securities), or any material change in the short-term or long-term
debt of the Company, or any issuance of options (other than options granted
pursuant to the Stock Option Plans), warrants, convertible securities or other
rights to purchase the capital stock of the Company or any material adverse
change or any development involving a prospective material adverse change
(whether or not arising in the ordinary course of business), in the general
affairs, condition (financial or otherwise), business, key personnel, property,
net worth or results of operations of the Company that, in a Purchaser's
judgment, makes it impractical or inadvisable to purchase the Shares on the
terms and in the manner contemplated in the Prospectuses;
(d) Each Purchaser shall have received an opinion substantially in the
form attached as Exhibit C hereto, dated the Closing Date, of Smith, Stratton,
Wise, Xxxxx & Xxxxxxx, LLP, counsel for the Company.
(e) On each Closing Date, there shall have been furnished to each
Purchaser a certificate, dated such Closing Date and addressed to such
Purchaser, signed by the chief executive officer and by the principal accounting
officer of the Company, to the effect that:
(i) The representations and warranties of the Company in
this Agreement are true and correct, in all material respects, as if
made at and as of such Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to such Closing Date;
(ii) No stop order or other order suspending the
effectiveness of the Registration Statements or any amendment thereof
or the qualification of the Shares for offering or sale has been
issued, and no proceeding for that purpose has been instituted or, to
the best of their knowledge, is contemplated by the Commission or any
state or regulatory body; and
(iii) The signers of said certificate have carefully
examined the Registration Statements and the Prospectuses, and any
amendments thereof or supplements thereto, and (A) such documents
contain all statements and information required to be included therein,
the Registration Statements, or any amendment thereof, does not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectuses, as amended or
supplemented, does not include any untrue statement of material fact or
omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading, (B) since the effective date of the Registration
Statements, there has occurred no event required to be set forth in an
amended or supplemented prospectus which has not been so
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set forth, (C) subsequent to the respective dates as of which
information is given in the Registration Statements and the
Prospectuses, except as set forth in the Registration Statements or as
contemplated or required by any document contained or incorporated by
reference therein, the Company has not incurred any material
liabilities or obligations, direct or contingent, or entered into any
material transactions, not in the ordinary course of business, or
declared or paid any dividends or made any distribution of any kind
with respect to its capital stock, and except as disclosed in the
Prospectuses, there has not been any change in the capital stock (other
than a change in the number of outstanding shares of Common Stock due
to the issuance of shares upon the exercise of outstanding options or
warrants or the conversion of outstanding convertible securities), or
any material change in the short-term or long-term debt, or any
issuance of options (other than options granted pursuant to the Stock
Option Plans), warrants, convertible securities or other rights to
purchase the capital stock, of the Company, or any of its subsidiaries,
or any material adverse change or any development involving a
prospective material adverse change (whether or not arising in the
ordinary course of business) in the general affairs, condition
(financial or otherwise), business, key personnel, property, net worth
or results of operations of the Company and its subsidiaries, taken as
a whole, and (D) except as stated in the Registration Statements and
the Prospectuses, there is not pending, or, to the knowledge of the
Company, threatened or contemplated, any action, suit or proceeding to
which the Company or any of its subsidiaries is a party before or by
any court or governmental agency, authority or body, or any arbitrator,
which might result in any Material Adverse Effect.
(f) The Company shall have furnished to the Purchasers such additional
documents, certificates and evidence as they may have reasonably requested.
(g) All necessary filings shall have been made as required and all
filing fees shall have been paid to effect the listing of the Shares on AMEX.
5. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser may become subject, under the Act or otherwise (including in
settlement of any litigation if such settlement is effected with the written
consent of the Company) insofar as such losses, claims, damages, liabilities,
charges, actions, proceedings, demands, judgments, settlements, costs and
expenses of any nature whatsoever (or actions in respect thereof) arise out of
or are based upon an untrue statement or alleged untrue statement of a material
fact contained in the Registration Statements, or arise out of or are based upon
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
arise out of or result from any breach of a representation, warranty or covenant
of the Company or any violation in connection with the transactions contemplated
hereby by the Company of the Securities Act or any rule or regulation
promulgated thereunder applicable to the Company or of any Blue Sky or other
state securities laws or any rule or regulation promulgated thereunder
applicable to the Company, and will reimburse such Purchaser for any legal or
other expenses reasonably incurred by it in connection with investigating or
defending against such loss, claim, damage, liability or action.
-11-
(b) Promptly after receipt by an indemnified party under subsection (a)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
the indemnifying party from any liability that it may have to any indemnified
party. In case any such action shall be brought against any indemnified party,
and it shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in, and, to the extent that
it shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of the
indemnifying party's election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection for
any legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof other than reasonable costs of
investigation; provided, however, that if, in the judgment of a
majority-in-interest of the Purchasers seeking indemnification, it is advisable
for the Purchasers to be represented by separate counsel, the Purchasers shall
have the right to employ a single counsel in which event the reasonable fees and
expenses of such separate counsel shall be borne by the indemnifying party or
parties and reimbursed to the Purchasers as incurred (in accordance with the
provisions of the second paragraph in subsection (a) above). An indemnifying
party shall not be obligated under any settlement agreement relating to any
action under this Section 5 to which it has not agreed in writing, such
agreement not to be unreasonably withheld.
(c) If the indemnification provided for in this Section 5 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) above, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) above, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Purchaser on the other from the offering of the
Shares or (ii) if the allocation provided by clause (i) above is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Purchaser on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Purchaser and the parties' relevant intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company and the Purchasers agree that it would not be just and
equitable if contributions pursuant to this subsection (c) were to be determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the first sentence of
this subsection (c). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (c) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
against any action or claim which is the subject of this subsection (c).
-12-
(d) The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls a
Purchaser within the meaning of the Act.
6. Notices. Except as otherwise provided herein, all communications
hereunder shall be in writing and shall be deemed to have been given on the date
delivered by hand, sent by facsimile transmission, or mailed certified mail,
return receipt requested, if to the Purchasers to the addresses set forth on
Exhibit A hereto, with a copy to Xxxx X. Xxxxxxx, Proskauer Rose LLP, 0000
Xxxxxxxx, Xxx Xxxx, XX 00000-0000, and if to the Company to 000 Xxxxxxxx Xxxxx,
Xxxxxx, XX 00000, Facsimile (000) 000-0000, Attention: Xxxxxxx X. Xxxx, with a
copy to Xxxxxxx X. Xxxxx, Smith, Stratton, Wise, Xxxxx & Xxxxxxx, LLP, 000
Xxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 which copies shall not constitute
notice. Any party to this Agreement may change such address for notices by
sending to the parties to this Agreement written notice of a new address for
such purpose.
7. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their respective
successors and assigns and the controlling persons, officers and directors
referred to in Section 5. Nothing in this Agreement is intended or shall be
construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
9. Fees and Expenses. Each party shall pay the fees and expenses of its
advisors, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement, except that the Company shall bear
the fees and expenses of counsel to Mainfield Enterprises Inc. up to an
aggregate of $2,500, which may be withheld by Mainfield Enterprises Inc. from
amounts otherwise payable in respect of the purchase of Shares.
11. Entire Agreement; Amendment. This Agreement contains the entire
understanding and agreement of the parties with respect to the matters covered
hereby and, except as specifically set forth herein, neither the Company nor any
of the Purchasers makes any representations, warranty, covenant or undertaking
with respect to such matters, and this Agreement supersedes all prior
understandings and agreements with respect to said subject matter, all of which
are merged herein. No provision of this Agreement may be waived or amended other
than by a written instrument signed by the Company and all of the Purchasers.
12. Headings. The article, section and subsection headings in this
Agreement are for convenience only and shall not constitute a part of this
Agreement for any other purpose and shall not be deemed to limit or affect any
of the provisions hereof.
13. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been signed by each
party and delivered to the other parties hereto, it being
-13-
understood that all parties need not sign the same counterpart. A signature on a
counterpart of this Agreement delivered by facsimile transmission shall be
deemed to be the original signature.
14. Representations and Agreements to Survive Delivery. All
representations, warranties, covenants and agreements of the Company herein or
in certificates delivered pursuant hereto shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Purchasers or any controlling person thereof, and shall survive delivery of, and
payment for, the Shares to and by the Purchasers hereunder for a period of one
(1) year, provided, however, that such one (1) year period shall not be
applicable to the Company's obligations set forth in Section 5 hereof.
15. Publicity. Neither the Company nor the Purchasers shall issue any press
release or make any other public announcement relating to this Agreement unless
(i) the content thereof is mutually agreed to by the Company and the Purchasers,
or (ii) such party is advised by its counsel that such press release or public
announcement is required by law; except that no press release issued to disclose
the issuance and sale of the Shares to the Purchasers will refer to the
Purchasers by name. The Company shall (i) prior to 9:30 a.m. on the first
Business Day following the date on which this Agreement is fully executed, issue
a press release mutually agreed to by the Company and the Purchasers, disclosing
the transactions contemplated hereby and (ii) make such other filings and
notices in the manner and time required by the Commission.
16. Independent Nature of Purchasers. The obligations of each Purchaser
under this Agreement are several and not joint with the obligations of any other
Purchaser, and no Purchaser shall be responsible in any way for the performance
of the obligations of any other Purchaser under this Agreement. The decision of
each Purchaser to purchase Shares pursuant to this Agreement has been made by
such Purchaser independently of any other Purchaser and independently of any
information, materials, statements or opinions as to the business, affairs,
operations, assets, properties, liabilities, results of operations, condition
(financial or otherwise) or prospects of the Company which may have been made or
given by any other Purchaser or by any agent or employee of any other Purchaser,
and no Purchaser or any of its agents or employees shall have any liability to
any other Purchaser (or any other person) relating to or arising from any such
information, materials, statements or opinions. Nothing contained herein, and no
action taken by any Purchaser pursuant hereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement. Each Purchaser shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Purchaser to be joined as an additional party in any proceeding for such
purpose.
[Signature Pages Follow]
-14-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date first above
written.
Alteon Inc.
By:/s/ Xxxxxxx X. Xxxx
-------------------------
Name: Xxxxxxx X. Xxxx
Title: President & CEO
-15-
WHI GROWTH FUND, LP
By: Xxxxxxx Xxxxxx Investors, Inc., General Partner
By:/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
WHI SELECT FUND, LP
By: Xxxxxxx Xxxxxx Investors, Inc., General Partner
By/s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
PANACEA FUND, LLC
By: Xxxxxxx Xxxxxx Investors, Inc., General Partner
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Executive Vice President
-16-
XMARK FUND, LTD
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Principal, Chief Operating Officer
XMARK FUND, L.P.
By: /s/ Xxxxx Xxxxxxxx
------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Principal, Chief Operating Officer
-17-
VERTICAL VENTURES, LLC
By: /s/ Xxxxxx Xxxxxxxxx
------------------------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Partner
-18-
BLUEGRASS GROWTH FUND, LP
By: /s/ Xxxxx Xxxxx
---------------------------------
Name: Xxxxx Xxxxx
Title: Managing Member
-19-
XXXXXX XXXXX III, TRUSTEE
XXXXXX XXXXX III 5% CHARITABLE
REMAINDER TRUST
By: /s/ Xxxxxx Xxxxx III
---------------------------------
Name: Xxxxxx Xxxxx III
Title: Trustee
-20-
MAINFIELD ENTERPRISES, INC.
By: /s/ Avi Vigder
---------------------------------
Name: Avi Vigder
Title: Authorized Signatory
-21-
NORTH SOUND LEGACY FUND
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer
-22-
NORTH SOUND LEGACY INSTITUTIONAL
FUND LLC
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer
-23-
NORTH SOUND LEGACY INTERNATIONAL
LTD.
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
Title: Chief Financial Officer
-24-
EXHIBIT A
THE PURCHASERS
Number of Initial Aggregate
Name and Address Shares to be Purchased Purchase Price
---------------- ---------------------- --------------
WHI Growth Fund, LP 1,200,000 $2,100,000.00
Xxx Xxxxx XxXxxxx Xxxxxx - Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, MD
WHI Select Fund, LP 571,400 $ 999,950.00
Xxx Xxxxx XxXxxxx Xxxxxx - Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, MD
Panacea Fund, LLC 228,600 $ 400,050.00
Xxx Xxxxx XxXxxxx Xxxxxx - Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, MD
Xmark Fund, Ltd. 365,257 $ 639,199.75
Carnegie Hall Tower
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
Xmark Fund, L.P. 206,172 $ 360,801.00
Carnegie Hall Tower
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
Vertical Ventures, LLC 714,286 $1,250,000.50
000 Xxxxxxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxx III, Trustee 28,572 $ 50,001.00
Xxxxxx Xxxxx III 5% Charitable Remainder
Unitrust Under Agreement Dated 11/1/88
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Skip Xxxxx
Mainfield Enterprises, Inc. 571,429 $1,000,000.75
c/o Sage Capital Growth, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Eldad Gal
Bluegrass Growth Fund LP 285,715 $ 500,001.25
000 X. 00xx Xxxxxx
Xxx. 00X
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxx
North Sound Legacy Fund 12,858 $ 22,501.50
00 Xxxxxx Xxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
North Sound Legacy Institutional Fund LLC 112,857 $ 197,499.75
00 Xxxxxx Xxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
North Sound Legacy International Ltd. 160,000 $ 280,000.00
00 Xxxxxx Xxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
EXHIBIT B
THE PURCHASERS
Number of Additional
Name and Address Shares to be Purchased Purchase Price
---------------- ---------------------- --------------
WHI Growth Fund, LP 419,854 $776,729.90
Xxx Xxxxx XxXxxxx Xxxxxx - Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, MD
WHI Select Fund, LP 199,920 $369,852.00
Xxx Xxxxx XxXxxxx Xxxxxx - Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, MD
Panacea Fund, LLC 79,982 $147,966.70
Xxx Xxxxx XxXxxxx Xxxxxx - Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx, MD
Xmark Fund, Ltd 127,795 $236,420.75
Carnegie Hall Tower
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
Xmark Fund, L.P. 72,135 $133,449.75
Carnegie Hall Tower
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
Vertical Ventures, LLC 249,913 $462,339.05
000 Xxxxxxxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxx III, Trustee 9,997 $ 18,494.45
Xxxxxx Xxxxx III 5% Charitable Remainder
Unitrust Under Agreement Dated 11/1/88
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attn: Skip Xxxxx
Mainfield Enterprises, Inc. 199,930 $369,870.50
c/o Sage Capital Growth, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Eldad Gal
Bluegrass Growth Fund LP 99,965 $184,935.25
000 X. 00xx Xxxxxx
Xxx. 00X
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxx
North Sound Legacy Fund 4,499 $ 8,323.15
00 Xxxxxx Xxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
North Sound Legacy Institutional Fund LLC 39,486 $ 73,049.10
00 Xxxxxx Xxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
North Sound Legacy International Ltd. 55,980 $ 103,563
00 Xxxxxx Xxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
EXHIBIT C
FORM OF OPINION OF COUNSEL
October __, 2003
TO THE PURCHASERS NAMED ON SCHEDULE A HERETO
Ladies and Gentlemen:
We have acted as counsel to Alteon Inc., a Delaware corporation (the
"Company"), in connection with the sale by the Company of ________ shares of the
Company's common stock, $0.01 par value (the "Shares"), pursuant to the Stock
Purchase Agreement dated October 14, 2003 (the "Agreement") between the Company
and you. This opinion is being delivered to you pursuant to Section 4(d) of the
Agreement. Capitalized terms used but not otherwise defined herein have the
meanings ascribed to them in the Agreement.
In rendering this opinion, we have examined originals, or copies
certified or otherwise identified to our satisfaction as being true copies, of
such corporate records of the Company, certificates of public officials and of
officers of the Company and others, and the Registration Statements and the
Prospectuses and other documents, including those relating to the issuance and
sale of the Shares by the Company to you and the authorization, execution and
delivery of the Agreement, as we have deemed necessary for the purpose of this
opinion.
In rendering this opinion, we have assumed the genuineness and
authenticity of all signatures on all documents submitted to us for examination;
the completeness, genuineness and authenticity of all documents submitted to us
as originals; the conformity to originals of all documents submitted to us as
certified or photostatic copies; the accuracy, completeness and authenticity of
certificates of public officials; and the accuracy and completeness of all
public records examined by us. As to factual matters relevant to our opinions,
we have relied on the representations and warranties contained in the Agreement
and on a certificate of an officer of the Company.
On the basis of such examinations and our consideration of such
questions of law as we have deemed relevant in the circumstances and subject to
the foregoing, we are of the opinion that:
1. The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with power
and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectuses; and the Company is duly qualified to
do business as a foreign corporation in good standing in all other jurisdictions
in which its ownership or lease of property or the conduct of its business
requires such qualification and in which the failure to so qualify would have a
material adverse effect on the condition (financial or other), business,
properties, business prospects, or results of operations of the Company (a
"Material Adverse Effect").
2. The Shares and all of the outstanding shares of capital stock
of the Company have been duly authorized; all outstanding shares of capital
stock of the Company are, and, when the Shares have been delivered and paid for
in accordance with the Agreement on the Closing Date, such Shares will be,
validly issued, fully paid and non-assessable and will be free of any liens,
encumbrances, preemptive or similar rights (other than those created by
Purchaser) and will conform to the description thereof contained in the
Prospectuses. Except as set forth in the Registration Statements or as
contemplated or required by any document contained or incorporated by reference
therein, there are no preemptive rights or other rights to subscribe for or to
purchase, or any restriction upon the voting or transfer of, any shares of
Common Stock pursuant to the Company's charter, by-laws or, to our knowledge,
any agreement or other instrument to which the Company is a party or by which
the Company is bound.
3. No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by the Agreement in connection
with the issuance and sale of the Shares by the Company, except such as may be
required under the Act and under state securities laws.
4. The execution, delivery and performance of the Agreement by
the Company and the consummation by the Company of the transactions therein
contemplated will not result in a breach or violation of any of the terms and
provisions of, or constitute a default under, any statute, the Company's charter
or by-laws, or, to our knowledge, any agreement or instrument to which the
Company is a party or by which it is bound or to which any of its property is
subject, or, to our knowledge, any order, rule, regulation or decree of any
court or governmental agency or body having jurisdiction over the Company or any
of its properties
5. The Registration Statements has been declared effective by the
Commission under the Act, the Prospectuses was filed with the Commission
pursuant to Rule 424(b) on June 12, 2003 and, to our knowledge, no stop order
suspending the effectiveness of the Registration Statements or any part thereof
has been issued and no proceedings for that purpose have been instituted or are
pending or contemplated under the Act. The Registration Statements, as of its
effective date, and the Registration Statements and the Prospectuses, as of the
dates of the Agreement and as of the Closing Date, and any amendment or
supplement thereto as of its date and the Closing Date (except for the financial
statements, the notes thereto and the related schedules and other statistical or
financial data included or incorporated by reference therein as to which we
express no opinion), complied as to form in all material respects with the
requirements of the Act and the Rules and Regulations.
6. The Agreement has been duly authorized, executed and delivered
by the Company and is enforceable against the Company in accordance with its
terms.
7. The Shares being issued under the Agreement are registered
under the 2001 Registration Statement or 2003 Registration Statement and may be
resold by the Purchasers without restriction under the Securities Act.
We have participated in conferences with certain officers and
representatives of the Company at which the contents of the Registration
Statements and the Prospectuses and related
matters were discussed and, although we do not pass upon, nor assume any
responsibility for, the accuracy, completeness or fairness of any statement
contained in the Registration Statements, Prospectuses or Supplements and we
have made no independent check or verification thereof, based upon the
foregoing, no facts have come to our attention which would lead us to believe
that either the Registration Statements as of its effective date, the
Registration Statements and Prospectuses as of the dates of the Agreement and as
of the Closing Date or any amendment or supplement thereto, as of its date and
as of the Closing Date, contained an untrue statement of a material fact or
omitted to state a 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 (it being understood that we express no belief or opinion
which respect to the financial statements, including the notes and schedules
thereto and other financial and statistical data).
Where the phrase "to our knowledge" is used in this letter, such phrase
refers to the current awareness of the attorneys in this firm who are actively
involved in the representation of the Company as to matters with respect to
which we have been consulted and does not imply knowledge as to any other
matters.
The opinions expressed herein are subject to the effects and
limitations imposed by further legislation, administrative regulation and
judicial decisions, which effects may be prospective or retroactive. Our opinion
in paragraph (4) is limited to laws which normally apply to transactions of the
type contemplated by the Agreement. Our opinion in paragraph (1) as to the good
standing of the Company is based solely on certificates of good standing dated
October ____, 2003 and October ___, 2003 issued by the Secretary of State of
Delaware and the Treasurer of the State of New Jersey, respectively.
With respect to the opinions expressed herein, we further advise you
that we express no opinion as to any law or regulation except for laws or
regulations of the State of New Jersey, the State of New York and the United
States and the Delaware General Corporation Law.
This opinion is issued as of the date hereof and is provided by us as
counsel for the Company to you at your request and for your exclusive use only
and is not to be made available to or relied upon by any other persons or
entities, except for counsel to you, which may rely on this opinion in rendering
its opinion to you, without our prior written consent. We undertake no
obligation to update you with respect to any changes herein.
Very truly yours,
