3,278,689 Shares SANGAMO BIOSCIENCES, INC. Common Stock PLACEMENT AGENCY AGREEMENT
Exhibit 1.1
3,278,689 Shares
SANGAMO BIOSCIENCES, INC.
Common Stock
July 16, 2007
JMP SECURITIES LLC
XXXXX XXXXXXX & CO.
XXXXX XXXXXXX & CO.
As Representatives of the several Placement Agents
set forth on Schedule I hereto
set forth on Schedule I hereto
c/o JMP Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
Sangamo BioSciences, Inc. a Delaware corporation (the “Company”), proposes, subject to the
terms and conditions stated in this Placement Agency Agreement (this “Agreement”) and the
Subscription Agreements in the form of Exhibit A attached hereto (the “Subscription
Agreements”) entered into with the investors identified therein (each, an “Investor” and
collectively, the “Investors”), to issue and
sell up to an aggregate of 3,278,689 shares (the
“Shares”) of the Company’s common stock, par value $0.01 per share (the “Common Stock”). The
Shares are more fully described in the Registration Statement (as defined herein). This is to
confirm the agreement between the Company and the several Placement Agents set forth on
Schedule I hereto (the “Placement Agents”) for whom JMP Securities LLC and Xxxxx Xxxxxxx &
Co. are acting as representatives (in such capacity, the “Representatives”) concerning the
offering, issuance and sale of the Shares.
1. Agreement to Act as Placement Agents; Delivery and Payment. On the basis of the
representations, warranties and agreements of the Company herein contained, and subject to the
terms and conditions set forth in this Agreement:
(a) The Company hereby authorizes the Placement Agents to act as its exclusive agents in
connection with the issuance and sale, by the Company, of Shares (the “Offering”) to the Investors
and the Placement Agents hereby agree, as agents of the Company, to use their best efforts to
solicit offers to purchase all or part of the Shares from the Company upon the terms and conditions
set forth in the Prospectus (as defined below). The Placement Agents shall make commercially
reasonable efforts to assist the Company in obtaining performance by each Investor whose offer to
purchase Shares has been solicited by the Placement Agents and accepted by the Company, but the
Placement Agents shall not, except as otherwise provided in this Agreement, have any liability to
the Company in the event any such purchase is not consummated for any reason. Under no
circumstances will the Placement Agents or any of their affiliates be obligated to underwrite or
purchase any of the Shares for their own accounts or
otherwise provide any financing. The Placement Agents shall act solely as the Company’s
agents and not as principals. The Placement Agents shall have no authority to bind the Company with
respect to any prospective offer to purchase Shares and the Company shall have the sole right to
accept offers to purchase Shares and may reject any such offer, in whole or in part.
(b) As compensation for services rendered, on the Closing Date, the Company shall pay or cause
to be paid to the Placement Agents by wire transfer of immediately available funds to an account or
accounts designated by the Representatives, an aggregate amount equal to six percent (6.0%) of the
gross proceeds received by the Company from its sale of the Shares on such Closing Date (the
“Agency Fee”). The Placement Agents agree that the foregoing compensation, together with any
expense reimbursement payable hereunder, constitutes all of the cash compensation that the
Placement Agents shall be entitled to receive in connection with the Offering contemplated hereby.
(c) The purchases of Shares by the Investors shall be evidenced by the execution of the
Subscription Agreements by each of the parties thereto in the form attached hereto as Exhibit
A.
(d) Prior to the earlier of (i) the date on which this Agreement is terminated and (ii) the
Closing Date, the Company shall not, without the prior written consent of the Representatives,
solicit or accept offers to purchase Shares of the Company (other than pursuant to the exercise of
options or warrants to purchase shares of Common Stock that are outstanding at the date hereof)
otherwise than through the Placement Agents in accordance herewith.
(e) No Shares which the Company has agreed to sell pursuant to this Agreement shall be deemed
to have been purchased and paid for, or sold by the Company, until such Shares shall have been
delivered to the Investor purchasing such Shares against payment by such Investor. If the Company
shall default in its obligations to deliver Shares to an Investor whose offer it has accepted, the
Company shall indemnify and hold the Placement Agents (as defined below) harmless against any loss,
claim, damage or liability directly or indirectly arising from or as a result of such default by
the Company.
(f) Payment of the purchase price for, and delivery of, the Shares shall be made at a closing
(the “Closing”) at the offices of Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the Company, located at
One Market Street, San Francisco, California, at 10:00 a.m., local time, on July 20, 2007 or at
such other time and date as the Representatives and the Company determine pursuant to Rule
15c6-1(a) under the Exchange Act (such date of payment and delivery being herein referred to as the
“Closing Date”). The Company, the Representatives and JPMorganChase Bank, as escrow agent (the
“Escrow Agent”), shall have entered into an escrow agreement, dated as of July 16, 2007 (the
“Escrow Agreement”) pursuant to which an escrow account will be established, at the Company’s
expense, for the benefit of the Company and the Investors (the “Escrow Account”). Subject to the
terms hereof and of the Escrow Agreement, payment of the purchase price for the Shares shall be
made to the Company in the manner set forth below by Federal Funds wire transfer, against delivery
of the Shares to such persons and shall be registered in the name or names and shall be in such
denominations as the Representatives may request at least one business day before the Closing
Date. Payment of the purchase price for the Shares to be purchased by Investors shall be made by
such Investors directly to the Escrow Agent by depositing such amount into the Escrow Account and
the Escrow Agent agrees to hold such purchase price in escrow in accordance herewith. Subject to
the terms and conditions hereof and of the Subscription Agreements and the Escrow Agreement, the
Escrow Agent shall, on the Closing Date, deliver to the Company, by Federal Funds wire transfer,
the aggregate purchase price so held in escrow, reduced by an amount equal to the sum of the
aggregate Agency Fee payable to the Placement Agents and the amount, if any, of expenses for which
the Placement Agents are entitled to reimbursement pursuant hereto. Each of the Company and the
Representatives hereby agree to deliver to the Escrow Agent a Closing Notice in the form attached
as Exhibit C to the Escrow Agreement at least one day prior to the Closing Date. At least
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one day prior to the Closing Date, the Placement Agents shall submit to the Company their bona
fide estimate of the amount, if any, of expenses for which such Placement Agents are entitled to
reimbursement pursuant hereto. As soon as reasonably practicable after the Closing Date, the
Placement Agents shall submit to the Company their expense reimbursement invoice and the Company or
the Placement Agents, as applicable, shall make any necessary reconciling payment(s) within thirty
days of receipt of such invoices.
(g) With respect to any Investor that is a registered investment company and is not settling
its purchase of Shares pursuant to Section 1(f) above, on the Closing Date, the Company
shall cause the Transfer Agent to electronically deliver the Shares purchased by such Investor to
the account designated by such Investor and, upon receipt by such Investor of such Shares, such
Investor shall wire, in immediately available funds, the Purchase Amount for such Shares to an
account designated by the Company.
2. Representations and Warranties of the Company. The Company represents and warrants to the
Placement Agents as of the date hereof, and as of the Closing Date and agrees with the Placement
Agents, as follows:
(a) Filing and Effectiveness of Registration Statement. The Company has filed, in conformity
with the requirements of the Securities Act of 1933, as amended (the “Securities Act”), and the
published rules and regulations thereunder (the “Rules and Regulations”) adopted by the Securities
and Exchange Commission (the “Commission”), a registration statement on Form S-3 (No. 333-142425),
relating to the Shares and the offering thereof from time to time in accordance with Rule
415(a)(1)(x) of the Rules and Regulations, and such amendments thereof as may have been required to
date.
(b) Registration Statement and Prospectus; Certain Defined Term. The Company meets the
requirements for use of Form S-3 under the Securities Act and has complied with the requirements of
Rule 415 with respect to the Registration Statement (as hereafter defined). The Registration
Statement has heretofore become effective under the Securities Act or, with respect to any
registration statement to be filed to register the offer and sale of Shares pursuant to Rule 462(b)
under the Securities Act, will be filed with the Commission and become effective under the
Securities Act no later than 10:00 p.m. New York City time on the date of determination of the
public offering price for the Shares. No stop order preventing or suspending the effectiveness of
the Registration Statement has been issued by the Commission, and no proceedings for such purpose
pursuant to Section 8A of the Securities Act against the Company or related to the Offering have
been instituted or are pending or, to the Company’s knowledge, are contemplated or threatened by
the Commission, and any request received by the Company on the part of the Commission for
additional information has been complied with. As used in this paragraph and elsewhere in this
Agreement:
(1) “Registration Statement” means the registration statement, as amended at
the time of such registration statement’s effectiveness for purposes of Section 11
of the Securities Act, as such section applies to the Placement Agents (the
“Effective Time”), including (i) all documents filed as a part thereof or
incorporated or deemed to be incorporated by reference therein, (ii) any information
in the corresponding Basic Prospectus or a prospectus supplement filed with the
Commission pursuant to Rule 424(b) under the Securities Act, to the extent such
information is deemed pursuant to Rule 430B (“Rule 430B”) or 430C (“Rule 430C”)
under the Securities Act. to be a part thereof at the Effective Time If the Company
has filed an abbreviated registration statement to register additional Shares
pursuant to Rule 462(b) under the Rules and Regulations (the “Rule 462(b)
Registration Statement”), then any reference herein to the term “Registration
Statement” shall also be deemed to include such Rule 462(b) Registration Statement.
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(2) “Basic Prospectus” means the basic prospectus included in the Registration
Statement at the Effective Time.
(3) “Preliminary Prospectus Supplement” means any initial prospectus
supplement, subject to completion, relating to the Shares, filed by the Company with
the Commission pursuant to Rule 424(b) under the Securities Act for use in
connection with the offering and sale of the Shares.
(4) “Preliminary Prospectus” means any Preliminary Prospectus Supplement
together with the Basic Prospectus attached to or used with such Preliminary
Prospectus Supplement.
(5) “Final Prospectus Supplement” means the final prospectus supplement,
relating to the Shares, filed by the Company with the Commission pursuant to Rule
424(b) under the Securities Act on or before the second business day after the date
hereof (or such earlier time as may be required under the Securities Act), in the
form furnished by the Company to the Placement Agents, for use in connection with
the offering and sale of the Shares that discloses the public offering price and
other final terms of the Shares.
(6) “Prospectus” means the Final Prospectus Supplement together with the Basic
Prospectus attached to or used with the Final Prospectus Supplement.
(7) “Time of Sale” with respect to any Investor, means the time of receipt and
acceptance of an executed Subscription Agreement (as defined below) from such
Investor.
(8) “General Disclosure Package” means the Basic Prospectus, each “free-writing
prospectus” (as defined pursuant to Rule 405 under the Securities Act) listed on
Schedule I hereto and the pricing and other information as set forth on Exhibit
D hereto (the “Pricing Information”), all considered together.
(c) Compliance with Securities Act Requirements. The Registration Statement complied when it
became effective, complies as of the date hereof and, as amended or supplemented, at the Time of
Sale and at all times during which a prospectus is required by the Securities Act to be delivered
(whether physically or through compliance with Rule 172 under the Securities Act or any similar
rule) in connection with any sale of Shares (the “Prospectus Delivery Period”), will comply, in all
material respects, with the requirements of the Securities Act and the Rules and Regulations; the
Registration Statement did not, as of the Effective Time, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading, provided, that the Company makes no representations or warranty
in this paragraph with respect to statements in or omissions from the Registration Statement in
reliance upon, and in conformity with, written information furnished to the Company by or on behalf
of the Placement Agents specifically for inclusion therein, which information the parties hereto
agree is limited to the Placement Agents’ Information (as defined in Section 8).
(d) Contents of Prospectus. Each of the Preliminary Prospectus, if any, and the Prospectus
will comply, as of the date that it is filed with the Commission, the date of its delivery to
Investors, the Time of Sale and at all times during the Prospectus Delivery Period, in all material
respects, with the requirements of the Securities Act (in the case of the Prospectus, including,
without limitation, Section 10(a) of the Securities Act); at no time during the period that begins
on the earlier of the date of the Preliminary Prospectus, if any, and the date the Prospectus is
filed with the Commission and ends at
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the later of the Time of Sale and the end of the Prospectus Delivery Period did or will any
Preliminary Prospectus or the Prospectus, as then amended or supplemented, include an untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
provided that the Company makes no representation or warranty with respect to the Placement Agents’
Information.
(e) Incorporated Documents. Each of the documents incorporated or deemed to be incorporated
by reference in the Registration Statement, at the time such document was filed with the Commission
or at the time such document became effective, as applicable, complied, in all material respects,
with the requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and
did not include an untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were
made, not misleading.
(f) General Disclosure Package. The General Disclosure Package, as of the Time of Sale, did
not, and as of the Closing Date 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 the light of the circumstances under which they were made, not misleading; provided,
that the Company makes no representations or warranty in this paragraph with respect to statements
in or omissions from the General Disclosure Package in reliance upon, and in conformity with,
written information furnished to the Company by the Placement Agents specifically for inclusion
therein, which information the parties hereto agree is limited to the Placement Agents’
Information. No statement of material fact included in the Prospectus has been omitted from the
General Disclosure Package and no statement of material fact included in the General Disclosure
Package that is required to be included in the Prospectus has been omitted therefrom.
(g) Distributed Materials; Conflict with Registration Statement. Other than the Basic
Prospectus, any Preliminary Prospectus and the Prospectus, the Company has not made, used,
prepared, authorized, approved or referred to and will not make, use, prepare, authorize, approve
or refer to any “written communication” (as defined in Rule 405 under the Securities Act) that
constitutes an offer to sell or a solicitation of an offer to buy the Shares (each such
communication by the Company or its agents and representatives (other than a communication referred
to in clause (i) below) an “Issuer Free Writing Prospectus”) other than (i) any document not
constituting a prospectus pursuant to Section 2(a)(10)(a) of the Securities Act or Rule 134 under
the Securities Act or (ii) the documents listed on Schedule I hereto and other written
communications approved in advance by the Placement Agent. Each such Issuer Free Writing
Prospectus, if any, conformed or will conform in all material respects to the requirements of the
Securities Act and the Rules and Regulations on the date of first use, and the Company has complied
or will comply with any filing requirements applicable to such Issuer Free Writing Prospectus
pursuant to the Rules and Regulations. Each Issuer Free Writing Prospectus, if any, as of its
issue date and at all subsequent times through the completion of the offering and sale of the
Shares did not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus, including
any document incorporated by reference therein and any prospectus supplement deemed to be a part
thereof that has not been superseded or modified.
(h) Not an Ineligible Issuer. (1) At the earliest time after the filing of the Registration
Statement that the Company or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) under the Securities Act) of the Shares and (2) at the date hereof, the
Company was not and is not an “ineligible issuer,” as defined in Rule 405 (“Rule 405”) under the
Securities Act.
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(i) Due Incorporation. The Company has been duly organized and is validly existing as a
corporation or other legal entity in good standing (or the foreign equivalent thereof) under the
laws of its jurisdiction of organization, with the corporate power and authority to own its
properties and to conduct its business as currently being conducted and as described in the
Registration Statement, the Prospectus and the General Disclosure Package and is duly qualified to
transact business and is in good standing as a foreign corporation or other legal entity in each
other jurisdiction in which its ownership or leasing of property or the conduct of its business
requires such qualification, except where the failure to be so qualified and in good standing or
have such power or authority (i) would not have, individually or in the aggregate, a material
adverse effect upon, the general affairs, business, operations, prospects, properties, financial
condition, or results of operations of the Company and its Subsidiaries (as defined below), taken
as a whole, or (ii) impair in any material respect the power or ability of the Company to perform
its obligations under this Agreement or to consummate any transactions contemplated by the
Agreement and the Subscription Agreements, including the issuance and sale of the Shares (any such
effect as described in clauses (i) or (ii), a “Material Adverse Effect”).
(j) Subsidiaries. The Company has no significant subsidiaries (as such term is defined in Rule
1-02 of Regulation S-X promulgated by the Commission) other than as set forth on Schedule
II hereto (each, a “Subsidiary” and collectively, the “Subsidiaries”). Each Subsidiary has
been duly organized and is validly existing as a corporation or other legal entity in good standing
(or the foreign equivalent thereof) under the laws of its jurisdiction of organization, with the
corporate power and authority to own its properties and to conduct its business as currently being
conducted and as described in the Registration Statement, the Prospectus and the General Disclosure
Package. All of the issued and outstanding capital stock (or similar equity interests) of each
Subsidiary has been duly authorized and validly issued and is fully paid and nonasssessable and,
except as described in the General Disclosure Package, are owned by the Company, directly or
through subsidiaries, free from liens, encumbrances and defects.
(k) Due Authorization and Enforceability. The Company has the full right, power and
authority to enter into this Agreement, each of the Subscription Agreements and the Escrow
Agreement, and to perform and discharge its obligations hereunder and thereunder; and each of this
Agreement, the Escrow Agreement and each Subscription Agreement has been duly authorized, executed
and delivered by the Company, and constitutes a valid, legal and binding obligation of the Company,
enforceable against the Company 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 applicable bankruptcy, insolvency, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity.
(l) The Shares. The issuance of the Shares has been duly and validly authorized by the
Company and, when issued, delivered and paid for in accordance with the terms of this Agreement and
the Subscription Agreements, will have been duly and validly issued and will be fully paid and
nonassessable. Except as otherwise stated in the General Disclosure Package and the Prospectus,
there are no statutory or contractual preemptive rights or other rights to subscribe for or
purchase or acquire any shares of Common Stock of the Company, which have not been waived or
complied with and will conform in all material respects to the description thereof contained in the
General Disclosure Package and the Prospectus.
(m) Capitalization. The information set forth under the caption “Capitalization” in the
Prospectus (and any similar sections or information, if any, contained in the General Disclosure
Package) is fairly presented on a basis consistent with the Company’s financial statements. The
authorized capital stock of the Company conforms as to legal matters to the description thereof
contained in the Prospectus under the caption “Description of Capital Stock” (and any similar
sections or
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information, if any, contained in the General Disclosure Package). The issued and outstanding
shares of capital stock of the Company have been duly authorized and validly issued, are fully paid
and nonassessable, and have been issued in compliance with all federal and state securities laws.
None of the outstanding shares of Common Stock was issued in violation of any preemptive rights,
rights of first refusal or other similar rights to subscribe for or purchase or acquire any
securities of the Company. There are no authorized or outstanding shares of capital stock,
options, warrants, preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable for, any capital stock of the Company or
any of its Subsidiaries other than those described in the Prospectus and the General Disclosure
Package. The description of the Company’s stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, as described in the Prospectus
and the General Disclosure Package, accurately and fairly present the information required to be
shown with respect to such plans, arrangements, options and rights.
(n) No Conflict. The execution, delivery and performance by the Company of this Agreement,
the Subscription Agreements and the Escrow Agreement and the consummation of the transactions
contemplated hereby and thereby, including the issuance and sale by the Company of the Shares, will
not conflict with or result in a breach or violation of, or constitute a default under (nor
constitute any event which with notice, lapse of time or both would result in any breach or
violation of or constitute a default under), give rise to any right of termination or other right
or the cancellation or acceleration of any right or obligation or loss of a benefit under, or give
rise to the creation or imposition of any lien, encumbrance, security interest, claim or charge
upon any property or assets of the Company or any Subsidiary pursuant to (i) any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or
any Subsidiary is a party or by which any of them or any of their respective properties may be
bound or to which any of the property or assets of the Company or any of its Subsidiaries is
subject, (ii) result in any violation of the provisions of the charter or by-laws of the Company
or any Subsidiary, or (iii) result in any violation of any law, statute, rule, regulation,
judgment, order or decree of any court or governmental agency or body, domestic or foreign, having
jurisdiction over the Company or its Subsidiaries or any of their properties or assets except, in
the case of each of clauses (i) and (iii) above, for any such conflict, breach, violation, default,
lien, charge or encumbrance that would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect..
(o) No Consents Required. No approval, authorization, consent or order of or filing,
qualification or registration with, any court or governmental agency or body, foreign or domestic,
which has not been made, obtained or taken and is not in full force and effect, is required in
connection with the execution, delivery and performance of this Agreement, the Subscription
Agreements and the Escrow Agreement by the Company, the issuance and sale of the Shares or the
consummation by the Company of the transactions contemplated hereby or thereby other than (i) as
may be required under the Securities Act or the Exchange Act, (ii) any necessary qualification of
the Shares under the securities or blue sky laws of the various jurisdictions in which the Shares
are being offered by the Placement Agents, (iii) under the rules and regulations of the National
Association of Securities Dealers, Inc. (“NASD”) or (iv) the Nasdaq Global Market in connection
with the distribution of the Shares by the Placement Agents.
(p) Registration Rights. Except as otherwise described in the Registration Statement, the
Prospectus and the General Disclosure Package, there are no contracts, agreements or understandings
between the Company and any person granting such person the right (other than rights which have
been waived in writing in connection with the transactions contemplated by this Agreement or
otherwise satisfied) to require the Company to register any securities with the Commission.
(q) Lock-Up Agreements. The Company has received copies of the executed Lock-Up Agreements,
substantially in the form of Exhibit B hereto (the “Lock-Up Agreement”) executed by
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each person listed on Exhibit C hereto, and such Lock-Up Agreements shall be in full
force and effect on the Closing Date.
(r) Independent Accountants. Ernst & Young LLP, whose reports on the audited consolidated
financial statements of the Company and the Subsidiaries are incorporated by reference in the
Registration Statement, the Prospectus and the General Disclosure Package, are independent public
accountants with respect to the Company as required by the Securities Act, and the applicable
published rules and regulations thereunder.
(s) Financial Statements. The consolidated financial statements of the Company, together with
the related schedules and notes thereto, set forth or incorporated by reference in the Registration
Statement, the Prospectus and the General Disclosure Package, comply in all material respects with
the applicable requirements of the Securities Act and the Exchange Act, as applicable, and present
fairly in all material respects (i) the financial condition of the Company and the Subsidiaries,
taken as a whole, as of the dates indicated and (ii) the consolidated results of operations,
stockholders’ equity and changes in cash flows of the Company and the Subsidiaries, taken as a
whole, for the periods therein specified; and such financial statements and related schedules and
notes thereto have been prepared in conformity with United States generally accepted accounting
principles, consistently applied throughout the periods involved (except as otherwise stated
therein and subject, in the case of unaudited financial statements, to the absence of footnotes and
normal year-end adjustments). There are no other financial statements (historical or pro forma)
that are required to be included or incorporated by reference in the Registration Statement, the
Prospectus or the General Disclosure Package.
(t) Absence of Material Changes. Subsequent to the respective dates as of which information is
given in the Registration Statement, the Prospectus and the General Disclosure Package, and except
as may be otherwise stated or incorporated by reference in the Registration Statement, the
Prospectus and the General Disclosure Package, there has not been (i) any change in the capital
stock of the Company (except for changes in the number of outstanding shares of Common Stock of the
Company due to the issuance of shares upon the exercise or conversion of securities exercisable
for, or convertible into, shares of Common Stock outstanding on the date hereof) or long-term debt
of the Company or any of its Subsidiaries or any dividend or distribution of any kind declared, set
aside for payment, paid or made by the Company on any class of capital stock; (ii) any material
adverse change, or, to the knowledge of the Company, any development that would result in a
material adverse change in or affecting the general affairs, business, prospects, properties,
management, consolidated financial position, stockholders’ equity or results of operations of the
Company and its Subsidiaries taken as a whole (a “Material Adverse Change”); (iii) neither the
Company nor any of its Subsidiaries have entered or will enter into any transaction or agreement,
not in the ordinary course of business, that is material to the Company and its Subsidiaries taken
as a whole or incurred or will incur any liability or obligation, direct or contingent, not in the
ordinary course of business, that is material to the Company and its Subsidiaries taken as a whole;
and (iv) neither the Company nor any of its Subsidiaries has sustained or will sustain any material
loss or interference with its business from any force majeure, including fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or
any action, order or decree of any court or arbitrator or governmental or regulatory authority,
except in each case as otherwise disclosed in the Registration Statement, the General Disclosure
Package and the Prospectus.
(u) Legal Proceedings. There are no legal or governmental actions, suits, claims or
proceedings pending (including, without limitation, any proceedings pending before the Food and
Drug Administration of the U.S. Department of Health and Human Services (the “FDA”)) to which the
Company or any Subsidiary is or would be a party or of which any of their respective properties is
or would be subject at law or in equity, which are required to be described in the Registration
Statement, the
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General Disclosure Package or the Prospectus or a document incorporated by reference therein
and are not so described therein, or which, singularly or in the aggregate, if resolved adversely
to the Company or any Subsidiary, would reasonably be likely to result in a Material Adverse Effect
or prevent or materially and adversely affect the ability of the Company to consummate the
transactions contemplated hereby. To the Company’s knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
(v) No Violation. Neither the Company nor any Subsidiary is in breach or violation of or in
default (nor has any event occurred which with notice, lapse of time or both would result in any
breach or violation of, or constitute a default) (i) under the provisions of its charter or bylaws
(or analogous governing instrument, as applicable) or (ii) in the performance or observance of any
term, covenant, obligation, agreement or condition contained in any indenture, mortgage, deed of
trust, bank loan or credit agreement or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument to which the Company or any Subsidiary is a party or by
which any of them or any of their properties may be bound or affected, or (iii) in the performance
or observance of any statute, law, rule, regulation, ordinance, judgment, order or decree of any
court, regulatory body, administrative agency, governmental body, arbitrator or other authority
having jurisdiction over the Company, the Subsidiaries or any of their respective properties, as
applicable (including, without limitation, those administered by the FDA or by any foreign,
federal, state or local governmental or regulatory authority performing functions similar to those
performed by the FDA), except, with respect to clauses (ii) and (iii) above, to the extent any such
contravention has been waived or would not result in a Material Adverse Effect.
(w) Permits. The Company and each Subsidiary has made all filings, applications and
submissions required by, and owns or possesses all approvals, licenses, certificates,
certifications, clearances, consents, exemptions, marks, notifications, orders, permits and other
authorizations issued by, the appropriate federal, state or foreign regulatory authorities
(including, without limitation, the FDA, and any other foreign, federal state or local government
or regulatory authorities performing functions similar to those performed by the FDA) necessary to
conduct its business as described in the General Disclosure Package (collectively, “Permits”),
except for such Permits which the failure to obtain would not have a Material Adverse Effect (the
“Immaterial Permits”), and is in compliance in all material respects with the terms and conditions
of all such Permits other than the Immaterial Permits (the “Required Permits”). Neither the
Company nor any Subsidiary has received notice of any proceedings relating to revocation or
modification of, any such Required Permit, which, individually or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(x) Not an Investment Company. Neither the Company nor any Subsidiary is or, after giving
effect to the offering and sale of the Shares and the application of the proceeds thereof as
described in the General Disclosure Package and the Prospectus, will be required to register as an
“investment company” as defined in the Investment Company Act of 1940, as amended (the “Investment
Company Act”), and the rules and regulations of the Commission thereunder.
(y) No Price Stabilization. Neither the Company nor any Subsidiary nor, to the Company’s
knowledge, any of their respective officers, directors, affiliates or controlling persons has taken
or will take, directly or indirectly, any action designed to or that might be reasonably expected
to cause or result in, or which has constituted or which might reasonably be expected to constitute
the stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of the Shares.
(z) Good Title to Property. The Company and each Subsidiary has good and valid title to all
property (whether real or personal) described in the General Disclosure Package as being
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owned by each of them, in each case free and clear of all liens, claims, security interests,
other encumbrances or defects (collectively, “Liens”), except such as are described in the
Prospectus and the General Disclosure Package and those that would not, individually or in the
aggregate materially affect the value of such property and do not materially interfere with the use
made and proposed to be made of such property by the Company and the Subsidiaries. All of the
property described in the General Disclosure Package as being held under lease by the Company or
any Subsidiary is held thereby under valid, subsisting and enforceable leases, without any liens,
restrictions, encumbrances or claims, except those that, individually or in the aggregate, would
not have a Material Adverse Effect and do not materially interfere with the use made and proposed
to be made of such property by the Company and the Subsidiaries.
(aa) Intellectual Property Rights. Except as set forth in the Registration Statement, the
Prospectus and the General Disclosure Package, the Company and the Subsidiaries own or possess the
right to use all patents, trademarks, trademark registrations, service marks, service xxxx
registrations, trade names, copyrights, licenses, inventions, software, databases, know-how,
Internet domain names, trade secrets and other unpatented and/or unpatentable proprietary or
confidential information, systems or procedures, and other intellectual property (collectively,
“Intellectual Property”) necessary to carry on their respective businesses as currently conducted,
and as proposed to be conducted and described in the General Disclosure Package and the Prospectus,
and the Company is not aware of any claim to the contrary or any challenge by any other person to
the rights of the Company and the Subsidiaries with respect to the foregoing except for those that
could not have a Material Adverse Effect. The Intellectual Property licenses described in the
General Disclosure Package and the Prospectus are, to the knowledge of the Company, valid, binding
upon, and enforceable by or against the parties thereto in accordance to its terms. The Company and
each Subsidiary has complied in all material respects with, and is not in breach nor has received
any asserted or threatened claim of breach of, any Intellectual Property license described in the
General Disclosure Package and the Prospectus, and the Company has no knowledge of any breach or
anticipated breach by any other person to any Intellectual Property license. The Company’s and each
Subsidiary’s businesses as now conducted and as proposed to be conducted as set forth in the
Registration Statement, the Prospectus and the General Disclosure Package, to the knowledge of the
Company, do not and will not infringe or conflict with any patents, trademarks, service marks,
trade names, copyrights, trade secrets, licenses or other Intellectual Property or franchise right
of any person. The Company has not received notice of any material claim against the Company or any
Subsidiary alleging the infringement by the Company or any of its Subsidiary of any patent,
trademark, service xxxx, trade name, copyright, trade secret, license in or other intellectual
property right or franchise right of any person. The Company and each Subsidiary has taken all
reasonable steps to protect, maintain and safeguard its rights in all Intellectual Property,
including the execution of appropriate nondisclosure and confidentiality agreements. The
consummation of the transactions contemplated by this Agreement will not result in the loss or
impairment of or payment of any additional amounts with respect to, nor require the consent of any
other person in respect of, the Company’s or any of Subsidiary’s right to own, use, or hold for use
any of the Intellectual Property as owned, used or held for use in the conduct of the businesses as
currently conducted. The Company and each Subsidiary has duly and properly filed or caused to be
filed with the United States Patent and Trademark Office (the “PTO”) and applicable foreign and
international patent authorities all patent applications owned by the Company and the Subsidiaries
(the “Company Patent Applications”). To the knowledge of the Company, the Company and each
Subsidiary has complied with the PTO’s duty of candor and disclosure for the Company Patent
Applications and has made no material misrepresentation in the Company Patent Applications. The
Company is not aware of any information material to a determination of patentability regarding the
Company Patent Applications not called to the attention of the PTO or similar foreign authority.
The Company is not aware of any information not called to the attention of the PTO or similar
foreign authority that would preclude the grant of a patent for the Company Patent Applications.
The Company has no knowledge of any
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information that would preclude the Company, or as applicable, any Subsidiary, from having
clear title to the Company Patent Applications.
(bb) No Labor Disputes. No labor problem or dispute with the employees of the Company
exists, or, to the Company’s knowledge, is threatened or imminent, which would reasonably be
expected to result in a Material Adverse Effect. The Company is not aware that any key employee or
significant group of employees of the Company plans to terminate employment with the Company.
(cc) Taxes. The Company and each Subsidiary has (i) timely filed all necessary federal,
state, local and foreign income and franchise tax returns (or timely filed applicable extensions
therefore) that have been required to be filed and (ii) are 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 or any Subsidiary is contesting in good faith and for which adequate
reserves have been provided.
(dd) ERISA. The Company has fulfilled its obligations, if any, under the minimum funding
standards of Section 302 of ERISA and the regulations and published interpretations thereunder with
respect to each “plan” (as defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company are eligible to participate and each such plan
is in compliance in all material respects with the presently applicable provisions of ERISA and
such regulations and published interpretations. No “prohibited transaction” (as defined in Section
406 of ERISA, or Section 4975 of the Internal Revenue Code of 1986, as amended from time to time
(the “Code”)) or “accumulated funding deficiency” (as defined in Section 302 of ERISA) or any of
the events set forth in Section 4043(b) of ERISA (other than events with respect to which the
thirty (30)-day notice requirements under Section 4043 of ERISA has been waived) has occurred or
could reasonably be expected to occur with respect to any employee benefit plan of the Company or
any Subsidiary, which could, singularly or in the aggregate, have a Material Adverse Effect.
(ee) Compliance with Environmental Laws. The Company and its Subsidiaries (a) are in
compliance with any and all applicable foreign, federal, state and local laws, orders, rules,
regulations, directives, decrees and judgments relating to the use, treatment, storage and disposal
of hazardous or toxic substances or waste and protection of human health and safety or the
environment which are applicable to their businesses (“Environmental Laws”), (b) have received and
are in compliance with all permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct its business; and (c) have not received notice of any actual or
potential liability for the investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except in the case of subsections (a), (b)
and (c) of this subsection (g)(g) as would not, individually or in the aggregate, have a Material
Adverse Effect.
(ff) Insurance. The Company and each Subsidiary maintains or is covered by insurance provided
by recognized, financially sound and reputable institutions with policies in such amounts and
covering such risks as is adequate for the conduct of its business and the value of its properties
and as is customary for companies engaged in similar businesses in similar industries. All such
insurance is fully in force on the date hereof and will be fully in force as of the Closing Date.
Neither the Company nor any Subsidiary has any 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.
(gg) Accounting Controls. The Company and each Subsidiary maintains (x) 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
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recorded as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles 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.
(hh) Disclosure Controls. The Company has established, maintains and evaluates “disclosure
controls and procedures” (as such term is defined in Rule 13a-15e and 15d-15e under the Exchange
Act), which (i) are designed to ensure that material information relating to the Company is made
known to the Company’s principal executive officer and its principal financial officer by others
within those entities, particularly during the periods in which the periodic reports required under
the Exchange Act are being prepared, (ii) have been evaluated for effectiveness as of the end of
the last fiscal period covered by the Registration Statement; and (iii) such disclosure controls
and procedures are effective to perform the functions for which they were established. There are no
significant deficiencies and material weaknesses in the design or operation of internal controls
which could adversely affect the Company’s ability to record, process, summarize, and report
financial data to management and the Board of Directors.
(ii) Contracts; Off-Balance Sheet Interests. There is no document, contract, permit or
instrument, or off-balance sheet transaction (including without limitation, any “variable
interests” in “variable interest entities,” as such terms are defined in Financial Accounting
Standards Board Interpretation No. 46) of a character required by the Securities Act or the Rules
and Regulations to be described in the Registration Statement or the General Disclosure Package or
to be filed as an exhibit to the Registration Statement or document incorporated by reference
therein, which is not described or filed as required. The contracts described in the immediately
preceding sentence to which the Company is a party have been duly authorized, executed and
delivered by the Company, constitute valid and binding agreements of the Company, are enforceable
against and by the Company in accordance with the terms thereof and are in full force and effect on
the date hereof.
(jj) No Undisclosed Relationships. No relationship, direct or indirect, exists between or
among the Company and any of its Subsidiaries on the one hand and the directors, officers,
stockholders, customers or suppliers of the Company or any of its Subsidiaries or any of their
affiliates on the other hand, which is required to be described in the General Disclosure Package
and the Prospectus or a document incorporated by reference therein and which has not been so
described.
(kk) Brokers Fees. Except as disclosed in the General Disclosure Package, there are no
contracts, agreements or understandings between the Company and any person (other than this
Agreement) that would give rise to a valid claim against the Company, the Subsidiaries or any of
the Placement Agents for a brokerage commission, finder’s fee or other like payment in connection
with the offering and sale of the Shares.
(ll) Forward-Looking Statements. No forward-looking statements (within the meaning of Section
27A of the Securities Act and Section 21E of the Exchange Act) contained in either the General
Disclosure Package or the Prospectus has been made or reaffirmed without a reasonable basis or has
been disclosed other than in good faith.
(mm) Nasdaq; Exchange Act Registration. The Common Stock is registered pursuant to Section
12(b) or 12(g) of the Exchange Act and is listed on the Nasdaq Global Market, and the Company has
taken no action designed to, or reasonably likely to have the effect of, termination the
registration of the Common Stock under the Exchange Act or delisting the Common Stock from the
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Nasdaq Global Market, nor has the Company received any notification that the Commission or the
Nasdaq Global Market is contemplating terminating such registration or listing.
(nn) Xxxxxxxx-Xxxxx Act. The Company, and to its knowledge, all of the Company’s directors or
officers, in their capacities as such, is in compliance in all material respects with all
applicable effective provisions of the Xxxxxxxx-Xxxxx Act of 2002, as amended and any related rules
and regulations promulgated by the Commission. Each of the principal executive officer and the
principal financial officer of the Company (or each former principal executive officer of the
Company and each former principal financial officer of the Company as applicable) has made all
certifications required by Sections 302 and 906 of the Xxxxxxxx-Xxxxx Act with respect to all
reports, schedules, forms, statements and other documents required to be filed by it with the
Commission. For purposes of the preceding sentence, “principal executive officer” and “principal
financial officer” shall have the meanings given to such terms in the Xxxxxxxx-Xxxxx Act.
(oo) Foreign Corrupt Practices. Neither the Company nor, to the Company’s knowledge, any
other person associated with or acting on behalf of the Company, including without limitation any
director, officer, agent or employee of the Company or its Subsidiaries has, directly or
indirectly, during the last five years, while acting on behalf of the Company or its Subsidiaries
(i) used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity or failed to disclose fully any contribution in violation
of law, (ii) made any payment to any federal or state governmental officer or official, o other
person charged with similar public or quasi-public duties, other than payments required or
permitted by the laws of the United States or any jurisdiction thereof, (iii) violated or is in
violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended or (iv)
made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.
(pp) NASD Affiliations. Neither the Company nor any Subsidiary nor any of their affiliates
(within the meaning of NASD Conduct Rule 2720(b)(1)(a)) directly or indirectly controls, is
controlled by, or is under common control with, or is an associated person (within the meaning of
Article I, Section 1(e)(e) of the By-laws of the NASD) of, any member firm of the NASD.
(qq) Trading Market . Assuming the accuracy of the representations of the Investors in the
Subscription Agreements, no approval of the shareholders of the Company under the rules and
regulations of any trading market (including Rule 4350 of the Nasdaq Global Marketplace Rules) is
required for the Company to issue and deliver to the Investors the Shares.
(rr) NASD Review. To enable the Placement Agents to rely on Rule 2710(b)(7)(C)(i) of the
NASD, the registration of the Shares registered with the Commission could have been affected on
Form S-3 under the Securities Act pursuant to the standards for such Form S-3 in effect prior to
October 21, 1992.
(ss) Clinical Studies. The clinical, pre-clinical and other studies and tests conducted by or
on behalf of or sponsored by the Company or in which the Company or the Subsidiaries or products or
product candidates have participated that are described in the General Disclosure Package and the
Prospectus were and, if still pending, are being conducted in accordance in all material respects
with all applicable federal, state or foreign statutes, laws, rules and regulations (including,
without limitation, those administered by the FDA or by any foreign, federal, state or local
governmental or regulatory authority performing functions similar to those performed by the FDA and
current Good Laboratory and Good Clinical Practices) and in accordance with experimental protocols,
procedures and controls pursuant to, where applicable, accepted professional scientific methods.
The descriptions in the Registration Statement, the Prospectus and the General Disclosure Package
of the results of such studies, tests and
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trials are accurate and complete in all material respects and fairly present the published
data derived from such studies, tests and trials. Neither the Company nor any Subsidiary have
received any notices or other correspondence from the FDA or any other foreign, federal, state or
local governmental or regulatory authority performing functions similar to those performed by the
FDA with respect to any ongoing clinical or pre-clinical studies or tests requiring the
termination, suspension or material modification of such studies, tests or preclinical or clinical
trials, which termination, suspension or material modification would reasonably be expected to
result in a Material Adverse Effect.
Any certificate signed by any officer of the Company or any Subsidiary and delivered to the
Placement Agents or to counsel for the Placement Agents in connection with the offering of the
Shares shall be deemed a representation and warranty by the Company to the Placement Agents and the
Investors as to the matters covered thereby.
3. Covenants. The Company covenants and agrees with the Placement Agents as follows:
(a) Filing of Prospectuses. The Company will file: (i) each Preliminary Prospectus and the
Prospectus with the Commission within the time periods specified by Rule 424(b) and Rules 430 B or
430C under the Securities Act, (ii) any Issuer Free Writing Prospectus to the extent required by
Rule 433 under the Securities Act, if applicable, (iii) all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of the Prospectus and during
the Prospectus Delivery Period.
(b) Filing of Amendments. The Company will promptly advise the Placement Agents of any
proposal to amend or supplement the Registration Statement, the Prospectus or the General
Disclosure Package until the completion of the purchase and sale of the Shares contemplated herein
and will afford the Placement Agents a reasonable opportunity to comment on any such proposed
amendment or supplement and to file no such amendment or supplement to which the Representatives
shall object in writing, which objection shall not be unreasonable; and the Company will also
advise the Placement Agents promptly of (i) the filing of any such amendment or supplement, (ii)
any request by the Commission or its staff for any amendment to the Registration Statement, for any
supplement to the Prospectus or for any additional information, (iii) the time and date when any
post-effective amendment to the Registration Statement becomes effective, but only during the
Prospectus Delivery Period; (iv) receipt by the Company of any notification with respect to any
suspension or the approval of the Shares from any securities exchange upon which it is listed for
trading or included or designated for quotation, or the initiation or threatening of any proceeding
for such purpose, (v) the institution by the Commission of any stop order proceedings in respect of
the Registration Statement or the threatening of any proceeding for that purpose, and (iv) the
receipt by the Company of any notification with respect to the suspension of the qualification of
the Shares in any jurisdiction or the institution or threatening of any proceedings for such
purpose. The Company will use its best efforts to prevent the issuance of any such stop order or
the suspension of any such qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(c) Continued Compliance with Securities Law. If, during the Prospectus Delivery Period, any
event occurs as a result of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
or if it is necessary at any time to amend the Registration Statement or supplement the Prospectus
to comply with the Securities Act, the Company will promptly notify the Placement Agents of such
event and will promptly prepare and file with the Commission and furnish, at its own expense, to
the Placement Agents and, to the extent applicable, the dealers and any other dealers upon request
of the Placement Agents, an
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amendment or supplement which will correct such statement or omission or an amendment which
will effect such compliance.
(d) Issuer Free Writing Prospectuses. The Company will (i) not make any offer relating to the
Shares that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a
“free writing prospectus” (as defined in Rule 405 under the Securities Act) required to be filed by
the Company with the Commission under Rule 433 under the Securities Act unless the Representatives
approve its use in writing prior to first use; provided that the prior written consent of the
Representatives hereto shall be deemed to have been given in respect of the Issuer Free Writing
Prospectus(es) included in Schedule III hereto, (ii) comply with the requirements of Rules
164 and 433 under the Securities Act applicable to any Issuer Free Writing Prospectus, including
the requirements relating to timely filing with the Commission, legending and record keeping and
(iii) not take any action that would result in a Placement Agent or the Company being required to
file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus
prepared by or on behalf of such Placement Agents that such Placement Agents otherwise would not
have been required to file thereunder. The Company will satisfy the conditions in Rule 433 under
the Securities Act to avoid a requirement to file with the Commission any electronic road show.
(e) Conflicting Issuer Free Writing Prospectus. 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
contained in the Registration Statement relating to the Shares 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, the Company promptly will notify the Placement Agents and will
promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or omission. The foregoing sentence does 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 Placement Agents specifically
for inclusion therein, which information the parties hereto agree is limited to the Placement
Agents’ Information.
(f) Delivery of Copies. The Company will deliver promptly to the Placement Agents and their
counsel such number of the following documents as the Representatives shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed with the Commission and each
amendment thereto (in each case excluding exhibits), (ii) copies of any Preliminary Prospectus
related to the Shares; (iii) any Issuer Free Writing Prospectus, (iv) during the Prospectus
Delivery Period, copies of the Prospectus (or any amendments or supplements thereto); (v) any
document incorporated by reference in the Prospectus (other than any such document that is filed
with the Commission electronically via XXXXX or any successor system and (vi) all correspondence to
and from, and all documents issued to and by, the Commission in connection with the registration of
the Shares under the Securities Act.
(g) Blue Sky Laws. The Company will promptly take or cause to be taken, from time to time,
such actions as the Representatives may reasonably request to qualify the Shares for offering and
sale under the state securities, or blue sky, laws of such states or other jurisdictions as the
Representatives may reasonably request and to maintain such qualifications in effect so long as the
Placement Agents may request for the distribution of the Shares, provided, that in no event shall
the Company be obligated to qualify as a foreign corporation in any jurisdiction in which it is not
so qualified or to file a general consent to service of process in any jurisdiction or subject
itself to taxation as doing business in any jurisdiction.
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(h) Earnings Statement. As soon as practicable, but in any event not later than 16 months
after the date of this Agreement, the Company will make generally available to holders of its
securities, an earnings statement of the Company and its subsidiaries (which need not be audited)
that will satisfy the provisions of Section 11(a) of the Securities Act and the Rules and
Regulations (including, at the option of the Company, Rule 158). Any document or information filed
with the Commission and available on XXXXX shall be deemed to be delivered for purposes of this
section.
(i) Use of Proceeds. The Company will apply the net proceeds from the sale of the Shares in
the manner set forth in the General Disclosure Package and the Prospectus under the heading “Use of
Proceeds.”
(j) Lock-Up Period. Beginning on the date hereof and continuing for a period of 90 days after
the date of the Prospectus (the “Lock-Up Period”), the Company will not (1) offer to sell,
hypothecate, pledge, announce the intention to sell, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option, right or warrant
to purchase or otherwise transfer or dispose of, directly or indirectly, or establish or increase a
put equivalent position or liquidate or decrease a call equivalent position within the meaning of
Section 16 of the Exchange Act, with respect to, any shares of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock; (2) file or cause to become
effective a registration statement under the Securities Act relating to the offer and sale of any
shares of Common Stock or securities convertible into or exercisable or exchangeable for Common
Stock except for a registration statement on Form S-8 relating to employee benefit plans and a
registration statement on Form S-3 pursuant to the Asset Purchase Agreement dated December 22, 2006
with Xxxxxxx Life Sciences LLC or (3) enter into any swap, hedge or other agreement that transfers,
in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any
such transaction described in clause (i), (ii) or (iii) above is to be settled by delivery of
Common Stock or such other securities, in cash or otherwise, without the prior written consent of
the Representatives (which consent may be withheld in its sole discretion), other than (i) the
Shares to be sold hereunder, (ii) the issuance of restricted Common Stock or options to acquire
Common Stock pursuant to the Company’s employee benefit plans, qualified stock option plans or
other employee compensation plans as such plans are in existence on the date hereof and described
in the Registration Statement (excluding the exhibits thereto), the General Disclosure Package and
the Prospectus, (iii) issuances of Common Stock upon the exercise of options or warrants disclosed
as outstanding in the Registration Statement (excluding the exhibits thereto), the General
Disclosure Package and the Prospectus or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of the date of this Agreement; (iv) the issuance by the
Company of any shares of Common Stock as consideration for mergers, acquisitions, other business
combinations, or strategic alliances, occurring after the date of this Agreement; provided that
each recipient of shares pursuant to this clause (iv) agrees that all such shares remain subject to
restrictions substantially similar to those contained in this subsection 3(j); or (v) the purchase
or sale of the Company’s securities pursuant to a plan, contract or instruction that satisfies all
of the requirements of Rule 10b5-1(c)(1)(i)(B) that was in effect prior to the date hereof.
Notwithstanding the foregoing, for the purpose of allowing the Placement Agents to comply with NASD
Rule 2711(f)(4), if (1) during the last 17 days of the Lock-Up Period, the Company releases
earnings results or publicly announces other material news or a material event relating to the
Company occurs or (2) prior to the expiration of the Lock-Up Period, the Company announces that it
will release earnings results during the 16 day period beginning on the last day of the Lock-Up
Period, then in each case the Lock-Up Period will be extended until the expiration of the 18 day
period beginning on the date of release of the earnings results or the public announcement
regarding the material news or the occurrence of the material event, as applicable, unless the
Representatives waive, in writing, such extension. The Company agrees not to accelerate the
vesting of any option or warrant or the lapse of any repurchase right prior to the expiration of
the Lock-Up Period.
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(k) Press Releases. Prior to 9:30 a.m. New York City time on the business day immediately
subsequent to the date hereof, the Company shall issue a press release (the “Press Release”)
reasonably acceptable to the Representatives disclosing the execution of this Agreement, the
Subscription Agreements and the transaction contemplated hereby and thereby. Prior to the Closing
Date, the Company will not issue any press release or other communication directly or indirectly or
hold any press conference with respect to the Company, the Subsidiaries, their condition, financial
or otherwise, or the earnings, business, operations or prospects of any of them, or the offering of
the Shares (except for routine oral marketing communications in the ordinary course of business and
consistent with the past practices of the Company and of which the Placement Agents is notified),
without the prior written consent of the Representatives, unless in the reasonable judgment of the
Company and its counsel, and after notification to the Placement Agents, such press release or
communication is required by law or applicable stock exchange, in which case the Company shall use
its reasonable best efforts to allow the Placement Agents reasonable time to comment on such
release or other communication in advance of such issuance.
(l) Stabilization. The Company will not, and will cause the Subsidiaries not to, take directly
or indirectly any action designed, or that might reasonably be expected to cause or result in, or
that will constitute, stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Shares.
(m) Transfer Agent. The Company shall engage and maintain, at its expense, a transfer agent
and, if necessary under the jurisdiction of incorporation of the Company, a registrar for the
Shares.
(n) Listing. The Company shall use its best efforts to cause the Shares to be listed for
quotation on the Nasdaq Global Market at the Closing Date and to maintain such listing.
4. Costs and Expenses. The Company, whether or not the transactions contemplated hereunder are
consummated or this Agreement is terminated, will pay or reimburse if paid by the Placement Agent
all costs and expenses incident to the performance of the obligations of the Company under this
Agreement and in connection with the transactions contemplated hereby, including but not limited to
costs and expenses of or relating to (i) the preparation, printing, filing, delivery and shipping
of the Registration Statement, any Issuer Free Writing Prospectus, each Preliminary Prospectus, the
General Disclosure Package and the Prospectus, and any amendment or supplement to any of the
foregoing (including costs of mailing and shipment), (ii) the registration, issue, sale and
delivery of the Shares including any stock or transfer taxes and stamp or similar duties payable
upon the sale, issuance or delivery of the Shares and the printing, delivery, and shipping of the
certificates representing the Shares, (iii) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions designated pursuant to
Section 3(g), (including the reasonable legal fees and filing fees, and other disbursements
of counsel to the Placement Agent in connection therewith), and, if reasonably requested by the
Placement Agent, the preparation and printing and furnishing of copies of any blue sky surveys to
the Placement Agent, (iv) the fees and expenses of any transfer agent or registrar for the Shares,
(v) any filings required to be made by the Placement Agent or the Company with the NASD, and the
reasonable fees, disbursements and other charges of counsel for the Placement Agent in connection
with the NASD’s review and approval of the Placement Agent’s participation in the offering
(including all COBRADesk fees), (vi) fees, disbursements and other charges of counsel to the
Company (vii) listing fees, if any, for the listing or quotation of the Shares on the Nasdaq Global
Market, (viii) fees and disbursements of the Company’s auditor incurred in delivering the letter(s)
described in Section 5(i) of this Agreement, (ix) fees of the Escrow Agent, and (x) the
costs and expenses of the Company and the Placement Agent in connection with the marketing of the
offering and the sale of the Shares to prospective investors including, but not limited to, those
related to any presentations or meetings
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undertaken in connection therewith including, without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any consultants engaged with the
written consent of the Company in connection with the road show presentations, travel, lodging and
other expenses incurred by the officers of the Company and any such consultants, and the cost of
any aircraft or other transportation chartered in connection with the road show. In addition to
the above, the Company shall reimburse the Placement Agent for all fees, disbursements and other
charges of counsel to the Placement Agent in an amount not to exceed $80,000. If (1) this
Agreement shall be terminated by the Placement Agent pursuant to Section 9 hereof, the
Company will, in addition to paying the amounts described in Section 4 hereof, reimburse
the Placement Agent for all of the reasonable out-of-pocket disbursements including, but not
limited to, the reasonable fees and disbursements of its counsel.
5. Conditions of Placement Agents’ Obligations. The respective obligations of the Placement
Agents hereunder and the Investors under the Subscription Agreements are subject to the following
conditions:
(a) Filings with the Commission. The Prospectus (including the Final Prospectus Supplement)
shall have been filed with the Commission pursuant to Rule 424(b), in the manner and within the
time period so required.
(b) Abbreviated Registration Statement. If the Company has elected to rely upon Rule 462(b),
the registration statement filed under Rule 462(b) shall have become effective under the Securities
Act by 8:00 a.m., Washington, D.C. time, on the business day next succeeding the date of this
Agreement.
(c) No Stop Orders; Negative Assurance. Prior to the Closing: (i) no stop order suspending
the effectiveness of the Registration Statement or any part thereof, preventing or suspending the
use of the Prospectus or any Permitted Free Writing Prospectus or any part thereof shall have been
issued under the Securities Act and no proceedings for that purpose or pursuant to Section 8A under
the Securities Act shall have been initiated or threatened by the Commission, (ii) no order
suspending the qualification or registration of the Shares under the securities or blue sky laws of
any jurisdiction shall be in effect and (iii) all requests for additional information on the part
of the Commission (to be included or incorporated by reference in the Registration Statement, the
General Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus or otherwise)
shall have been complied with to the reasonable satisfaction of the Staff of the Commission. The
Placement Agents shall not have discovered and disclosed to the Company on or prior to the Closing
Date that (i) the Registration Statement, or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of the Representatives, is material, or omits to state
any fact which, in the opinion of the Representatives, is material and is required to be stated
therein or is necessary to make the statements therein not misleading, or (ii) the General
Disclosure Package or the Prospectus, or any amendment or supplement thereto, or any Issuer Free
Writing Prospectus, contains an untrue statement of a fact which, in the opinion of the
Representatives, is material, or omits to state any fact which, in the opinion of the
Representatives, is material and is required to be stated therein or is necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading.
(d) Action Preventing Issuance. No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any governmental agency or body
which would, as of the Closing Date, prevent the issuance or sale of the Shares; and no injunction,
restraining order or order of any other nature by any federal or state court of competent
jurisdiction shall have been issued as of the Closing Date which would prevent the issuance or sale
of the Shares.
-18-
(e) Objection of Placement Agents. No Prospectus or amendment or supplement to the
Registration Statement shall have been filed to which the Representatives shall have objected in
writing, which objection shall not be unreasonable.
(f) Material Adverse Change. Subsequent to the date of the latest audited financial
statements included or incorporated by reference in the General Disclosure Package, (a) neither the
Company nor any of its Subsidiaries has sustained any material loss or interference 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 in the General Disclosure Package, (b) 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 convertible
indebtedness), or material change in the short-term debt or long-term debt of the Company or any
Subsidiary (other than upon conversion of convertible indebtedness) or any material adverse change,
in or affecting the business, assets, general affairs, management, financial position, prospects,
stockholders’ equity or results of operations of the Company and the Subsidiaries, otherwise than
as set forth in the General Disclosure Package
(g) Representations and Warranties. Each of the representations and warranties of the Company
contained herein shall be true and correct when made and on and as of the Closing Date, as if made
on such date (except that those representations and warranties that address matters only as of a
particular date shall remain true and correct as of such date), and all covenants and agreements
herein contained to be performed on the part of the Company and all conditions herein contained to
be fulfilled or complied with by the Company at or prior to the Closing Date shall have been duly
performed, fulfilled or complied with.
(h) Opinion of Counsel to the Company. The Placement Agents shall have received from Xxxxxx,
Xxxxx & Bockius LLP, counsel to the Company, such counsel’s written opinion, addressed to the
Placement Agents and the Investors and dated the Closing Date, in form and substance as is
reasonably satisfactory to the Representatives. Such counsel shall also have furnished to the
Placement Agents a written statement covering negative assurances, addressed to the Placement
Agents and dated the Closing Date, in form and substance reasonably satisfactory to the
Representatives.
(i) Opinion of Counsel to the Placement Agents. The Placement Agents shall have received from
Xxxxxxxxxx Xxxxxxx PC, counsel for the Placement Agents, such counsel’s written opinion, addressed
to the Placement Agents and dated the Closing Date, covering such matters as are customarily
covered in transactions of this type. Such counsel shall also have furnished to the Placement
Agents a written statement, addressed to the Placement Agents and dated the Closing Date, covering
negative assurances.
(j) Accountant’s Comfort Letter. On the date hereof, the Placement Agents shall have received
a letter dated the date hereof, (the “Comfort Letter”), addressed to the Placement Agents and in
form and substance reasonably satisfactory to the Representatives and its counsel, from Ernst &
Young LLP, (i) confirming that they are independent public accountants with respect to the Company
within the meaning of the Securities Act and the Rules and Regulations and (ii) stating, as of the
date hereof (or, with respect to matters involving changes or developments since the respective
dates as of which specified financial information is given in the General Disclosure Package, as of
a date not more than three days prior to the date hereof), the conclusions and findings of such
firm with respect to the financial information and other matters ordinarily covered by accountants’
“comfort letters” to underwriters, delivered according to Statement of Auditing Standards No. 72
and Statement of Auditing Standard No. 100 (or successor bulletins), in connection with registered
public offerings.
-19-
(k) Bring-Down Letter. At the Closing Date, the Placement Agents shall have received from
Ernst & Young LLP a letter (the “Bring-Down Letter”), dated the Closing Date, addressed to the
Placement Agents and in form and substance reasonably satisfactory to the Placement Agents, (i)
confirming that they are independent public accountants with respect to the Company within the
meaning of the Securities Act and the Rules and Regulations, (ii) stating, as of the date of the
Bring-Down Letter (or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the General Disclosure
Package and the Prospectus, as of a date not more than three days prior to the date of the
Bring-Down Letter), the conclusions and findings of such firm with respect to the financial
information and other matters covered by the Comfort Letter and (iii) confirming in all material
respects the conclusions and findings set forth in the Comfort Letter.
(l) Officer’s Certificate. The Placement Agents shall have received on the Closing Date a
certificate, addressed to the Placement Agents and dated the Closing Date, of the chief executive
or chief operating officer and the chief financial officer or chief accounting officer of the
Company to the effect that:
(i) each of the representations, warranties and agreements of the Company in this Agreement
were true and correct when originally made and are true and correct as of the Closing Date; and the
Company has complied with all agreements and satisfied all the conditions on its part required
under this Agreement to be performed or satisfied at or prior to the Closing Date;
(ii) subsequent to the date of the latest audited financial statements included or
incorporated by reference in the General Disclosure Package, (a) neither the Company nor any of its
Subsidiaries has sustained any material loss or interference 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 in the General
Disclosure Package, (b) there has been no material change in the financial position or results of
operation of the Company, otherwise than as set forth in the General Disclosure Package;
(iii) no stop order suspending the effectiveness of the Registration Statement or any part
thereof or any amendment thereof or the qualification of the Shares for offering or sale, nor
suspending or preventing the use of the General Disclosure Package, the Prospectus or any Issuer
Free Writing Prospectus shall have been issued, and no proceedings for that purpose or pursuant to
Section 8A under the Securities Act shall be pending or to their knowledge, threatened by the
Commission or any state or regulatory body; and
(iv) (A) as of the date of such certificate, (x) the Registration Statement does not contain
any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading and (y) neither the Prospectus
nor the General Disclosure Package contains any untrue statement of a material fact or omits 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 and (B) no event has occurred
as a result of which it is necessary to amend or supplement the Registration Statement, the
Prospectus or the General Disclosure Package in order to make the statements therein not untrue or
misleading in any material respect.
(m) Secretary’s Certificate. On the Closing Date, the Company shall have furnished to the
Placement Agents a Secretary’s Certificate of the Company.
(n) Lock-Up Agreements. Each executive officer and director of the Company identified on
Exhibit C hereto shall have entered into Lock-Up Agreements substantially in the form
-20-
attached as Exhibit B hereto on or prior to the date hereof, and each such Lock-Up
Agreement, or a copy thereof, shall have been delivered to you and shall be in full force and
effect at the Time of Sale.
(o) The Nasdaq Global Market. The Shares shall have been approved for quotation on the Nasdaq
Global Market and listed and admitted and authorized for trading on the Nasdaq Global Market,
subject only to official notice of issuance. Satisfactory evidence of such actions shall have been
provided to the Representatives.
(p) Other Filings with the Commission. The Company shall have prepared and filed with the
Commission a Current Report on Form 8-K with respect to the transactions contemplated hereby,
including as an exhibit thereto this Agreement and any other documents relating thereto.
(q) No NASD Objection. The Placement Agents shall not have received any objection from the
NASD as to the fairness and reasonableness of the amount of compensation allowable or payable to
the Placement Agents in connection with the issuance and sale of the Shares.
(r) Subscription Agreements. The Company shall have entered into the Subscription Agreements
with each of the Investors, and such agreements shall be in full force and effect on the Closing
Date.
(s) Escrow Agreement. The Company shall have entered into the Escrow Agreement, and such
agreement shall be in full force and effect on the Closing Date.
(t) Additional Documents. Prior to the Closing Date, the Company shall have furnished to the
Placement Agents such further information, certificates or documents as the Representatives shall
have reasonably requested.
All opinions, letters, evidence and certificates mentioned above or elsewhere in this
Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form
and substance reasonably satisfactory to counsel for the Placement Agents.
6. Indemnification and Contribution.
(a) Indemnification of the Placement Agents. The Company agrees to indemnify and hold the
Placement Agents harmless against any losses, claims, damages or liabilities, joint or several, to
which the Placement Agents may become subject, under the Securities 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 or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the General Disclosure Package or the Prospectus, or
any amendment or supplement thereto, or in any Issuer Free Writing Prospectus, or in any materials
or information provided to investors by, or with the approval of, the Company in connection with
the marketing of the offering of the Shares (“Marketing Materials”), (ii) 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 (iii) any breach of the representations and warranties of the
Company contained herein, and will reimburse the Placement Agents for any legal or other expenses
reasonably incurred by then in connection with investigating or defending against such loss, claim,
damage, liability or action; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged omission made in the
Registration Statement, the General Disclosure Package or the Prospectus, or any amendment or
supplement thereto, or in any Issuer Free Writing Prospectus, or in any Marketing Materials, in
reliance upon and in conformity with the Placement Agents’ Information.
-21-
In addition to its other obligations under this Section 6(a), the Company agrees that
it will reimburse the Placement Agents for all reasonable legal fees or other expenses incurred in
connection with investigating or defending any such claim, action, investigation, inquiry or other
proceeding, described in this Section 6(a), as such fees and expenses are incurred.
(b) Indemnification of the Company. The Placement Agents, severally but not jointly, will
indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Securities Act or otherwise (including in settlement of
any litigation, if such settlement is effected with the written consent of the Representatives),
insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, the General Disclosure Package, the Prospectus, or any amendment or
supplement thereto, 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, in each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the Registration Statement,
the General Disclosure Package, the Prospectus, or any such amendment or supplement, in reliance
upon and in conformity with written information furnished to the Company by the Placement Agents,
specifically for use in the preparation thereof, and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with investigating or defending
against any such loss, claim, damage, liability or action, it being understood and agreed that the
only such information furnished by the Placement Agents consists of the Placement Agents
Information.
(c) Notice and Procedures. Promptly after receipt by an indemnified party under subsection
(a) or (b) 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; provided, that 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 except to the extent such indemnifying party has been materially
prejudiced by such failure. 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
sole judgment of the indemnified party, it is advisable for the indemnified party to be represented
by separate counsel, the indemnified party shall have the right to employ a separate counsel to
represent it, in which event the reasonable fees and expenses of such separate counsel shall be
borne by the indemnified party or parties except to the extent that (i) the employment thereof has
been specifically authorized by the indemnifying party in writing, (ii) the indemnifying party has
failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in
such action there is, in the reasonable opinion of such separate counsel, a material conflict on
any material issue between the position of the indemnifying party and the position of the
indemnified party, in which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action on behalf of such
indemnified party, it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any time for all such
indemnified parties. An indemnifying party shall not be obligated under any settlement agreement
relating to
-22-
any action under this Section 7 to which it has not agreed in writing. In addition,
no indemnifying party shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding unless such settlement includes an unconditional
release of such indemnified party for all liability on claims that are the subject matter of the
proceeding.
(d) Contribution; Limitation on Liability. If the indemnification provided for in this
Section 6 is unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party, in lieu of indemnifying such indemnified
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) or (b) above, (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company on the one
hand and the Placement Agents 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 Placement Agents 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 benefits
received by the Company on the one hand and the Placement Agents on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before deducting expenses)
received by the Company bears to the total compensation received by the Placement Agents. 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 Placement Agents and the parties’
relevant intent, knowledge, access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Placement Agents agree that they would not be just and
equitable if contributions pursuant to this subsection (d) were to be determined by pro rata
allocation (even if the Placement Agents were treated as one entity for such purpose) 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 (d). The amount paid or payable by an indemnified party
as a result of the losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party (and not reimbursed by the
indemnifying party) in connection with investigating or defending against any action or claim which
is the subject of this subsection (d). Notwithstanding the provisions of this subsection, the
Placement Agents shall not be required to contribute any amount in excess of the total commissions
received by the Placement Agents in accordance with Section 1(b) less the amount of any
damages which the Placement Agent has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement, omission or alleged omission, act or alleged act or failure to
act or alleged failure to act. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Placement Agents’ obligations to
contribute as provided in this Section 6(d) are several in proportion to the total
compensation received by each of the Placement Agents in accordance with Section 1(b) and
not joint.
(e) Non-Exclusive Remedies. The obligations of the Company under this Section 6 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 Placement Agent within the
meaning of the Securities Act; and the Placement Agents’ obligations under this Section 6
shall be in addition to any liability that the Placement Agents may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Company (including any person
who, with his consent, is named in the Registration Statement as about to become a director of the
Company), to each officer of the Company who has signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of the Securities Act.
-23-
7. Representations and Agreements to Survive Delivery. All representations, warranties, and
agreements of the Company herein or in certificates delivered pursuant hereto, and the agreements
of the Placement Agents and the Company contained in Section 6 hereof, shall remain
operative and in full force and effect regardless of any investigation made by or on behalf of the
Placement Agents or any controlling person thereof, or the Company or any of its officers,
directors, or controlling persons and shall survive delivery of, and payment for, the Shares. The
respective agreements, covenants, indemnities and other statements set forth in Sections 4,
6 and 12 hereof shall remain in full force and effect, regardless of any
termination of this Agreement.
8. Information Furnished by Placement Agents. The Company acknowledges that the statements set
forth in (i) the first sentence of the seventh paragraph and (ii) the tenth paragraph, under the
heading “Plan of Distribution” in the Prospectus (the “Placement Agents Information”), constitute
the only information relating to the Placement Agents furnished in writing to the Company by the
Placement Agents as such information is referred to in Sections 2 and 6 hereof.
9. Termination. The Placement Agents shall have the right to terminate this Agreement by
giving notice as hereinafter specified at any time at or prior to the Closing Date, without
liability on the part of the Placement Agents to the Company, if (i) prior to delivery and payment
for the Shares (A) trading in securities generally shall have been suspended on or by the New York
Stock Exchange, the American Stock Exchange, the Nasdaq Global Market (each, a “Trading Market”),
(B) trading in the Common Stock of the Company shall have been suspended on any exchange, in the
over-the-counter market or by the Commission, (C) a general moratorium on commercial banking
activities shall have been declared by federal or New York state authorities or a material
disruption shall have occurred in commercial banking or securities settlement or clearance services
in the United States, (D) there shall have occurred any outbreak or material escalation of
hostilities or acts of terrorism involving the United States or there shall have been a declaration
by the United States of a national emergency or war, or (E) there shall have occurred any other
calamity or crisis or any material change in general economic, political or financial conditions in
the United States or elsewhere, if the effect of any such event specified in clause (D) or (E), in
the judgment of the Representatives, is material and adverse and makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the Shares on the Closing
Date on the terms and in the manner contemplated by this Agreement, the General Disclosure Package
and the Prospectus, (ii) since the time of execution of this Agreement or the earlier respective
dates as of which information is given in the General Disclosure Package or incorporated by
reference therein, there has been any Material Adverse Effect, if the effect of any such event
specified in this clause (ii), in the judgment of the Representatives, makes it impractical or
inadvisable to proceed with the completion of the sale of and payment for the Shares on the Closing
Date on the terms and in the manner contemplated by this Agreement, the General Disclosure Package
and the Prospectus, (iii) the Company shall have failed, refused or been unable to comply with the
terms or perform any agreement or obligation of this Agreement or any Subscription Agreement, other
than by reason of a default by the Placement Agents, or (iv) any condition of the Placement Agents’
obligations hereunder is not fulfilled. Any such termination shall be without liability of any
party to any other party except that the provisions of Section 4, Section 6, and
Section 12 hereof shall at all times be effective notwithstanding such termination.
10. Notices. All statements, requests, notices and agreements hereunder shall be in writing
or by facsimile, and:
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(a) if to the Placement Agents, shall be delivered or sent by mail, telex or facsimile
transmission to the Representatives:
c/o JMP Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile No.: 000-000-0000
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx, Esq.
Facsimile No.: 000-000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxxxxx Xxxxxxx PC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: 000-000-0000
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Facsimile No.: 000-000-0000
(b) if to the Company shall be delivered or sent by mail, telex or facsimile transmission to
Sangamo BioSciences, Inc., 000 Xxxxx Xxxxxxxxx, Xxxxx X000, Xxxxxxxx, Xxxxxxxxxx 00000.
Attention: Xxxx X. Zante, (Fax: 000-000-0000), with a copy (which shall not constitute
notice) to: Xxxxxx, Xxxxx & Bockius LLP, Xxx Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxx Xxxxxx, Esq., (Fax: 000-000-0000).
11. Persons Entitled to Benefit of Agreement. This Agreement shall inure to the benefit of
and shall be binding upon the Placement Agents, the Company, and their respective successors and
assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to
give any person other than the persons mentioned in the preceding sentence any legal or equitable
right, remedy or claim under or in respect of this Agreement, or any provisions herein contained,
this Agreement and all conditions and provisions hereof being intended to be and being for the sole
and exclusive benefit of such persons and for the benefit of no other person, except that (i) the
representations, warranties, covenants, agreements and indemnities of the Company contained in this
Agreement shall also be for the benefit of the controlling persons, officers and directors referred
to in Section 6(a) and the indemnities of the Placement Agents shall also be for the
benefit of the controlling persons, officers and directors referred to in Section 6(a) and
(ii) the Investors are relying on the representations made by the Company under, and are intended
third party beneficiaries of, this Agreement. The term “successors and assigns” as herein used
shall not include any purchaser of the Shares by reason merely of such purchase.
12. Governing Law; Submission to Jurisdiction. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without giving effect to the
conflicts of laws provisions thereof. Except as set forth below, no proceeding may be commenced,
prosecuted or continued in any court other than the courts of the State of New York located in the
City and County of New York or in the United States District Court for the Southern District of New
York, which courts shall have jurisdiction over the adjudication of such matters, and the Company
hereby consents to the jurisdiction of such courts and personal service with respect thereto. The
Company hereby consents to personal jurisdiction, service and venue in any court in which any
proceeding arising out of or in any way relating to this Agreement is brought by any third party
against the Placement Agents. The Company hereby waives all right to trial by jury in any
proceeding (whether based upon contract, tort or otherwise) in any way arising out of or relating
to this Agreement. The Company agrees that a final judgment in any such Proceeding brought in any
such court shall be conclusive and binding upon the Company and may
-25-
be enforced in any other courts in the jurisdiction of which the Company is or may be subject,
by suit upon such judgment.
13. No Fiduciary Relationship. The Company hereby acknowledges and agrees that:
(a) No Other Relationship. The Placement Agents have been retained solely to act as placement
agents in connection with the Offering of the Company’s securities. The Company further
acknowledges that the Placement Agents are acting pursuant to a contractual relationship created
solely by this Agreement and entered into on an arm’s length basis and in no event do the parties
intend that the Placement Agents act or be responsible as a fiduciary to the Company, its
management, stockholders, creditors or any other person in connection with any activity that the
Placement Agents may undertake or have undertaken in furtherance of the Offering of the Company’s
securities, either before or after the date hereof. The Placement Agents hereby expressly disclaim
any fiduciary or similar obligations to the Company, either in connection with the transactions
contemplated by this Agreement or any matters leading up to such transactions, and the Company
hereby confirms its understanding and agreement to that effect.
(b) Absence of Obligation to Disclose. The Company has been advised that the Placement Agents
and their affiliates are engaged in a broad range of transactions which may involve interests that
differ from those of the Company and that the Placement Agents have no obligation to disclose such
interests and transactions to the Company by virtue of any fiduciary, advisory or agency
relationship.
(c) Waiver. The Company hereby waives and releases, to the fullest extent permitted by law,
any claims that the Company may have against the Placement Agents with respect to any breach or
alleged breach of any fiduciary or similar duty to the Company in connection with the transactions
contemplated by this Agreement and agrees that the Placement Agents shall have no liability
(whether direct or indirect) to the Company in respect of such a fiduciary duty claim to any person
asserting a fiduciary duty claim on behalf of the Company, including stockholders, employees or
creditors of the Company.
14. Headings. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
15. Amendments and Waivers. No supplement, modification or waiver of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. The failure of a party to
exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in
the future. No waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any
such waiver constitute a continuing waiver unless otherwise expressly provided.
16. Counterparts. This Agreement may be executed in one or more counterparts and, if executed
in more than one counterpart, the executed counterparts shall each be deemed to be an original and
all such counterparts shall together constitute one and the same instrument. Delivery of an
executed counterpart by facsimile shall be effective as delivery of a manually executed counterpart
thereof.
17. Research Analyst Independence. The Company acknowledges that the Placement Agents’
research analysts and research departments are required to be independent from their respective
investment banking divisions and are subject to certain regulations and internal policies, and that
such Placement Agents’ research analysts may hold views and make statements or investment
recommendations and/or publish research reports with respect to the Company and/or the Offering
that
-26-
differ from the views of their respective investment banking divisions. The Company hereby
waives and releases, to the fullest extent permitted by law, any claims that the Company may have
against the Placement Agents with respect to any conflict of interest that may arise from the fact
that the views expressed by their independent research analysts and research departments may be
different from or inconsistent with the views or advice communicated to the Company by such
Placement Agents’ investment banking divisions. The Company acknowledges that each of the Placement
Agents is a full service securities firm and as such from time to time, subject to applicable
securities laws, rules and regulations, may effect transactions for its own account or the account
of its customers and hold long or short positions in debt or equity securities of the Company;
provided, however, that nothing in this Section 17 shall relieve the Placement Agents of
any responsibility or liability they may otherwise bear in connection with activities in violation
of applicable securities laws, rules and regulations.
18. Entire Agreement. This Agreement constitutes the entire agreement of the parties to this
Agreement and supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof.
19. Partial Unenforceability. The invalidity or unenforceability of any section, paragraph,
clause or provision of this Agreement shall not affect the validity or enforceability of any other
section, paragraph, clause or provision hereof. If any section, paragraph, clause or provision of
this Agreement is for any reason determined to be invalid or unenforceable, there shall be deemed
to be made such minor changes (and only such minor changes) as are necessary to make it valid and
enforceable.
20. Effectiveness. This Agreement shall become effective upon the execution and delivery
hereof by the parties hereto.
[Signature Page Follows]
-27-
If the foregoing is in accordance with your understanding of the agreement between the Company
and the Placement Agents, kindly indicate your acceptance in the space provided for that purpose
below.
| Very truly yours, SANGAMO BIOSCIENCES, INC. |
||||
| By: | /s/ Xxxx X. Zante | |||
| Name: Xxxx X. Zante | ||||
| Title: Vice President, Finance & Administration | ||||
Accepted as of
the date first above written:
the date first above written:
| JMP SECURITIES LLC | ||||
By: |
/s/ Xxxxxxx Xxxxx | |||
| Title: Managing Director | ||||
| XXXXX XXXXXXX & CO. | ||||
By: |
/s/ Xxxxx X. Xxxxxxxxx | |||
| Title: Managing Director | ||||
| LEERINK XXXXX & COMPANY | ||||
By: |
/s/ Xxxxxx Xxxxxx | |||
| Title: Managing Director, Equity Capital Markets | ||||
| XXXXXX XXXXXXXXXX XXXXX LLC | ||||
By: |
/s/ Xxxxx X. XxXxxxxxxx | |||
| Title: Vice President | ||||
Schedules and Exhibits
Schedule I:
|
Placement Agents | |
Schedule II:
|
Subsidiaries | |
Schedule III
|
Permitted Free Writing Prospectuses | |
Exhibit A:
|
Form of Subscription Agreement | |
Exhibit B:
|
Form of Lock-Up Agreement | |
Exhibit C:
|
List of Directors, Executive Officers and Stockholders Executing Lock-Up Agreements | |
Exhibit D:
|
Pricing Information |
Schedule I
Placement Agents
JMP Securities LLC
Xxxxx Xxxxxxx & Co.
Leerink Xxxxx & Company
Xxxxxx Xxxxxxxxxx Xxxxx LLC
Schedule II
Subsidiaries
| Name | Percent Owned | Jurisdiction of Incorporation | ||
Gendaq Limited |
100% | United Kingdom |
Schedule III
Permitted Free Writing Prospectus
None.
Exhibit A
Form of Subscription Agreement
Exhibit B
Form of Lock-Up Agreement
JMP SECURITIES LLC
XXXXX XXXXXXX & CO.
XXXXX XXXXXXX & CO.
As Representatives of the several Placement Agents
set forth on Schedule I hereto
set forth on Schedule I hereto
c/o JMP Securities LLC
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Ladies and Gentlemen:
The undersigned understands that you propose to enter into a Placement Agency Agreement (the
“Placement Agency Agreement”) with Sangamo BioSciences, Inc., a Delaware corporation (the
“Company”), providing for the offering (the “Offering”) of shares (the “Shares”) of common stock,
par value $0.01 per share (the “Common Stock”), of the Company pursuant to a registration statement
on Form S-3 (File No. 333-142425) filed by the Company. Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Placement Agency Agreement.
In consideration of the foregoing, and in order to induce you to act as placement agents in
the offering, and for other good and valuable consideration receipt of which is hereby
acknowledged, the undersigned hereby agrees that, without your prior written consent (which consent
may be withheld in your sole discretion), the undersigned will not, during the period (the “Lock-Up
Period”) beginning on the date hereof and ending on the date 90 days after the date of the final
prospectus (including the final prospectus supplement) to be used in confirming the sale of the
Shares (the “Final Prospectus”), (1) offer, pledge, announce the intention to sell, sell, contract
to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock (including without limitation, Common Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission and securities which may be issued upon exercise of a stock
option or warrant), or (2) enter into any swap or other agreement that transfers, in whole or in
part, any of the economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or
such other securities, in cash or otherwise. In addition, the undersigned agrees that, without
your prior written consent (which consent may be withheld in your sole discretion), it will not,
during the period ending 90 days after the date of such Final Prospectus, make any demand for or
exercise any right with respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
Notwithstanding the foregoing, the restrictions set forth in clause (1) and (2) above shall
not apply to (a) transfers (i) as a bona fide gift or gifts, provided that the donee or donees
thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for
the direct or indirect benefit of the undersigned or the immediate family of the undersigned,
provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth
herein, and provided further that any such transfer shall not involve a disposition for value,
(iii) with your prior written consent or (iv) effected pursuant to any exchange of “underwater”
options with the Company, (b) the acquisition or exercise of any stock option
issued pursuant to the Company’s existing stock option plan, including any exercise effected
by the delivery of Shares of the Company held by the undersigned, or (c) the purchase or sale of
the Company’s securities pursuant to a plan, contract or instruction that satisfies all of the
requirements of Rule 10b5-1(c)(1)(i)(B) that was in effect prior to the date hereof. For purposes
of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or
adoption, not more remote than first cousin. None of the restrictions set forth in this Lock-Up
Agreement shall apply to Common Stock acquired in open market transactions.
For the purpose of allowing you to comply with NASD Rule 2711(f)(4), if (1) during the last 17
days of the Lock-Up Period, the Company releases earnings results or publicly announces other
material news or a material event relating to the Company occurs or (2) prior to the expiration of
the Lock-Up Period, the Company announces that it will release earnings results during the 16 day
period beginning on the last day of the Lock-Up Period, then in each case the Lock-Up Period will
be extended until the expiration of the 18 day period beginning on the date of release of the
earnings results or the public announcement regarding the material news or the occurrence of the
material event, as applicable, unless you waive, in writing, such extension. The undersigned
hereby acknowledges that the Company has agreed not to accelerate the vesting of any option or
warrant or the lapse of any repurchase right prior to the expiration of the Lock-Up Period. In
furtherance of the foregoing, the Company, and any duly appointed transfer agent for the
registration or transfer of the securities described herein, are hereby authorized to decline to
make any transfer of securities if such transfer would constitute a violation or breach of this
Lock-Up Agreement.
The foregoing restrictions are expressly agreed to preclude the undersigned from engaging in
any hedging or other transaction which is designed to or reasonably expected to lead to or result
in a sale or disposition of the Common Stock even if such Common Stock would be disposed of by
someone other than the undersigned. Such prohibited hedging or other transactions would include
without limitation any short sale or any purchase, sale or grant of any right (including without
limitation any put option or put equivalent position or call option or call equivalent position)
with respect to any of the Common Stock or with respect to any security that includes, relates to,
or derives any significant part of its value from such Common Stock.
The undersigned hereby represents and warrants that the undersigned has full power and
authority to enter into this Lock-Up Agreement. All authority herein conferred or agreed to be
conferred and any obligations of the undersigned shall be binding upon the successors, assigns,
heirs or personal representatives of the undersigned.
The undersigned also agrees and consents to the entry of stop transfer instructions with the
Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Common
Stock except in compliance with the foregoing restrictions.
The undersigned understands that, if the Placement Agency Agreement does not become effective,
or if the Placement Agency Agreement (other than the provisions thereof which survive termination)
shall terminate or be terminated prior to payment for and delivery of the Shares to be sold
thereunder, the undersigned shall be released from all obligations under this Lock-Up Agreement.
This Lock-Up Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without regard to the conflict of laws principles thereof.
| Very truly yours, | ||||
Exhibit C
List of Directors and Executive Officers Executing Lock-Up Agreements
Xxxxxx X. Xxxxxxxx XX
Xxxxxxx X. Xxxxxx, M.D.
H. Xxxx Xxxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxx
Xxxx X. Xxxx
Xxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxx, M.D.
Xxxxxx X. Xxxxx, Ph.D.
Xxxxxxx X. Zante
Xxxxxx Xxxxxxx
Xxxxxxx X. Xxxxxx, M.D.
H. Xxxx Xxxxx
Xxxx X. Xxxxxx
Xxxxxxx X. Xxxx
Xxxx X. Xxxx
Xxxxx X. Xxxxxxxx
Xxxxxxxx X. Xxx, M.D.
Xxxxxx X. Xxxxx, Ph.D.
Xxxxxxx X. Zante
Xxxxxx Xxxxxxx
Exhibit D
Pricing Information
Number of
Shares to be Issued: 3,278,689
Offering Price: $9.15 per Share
Placement Agency Fee: 6.0% of the gross proceeds to the Company from the sale of the Shares
Estimated Net Proceeds to the Company (exclusive of estimated expenses of the Company):
$28,200,004.09
