CONFIDENTIAL Dennis Turpin Vice President and Chief Financial Officer Æterna Zentaris Inc. 1405 du Parc-Technologique Blvd. Québec, Québec Canada G1P 4P5 Dear Mr. Turpin:
Exhibit 99.2
June 15, 2010
CONFIDENTIAL
Xxxxxx Xxxxxx
Vice President and Chief Financial Officer
Æterna Zentaris Inc.
0000 xx Xxxx-Xxxxxxxxxxxxx Xxxx.
Québec, Québec
Canada
G1P 4P5
Vice President and Chief Financial Officer
Æterna Zentaris Inc.
0000 xx Xxxx-Xxxxxxxxxxxxx Xxxx.
Québec, Québec
Canada
G1P 4P5
Dear Xx. Xxxxxx:
This letter (the “Agreement”) constitutes the agreement between Xxxxxx & Xxxxxxx, LLC
(“Xxxxxx” or the “Placement Agent”) and Æterna Zentaris Inc. (the
“Company”), that Xxxxxx shall serve as the exclusive placement agent for the Company, on a
“reasonable best efforts” basis, in connection with the proposed placement (the
“Placement”) of registered securities (the “Securities”) of the Company, including
units comprised of common shares in the share capital of the Company (the “Common Shares”)
and warrants to purchase Common Shares. For greater certainty, the term “Securities” includes the
Xxxxxx Warrants (as defined below) and the Common Shares issuable upon exercise thereof. The terms
of such Placement and the Securities shall be mutually agreed upon by the Company and the
purchasers (each, a “Purchaser” and collectively, the “Purchasers”) and nothing
herein constitutes that Xxxxxx would have the power or authority to bind the Company or any
Purchaser or an obligation for the Company to issue any Securities or complete the Placement. This
Agreement and the documents executed and delivered by the Company and the Purchasers in connection
with the Placement shall be collectively referred to herein as the “Transaction Documents.”
The date of the closing of the Placement shall be referred to herein as the “Closing Date.”
The Company expressly acknowledges and agrees that Xxxxxx’x obligations hereunder are on a
reasonable best efforts basis only and that the execution of this Agreement does not constitute a
commitment by Xxxxxx to purchase the Securities and does not ensure the successful placement of the
Securities or any portion thereof or the success of Xxxxxx with respect to securing any other
financing on behalf of the Company.
SECTION 1. COMPENSATION AND OTHER FEES.
(A) As compensation for the services provided by Xxxxxx xxxxxxxxx, the Company agrees to pay
to Xxxxxx x xxxx fee payable immediately upon the closing of the Placement and equal to 5.0% of the
aggregate gross proceeds raised in the Placement.
(B) Such number of warrants (the “Xxxxxx Warrants”) to Xxxxxx or its designees at the
Closing to purchase shares of Common Shares equal to 2.0% of the aggregate number of Shares sold in
the Placement (or if convertible Securities are issued and paid for on the Closing Date, based on
the number of shares of Common Shares underlying such convertible Securities) The Xxxxxx Warrants
shall have the same terms as the warrants (if any) issued to the Purchasers in the Placement except
that the exercise price shall be 125% of the public offering price per share and the expiration
date shall be five years from the effective date of the shelf registration statement referred to in
Section 2(A) below. The Xxxxxx Warrants shall not be transferable for six months from the date of
the Placement except as
permitted by FINRA Rule 5110, and further, the number of Shares underlying the Xxxxxx Warrants
shall be reduced if necessary to comply with FINRA rules or regulations.
(C) The Company also agrees to reimburse Xxxxxx’x expenses (with supporting invoices/receipts)
up to a maximum of 0.8% of the aggregate gross proceeds raised in the Placement (provided, however,
that such expense cap in no way limits or impairs the indemnification and contribution provisions
of this Agreement), but in no event more than $30,000. Such reimbursement shall be payable
immediately upon (but only in the event of) the closing of the Placement, provided,
however, the Company shall have received all supporting invoices/receipts.
SECTION 2. REGISTRATION STATEMENT.
The Company represents and warrants to, and agrees with, the Placement Agent that:
(A) The Company has filed with the United States Securities and Exchange Commission (the
“Commission”) a registration statement on Form F-3 (Registration File No. 333-165037) under
the United States Securities Act of 1933, as amended (the “Securities Act”), which became
effective on March 16, 2010 for the registration under the Securities Act of Common Shares and
warrants to purchase Common Shares. At the time of the filing of the registration statement, the
Company met the requirements of Form F-3 under the Securities Act. Such registration statement
meets the requirements set forth in Rule 415(a)(1)(x) under the Securities Act and complies with
said Rule. The Company will file with the Commission pursuant to Rule 424(b) under the Securities
Act, and the rules and regulations (the “Rules and Regulations”) of the Commission
promulgated thereunder, a supplement to the form of prospectus included in such registration
statement relating to the placement of the Securities and the plan of distribution thereof and has
advised the Placement Agent of all further information (financial and other) with respect to the
Company required to be set forth therein. Such registration statement, including the exhibits
thereto, as amended at the date of this Agreement, is hereinafter called the “Registration
Statement”; such prospectus in the form in which it appears in the Registration Statement is
hereinafter called the “Base Prospectus”; and the supplemented form of prospectus, in the
form in which it will be filed with the Commission pursuant to Rule 424(b) (including the Base
Prospectus as so supplemented) is hereinafter called the “Prospectus Supplement.” Any
reference in this Agreement to the Registration Statement, the Base Prospectus or the Prospectus
Supplement shall be deemed to refer to and include the documents incorporated by reference therein
(the “Incorporated Documents”) pursuant to Item 12 of Form F-3 which were filed under the
United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), on or
before the date of this Agreement, or the filing date of the Base Prospectus or the Prospectus
Supplement, as the case may be; and any reference in this Agreement to the terms “amend,”
“amendment” or “supplement” with respect to the Registration Statement, the Base Prospectus or the
Prospectus Supplement shall be deemed to refer to and include the filing of any document under the
Exchange Act after the date of this Agreement, or the filing date of the Base Prospectus or the
Prospectus Supplement, as the case may be, deemed to be incorporated therein by reference.
Incorporated Documents shall be deemed to include all financial statements and schedules, exhibits
and other information which is or is deemed to be incorporated by reference therein. All
references in this Agreement to financial statements and schedules and other information which is
“contained,” “included,” “described,” “referenced,” “set forth” or “stated” in the Registration
Statement, the Base Prospectus or the Prospectus Supplement (and all other references of like
import) shall be deemed to mean and include all such financial statements and schedules and other
information which is or is deemed to be incorporated by reference in the Registration Statement,
the Base Prospectus or the Prospectus Supplement, as the case may be. No stop order suspending the
effectiveness of the Registration Statement or the use of the Base Prospectus or the Prospectus
Supplement has been issued, and no proceeding for any such purpose is pending or has been initiated
or, to the Company’s knowledge, is threatened by the Commission. For the purpose of this Agreement,
“free writing prospectus” has the meaning set forth in Rule 405 under the Securities Act.
(B) The Registration Statement (and any further documents to be filed with the Commission)
contains all exhibits and schedules as required by the Securities Act. Each of the Registration
Statement and any post-effective amendment thereto, at the time it became effective, complied in
all material respects with the Securities Act and the Exchange Act and the applicable Rules and
Regulations and did not and, as amended or supplemented, if applicable, will 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. The Base Prospectus and the Prospectus
Supplement, each as of its respective date, comply in all material respects with the Securities Act
and the Exchange Act and the applicable Rules and Regulations. Each of the Base Prospectus and the
Prospectus Supplement, as amended or supplemented, did not and will not contain as of the date
thereof any untrue statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in light of the circumstances under which they were made, not
misleading. The Incorporated Documents, when they were filed with or furnished to the Commission,
conformed in all material respects to the applicable requirements of the Exchange Act and the
applicable Canadian securities laws, rules and regulations, and none of such documents, when they
were filed in accordance with applicable Rules and Regulations, contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the statements therein (with
respect to Incorporated Documents incorporated by reference in the Base Prospectus or Prospectus
Supplement), in light of the circumstances under which they were made not misleading; and any
further documents so filed and incorporated by reference in the Base Prospectus or Prospectus
Supplement, when such documents are filed with or furnished to the Commission, will conform in all
material respects to the applicable requirements of the Exchange Act and applicable Rules and
Regulations and will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the circumstances under which
they were made, not misleading. No post-effective amendment to the Registration Statement
reflecting any facts or events arising after the date thereof which represent, individually or in
the aggregate, a fundamental change in the information set forth therein is required to be filed
with or furnished to the Commission. There are no documents required to be filed with or furnished
to the Commission in connection with the transaction contemplated hereby that (x) have not been
filed with or furnished to the Commission as required pursuant to the Securities Act or (y) will
not be filed within the requisite time period. There are no contracts or other documents required
to be described in the Base Prospectus or Prospectus Supplement, or to be filed as exhibits or
schedules to the Registration Statement, which have not been described or filed as required.
(C) The Company is eligible to use free writing prospectuses in connection with the Placement
pursuant to Rules 164 and 433 under the Securities Act. Any free writing prospectus that the
Company is required to file pursuant to Rule 433(d) under the Securities Act will be filed with the
Commission in accordance with the requirements of the Securities Act and the applicable rules and
regulations of the Commission thereunder. Each free writing prospectus that the Company is required
to file, pursuant to Rule 433(d) under the Securities Act prepared by or behalf of or used by the
Company will comply in all material respects with the requirements of the Securities Act and the
applicable rules and regulations of the Commission thereunder. The Company will not, without the
prior consent of the Placement Agent, prepare, use or refer to, any free writing prospectus.
(D) The Company will as promptly as practicable deliver to the Placement Agent complete
conformed copies of the Registration Statement and of each consent and certificate of experts, as
applicable, filed as a part thereof, and conformed copies of the Registration Statement (without
exhibits), the Base Prospectus and the Prospectus Supplement, as amended or supplemented, in such
quantities and at such places as the Placement Agent reasonably requests. Neither the Company nor
any of its directors and officers has distributed and none of them will distribute, prior to the
Closing Date, any offering material in connection with the offering and sale of the Securities
other than the Base Prospectus, the Prospectus Supplement, the Registration Statement, copies of
the documents incorporated by reference therein and any other materials permitted by the Securities
Act.
SECTION 3. REPRESENTATIONS AND WARRANTIES. Except as set forth under the
corresponding section of the Disclosure Schedules which Disclosure Schedules shall be deemed to
form a part hereof, the Company hereby makes the representations and warranties set forth below to
the Placement Agent.
(A) Organization and Qualification. All of the direct and indirect subsidiaries
(individually, a “Subsidiary”) of the Company are described in the Base Prospectus and
Prospectus Supplement. Except as described in the Base Prospectus and the Prospectus Supplement,
the Company owns, directly or indirectly, all of the capital stock or other equity interests of
each Subsidiary free and clear of any “Liens” (which for purposes of this Agreement shall
mean a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or
other restriction), and all the issued and outstanding shares of capital stock of each Subsidiary
are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to
subscribe for or purchase securities. The Company and each of the Subsidiaries is an entity duly
incorporated or otherwise organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business as currently
conducted. Neither the Company nor any Subsidiary is in violation or default of any of the
provisions of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to
conduct business and is in good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good standing, as the
case may be, would not have or reasonably be expected to result in (i) a material adverse effect on
the legality, validity or enforceability of any Transaction Document, (ii) a material adverse
effect on the results of operations, assets, business or condition (financial or otherwise) of the
Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations under any Transaction
Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no
“Proceeding” (which for purposes of this Agreement shall mean any action, claim, suit,
investigation or proceeding (including, without limitation, an investigation or partial proceeding,
such as a deposition), whether commenced or threatened) has been instituted in any such
jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and
authority or qualification.
(B) Authorization; Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated by each of the Transaction
Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and
delivery of each of the Transaction Documents by the Company and the consummation by it of the
transactions contemplated thereby have been duly authorized by all necessary action on the part of
the Company and no further action is required by the Company, its board of directors or its
shareholders in connection therewith other than in connection with the “Required Approvals”
(as defined in subsection 3(D) below). Each Transaction Document has been (or upon delivery will
have been) duly executed by the Company and, when delivered in accordance with the terms hereof and
thereof, will constitute the valid and binding obligation of the Company enforceable against the
Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of
creditors’ rights generally and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies.
(C) No Conflicts. The execution, delivery and performance of the Transaction Documents
by the Company, the issuance and sale of the Securities and the consummation by the Company of the
other transactions contemplated hereby and thereby do not and will not (i) conflict with or violate
any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws
or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under, result in the
creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give
to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other
understanding to which the Company or any Subsidiary is a party or by which any property or asset
of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals,
conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws and regulations), or by which
any property or asset of the Company or a Subsidiary is bound or affected; except in the case of
each of clauses (ii) and (iii), such as would not reasonably be expected to result in a Material
Adverse Effect.
(D) Filings, Consents and Approvals. The Company is not required to obtain any
consent, waiver, authorization or order of, give any notice to, or make any filing or registration
with, any court or other federal, state, local or other governmental authority or other
“Person” (defined as an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint stock company,
government (or an agency or subdivision thereof) or other entity of any kind, including, without
limitation, any Trading Market (as defined below)) in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other than such filings as are required to
be made under applicable US and Canadian securities laws, including acceptance of listing by and
notification to the Toronto Stock Exchange and the NASDAQ Global Market (collectively, the
“Required Approvals”).
(E) Issuance of the Securities; Registration. The Securities are duly authorized and,
when issued and paid for in accordance with the applicable Transaction Documents, will be duly and
validly issued, fully paid and non-assessable, free and clear of all Liens imposed by the Company
other than restrictions on transfer provided for in the Transaction Documents. The Company’s
Restated Articles of Incorporation do not limit the number of Common Shares that the Company may
issue. All of the Securities will be freely transferable and tradable by the Purchasers without
restriction (other than any restrictions arising solely from an act or omission of a Purchaser).
The Securities are being issued pursuant to the Registration Statement and the issuance of the
Securities has been registered by the Company under the Securities Act. The Registration Statement
is effective and available for the issuance of the Securities thereunder and the Company has not
received any notice that the Commission has issued or intends to issue a stop-order with respect to
the Registration Statement or that the Commission otherwise has suspended or withdrawn the
effectiveness of the Registration Statement, either temporarily or permanently, or intends or has
threatened in writing to do so. The “Plan of Distribution” section under the Registration Statement
permits the issuance and sale of the Securities hereunder. Upon receipt of the Securities, the
Purchasers will have good and marketable title to such Securities and, as of the Closing Date, the
Common Shares will be freely tradable on the “Trading Market” (which, for purposes of this
Agreement shall mean the following markets or exchanges on which the Common Shares are listed or
quoted for trading on the date in question: the Toronto Stock Exchange and the Nasdaq Global
Market).
(F) Capitalization. The share capital of the Company is described in the Prospectus
Supplement. Except as disclosed and described in the SEC Reports, the Company has not issued any
Common Shares since its most recently filed periodic report under the Exchange Act, other than
pursuant to the exercise of employee stock options under the Company’s stock option plan
(“Common Share Equivalents”) or outstanding warrants to purchase Common Shares. No Person
has any right of first refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by the Transaction Documents. Except as a result of
the purchase and sale of the Securities and for options outstanding under the Company’s stock
option plan and as disclosed in the Prospectus Supplement, there are no outstanding options,
warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or
giving any Person any right to subscribe for or acquire, any Common Shares, or contracts,
commitments, understandings or arrangements by which the Company or any Subsidiary is or may become
bound to issue additional Common
Shares or Common Share Equivalents. The issuance and sale of the Securities will not obligate
the Company to issue Common Shares or other securities to any Person (other than the Purchasers)
and will not result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities. All of the outstanding shares in the
share capital of the Company are validly issued, fully paid and non-assessable, have been issued in
compliance with all U.S. and Canadian securities laws, and none of such outstanding shares was
issued in violation of any preemptive rights or similar rights to subscribe for or purchase
securities. Other than the Required Approvals, no further approval or authorization of any third
party is required for the issuance and sale of the Securities. There are no shareholders
agreements, voting agreements or other similar agreements with respect to the Common Shares to
which the Company is a party.
(G) SEC Reports; Financial Statements. The Company has complied in all material
respects with requirements to file all reports, schedules, forms, statements and other documents
required to be filed by it under the Securities Act and the Exchange Act, including pursuant to
Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period
as the Company was required by law to file or furnish such material) (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein, being collectively
referred to herein as the “SEC Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed or furnished any such SEC Reports prior to the
expiration of any such extension. As of their respective dates, the SEC Reports complied in all
material respects with the applicable requirements of the Securities Act and the Exchange Act and
the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports,
when filed with or furnished to the Commission, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading.
The financial statements of the Company included in the SEC Reports comply in all material respects
with applicable accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements have been prepared in
accordance with Canadian generally accepted accounting principles applied on a consistent basis
during the periods involved (“GAAP”), except as may be otherwise specified in such
financial statements or the notes thereto and except that unaudited financial statements may not
contain all footnotes required by GAAP, and fairly present in all material respects the financial
position of the Company and its consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended, subject, in the case of unaudited
statements, to normal, immaterial, year-end audit adjustments
(H) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date
of the latest audited financial statements included within the SEC Reports, except as specifically
disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had
or that would reasonably be expected to result in a Material Adverse Effect, (ii) the Company has
not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B)
liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or
required to be disclosed in filings made with the Commission, (iii) the Company has not altered its
method of accounting, (iv) the Company has not declared or made any dividend or distribution of
cash or other property to its shareholders or purchased, redeemed or made any agreements to
purchase or redeem any Common Shares and (v) the Company has not issued any equity securities to
any officer, director or “Affiliate” (defined as any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144 under the Securities Act), except
pursuant to the Company’s existing stock option plan. The Company does not have pending before the
Commission any request for confidential treatment of information. Except for the issuance of the
Securities contemplated by this Agreement or as set forth on Schedule 3(H), no event, liability or
development has occurred or exists with respect to the Company or its Subsidiaries or their
respective business, properties, operations or financial condition, that would be required to be
disclosed by the Company under applicable securities laws at the time
this representation is made that has not been publicly disclosed at least 1 Trading Day prior
to the date that this representation is made.
(I) Litigation. There is no action, suit, inquiry, notice of violation, Proceeding or
investigation pending or, to the knowledge of the Company, threatened against or affecting the
Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or
foreign) (collectively, an “Action”) which (i) adversely affects or challenges the
legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii)
would, if there were an unfavorable decision, have or reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer
thereof, is or has been the subject of any Action involving a claim of violation of or liability
under federal or state securities laws or a claim of breach of fiduciary duty. There has not been,
and to the knowledge of the Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending the effectiveness of any
registration statement filed by the Company or any Subsidiary under the Exchange Act or the
Securities Act. Except as described in the Base Prospectus or Prospectus Supplement, none of the
Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s
relationship with the Company, and neither the Company or any of its Subsidiaries is a party to a
collective bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good. No executive officer, to the knowledge of the Company,
is, or is now expected to be, in violation of any material term of any employment contract,
confidentiality, disclosure or proprietary information agreement or non-competition agreement, or
any other contract or agreement or any restrictive covenant, and the continued employment of each
such executive officer does not subject the Company or any of its Subsidiaries to any liability
with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance
with all U.S. federal, state, local and foreign laws and regulations relating to employment and
employment practices, terms and conditions of employment and wages and hours, except where the
failure to be in compliance would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(J) Labor Relations. No material labor dispute exists or, to the knowledge of the
Company, is imminent with respect to any of the employees of the Company which would reasonably be
expected to result in a Material Adverse Effect.
(K) Compliance. Neither the Company nor any Subsidiary (i) is in default under or in
violation of (and no event has occurred that has not been waived that, with notice or lapse of time
or both, would result in a default by the Company or any Subsidiary under), nor has the Company or
any Subsidiary received notice of a claim that it is in default under or that it is in violation
of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or not such default or violation
has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body,
or (iii) is or has been in violation of any statute, rule or regulation of any governmental
authority, including without limitation all foreign, federal, state and local laws applicable to
its business and all such laws that affect the environment, except in each case as would not
reasonably be expected to have a Material Adverse Effect.
(L) Regulatory Permits. The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described in the SEC Reports,
except where the failure to possess such permits would not reasonably be expected to result in a
Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary
has received any notice of proceedings relating to the revocation or modification of any Material
Permit.
(M) Title to Assets. The Company and the Subsidiaries do not own any real property.
Except as described in the Base Prospectus and Prospectus Supplement, the Company and the
Subsidiaries have good and marketable title in all personal property owned by them that is material
to the business of the Company and the Subsidiaries, in each case free and clear of all Liens,
except for Liens as do not 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 and Liens for the payment of federal, state or other taxes, the payment of which is
neither delinquent nor subject to penalties. Any real property and facilities held under lease by
the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases of
which the Company and the Subsidiaries are in compliance, except where the failure to be in
compliance would not reasonably be expected to have a Material Adverse Effect.
(N) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to
use, all patents, patent applications, trademarks, trademark applications, service marks, trade
names, trade secrets, inventions, copyrights, licenses and other similar intellectual property
rights necessary or material for use in connection with their respective businesses as described in
the SEC Reports and which the failure to so have would reasonably be expected to have a Material
Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company nor
any Subsidiary has received a notice (written or otherwise) that the Intellectual Property Rights
used by the Company or any Subsidiary violates or infringes upon the rights of any Person. To the
knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no
existing infringement by another Person of any of the Intellectual Property Rights of others. The
Company and its Subsidiaries have taken reasonable security measures to protect the secrecy and
confidentiality of all of their intellectual properties, except where failure to do so would not,
individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(O) Insurance. The Company and the Subsidiaries are insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as are prudent and
customary in the businesses in which the Company and the Subsidiaries are engaged, including, but
not limited to, directors and officers insurance coverage at least equal to the aggregate
subscription amount under the Transaction Documents. To the knowledge of the Company, such
insurance contracts and policies are accurate and complete. 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 without a significant increase in cost.
(P) Transactions With Affiliates and Employees. Except as set forth in the SEC
Reports, none of the officers or directors of the Company and, to the knowledge of the Company,
none of the employees of the Company is presently a party to any transaction with the Company or
any Subsidiary (other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise requiring payments to or
from any officer, director or such employee or, to the knowledge of the Company, any entity in
which any officer, director, or any such employee has a substantial interest or is an officer,
director, trustee or partner, other than (i) for payment of salary or consulting fees for services
rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other
employee benefits, including stock option agreements under any stock option plan of the Company.
(Q) Xxxxxxxx-Xxxxx. The Company is in material compliance with all provisions of the
Xxxxxxxx-Xxxxx Act of 2002 which are applicable to it as of the date hereof and of the closing date
of the Placement.
(R) Certain Fees. Except as otherwise provided in this Agreement, no brokerage or
finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor
or consultant, finder, placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation
with respect to any fees or with respect
to any claims made by or on behalf of other Persons for fees of a type contemplated in this
Section that may be due in connection with the transactions contemplated by the Transaction
Documents.
(S) Trading Market Rules. Subject to acceptance of the notice of the Placement by the
Toronto Stock Exchange and the NASDAQ Global Market, the issuance and sale of the Securities
hereunder does not contravene the rules and regulations of the Trading Market.
(T) Investment Company. The Company is not, and is not an Affiliate of, and
immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an
“investment company” within the meaning of the Investment Company Act of 1940, as amended. The
Company shall conduct its business in a manner so that it will not become subject to the Investment
Company Act.
(U) Registration Rights. No Person has any right to cause the Company to effect the
registration under the Securities Act of any securities of the Company.
(V) Listing and Maintenance Requirements. The Company’s Common Shares are registered
pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action
designed to, or which to its knowledge is likely to have the effect of, terminating the
registration of the Common Shares under the Exchange Act nor has the Company received any
notification that the Commission is contemplating terminating such registration. Except as publicly
disclosed by the Company, the Company has not, in the 12 months preceding the date hereof, received
notice from any Trading Market on which the Common Shares are listed or quoted to the effect that
the Company is not in compliance with the listing or maintenance requirements of such Trading
Market. Except publicly disclosed by the Company, the Company is, and has no reason to believe that
it will not in the foreseeable future continue to be, in compliance with all such listing and
maintenance requirements.
(X) Solvency. The Company does not intend to incur debts beyond its ability to pay
such debts as they mature (taking into account the timing and amounts of cash to be payable on or
in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it
to believe that it will file for reorganization or liquidation under the bankruptcy or
reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports set
forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company or
any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of
this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts
owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance
sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of business; and (c) the
present value of any lease payments in excess of $50,000 due under leases required to be
capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with
respect to any Indebtedness.
(Y) Tax Status. Except for matters that would not, individually or in the aggregate,
have or reasonably be expected to result in a Material Adverse Effect, the Company and each
Subsidiary has filed all necessary federal, state and foreign income tax returns and has paid or
accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which
has been asserted or threatened against the Company or any Subsidiary.
(Z) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the
Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly,
used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to any foreign or domestic political parties or campaigns from
corporate funds, (iii) failed to disclose fully any
contribution made by the Company (or made by any person acting on its behalf of which the
Company is aware) which is in violation of law, or (iv) violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended.
(AA) Accountants. The Company’s accountants are named in the Prospectus Supplement. To
the knowledge of the Company, such accountants are a registered public accounting firm as required
by the Securities Act.
(BB) Regulation M Compliance. The Company has not, and to its knowledge no one acting
on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in
the stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation
for soliciting purchases of, any of the Securities (other than for the Placement Agent’s placement
of the Securities), or (iii) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(CC) Approvals. Subject to compliance with the requirements of the Toronto Stock
Exchange and the NASDAQ Global Market, the issuance and listing on the Toronto Stock Exchange and
the NASDAQ Global Market of the Common Shares requires no further approvals, including but not
limited to, the approval of shareholders.
(DD) FINRA Affiliations. There are no affiliations with any FINRA member firm among
the Company’s officers, directors or, to the knowledge of the Company, any five percent (5%) or
greater shareholder of the Company, except as set forth in the Prospectus Supplement.
SECTION 4. INDEMNIFICATION.
(A) To the extent permitted by law, the Company will indemnify Xxxxxx and its
affiliates, stockholders, directors, officers, employees and controlling persons (within the
meaning of Section 15 of the Securities Act, or Section 20 of the Exchange Act) against all
losses, claims, damages, expenses and liabilities, as the same are incurred (including the
reasonable fees and expenses of counsel), relating to or arising out of its activities
hereunder or pursuant to this Agreement, except to the extent that any losses, claims,
damages, expenses or liabilities (or actions in respect thereof) are found in a final
judgment (not subject to appeal) by a court of law to have resulted primarily and directly
from Xxxxxx’x misconduct or negligence in performing the services described herein.
(B) Promptly after receipt by Xxxxxx of notice of any claim or the
commencement of any action or proceeding with respect to which Xxxxxx is entitled to
indemnity hereunder, Xxxxxx will notify the Company in writing of such claim or of the
commencement of such action or proceeding, and the Company will assume the defense of such
action or proceeding and will employ counsel reasonably satisfactory to Xxxxxx and will pay
the fees and expenses of such counsel. Notwithstanding the preceding sentence, Xxxxxx will
be entitled to employ counsel separate from counsel for the Company and from any other party
in such action if counsel for Xxxxxx reasonably determines that it would be inappropriate
under the applicable rules of professional responsibility for the same counsel to represent
both the Company and Xxxxxx. In such event, the reasonable fees and disbursements of no more
than one such separate counsel will be paid by the Company. The Company will have the
exclusive right to settle the claim or proceeding provided that the Company will not settle
any such claim, action or proceeding without the prior written consent of Xxxxxx, which will
not be unreasonably withheld.
(C) The Company agrees to notify Xxxxxx promptly of the assertion against it
or any other person of any claim or the commencement of any action or proceeding relating to
a transaction contemplated by this Agreement.
(D) If for any reason the foregoing indemnity is unavailable to Xxxxxx or
insufficient to hold Xxxxxx harmless, then the Company shall contribute to the amount paid
or payable by Xxxxxx as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect not only the relative benefits received by the
Company on the one hand and Xxxxxx on the other, but also the relative fault of the Company
on the one hand and Xxxxxx on the other that resulted in such losses, claims, damages or
liabilities, as well as any relevant equitable considerations. The amounts paid or payable
by a party in respect of losses, claims, damages and liabilities referred to above shall be
deemed to include any legal or other fees and expenses incurred in defending any litigation,
proceeding or other action or claim. Notwithstanding the provisions hereof, Xxxxxx’x share
of the liability hereunder shall not be in excess of the amount of fees actually received,
or to be received, by Xxxxxx under this Agreement (excluding any amounts received as
reimbursement of expenses incurred by Xxxxxx).
(E) This Section 4 shall remain in full force and effect whether or not the
transaction contemplated by this Agreement is completed and shall survive the termination of
this Agreement, and shall be in addition to any liability that the Company might otherwise
have to any indemnified party under this Agreement or otherwise.
SECTION 5. ENGAGEMENT TERM. Xxxxxx’x engagement hereunder will be for the period of
45 days. The engagement may be terminated by either the Company or Xxxxxx at any time upon 10 days’
written notice. Notwithstanding anything to the contrary contained herein, the provisions in this
Agreement concerning confidentiality, indemnification and contribution will survive any expiration
or termination of this Agreement. Upon any termination of this Agreement, the Company’s obligation
to pay Xxxxxx any fees actually earned on closing of the Placement and otherwise payable under
Section 1(A), shall survive any expiration or termination of this Agreement, as permitted by FINRA
Rule 5110(f)(2)(d). Upon any termination of this Agreement, the Company’s obligation to reimburse
Xxxxxx for out of pocket accountable expenses actually incurred by Xxxxxx and reimbursable upon
closing of the Placement pursuant to Section 1(C), if any are otherwise due under Section 1(C)
hereof, will survive any expiration or termination of this Agreement, as permitted by FINRA Rule
5110(f)(2)(d).
SECTION 6. NO FIDUCIARY RELATIONSHIP. This Agreement does not create, and shall not
be construed as creating rights enforceable by any person or entity not a party hereto, except
those entitled hereto by virtue of the indemnification provisions hereof. The Company acknowledges
and agrees that Xxxxxx is not and shall not be construed as a fiduciary of the Company and shall
have no duties or liabilities to the equity holders or the creditors of the Company or any other
person by virtue of this Agreement or the retention of Xxxxxx hereunder, all of which are hereby
expressly waived.
SECTION 7. CLOSING. The obligations of the Placement Agent and the Purchasers, and
the closing of the sale of the Securities hereunder are subject to the accuracy, when made and on
the Closing Date, of the representations and warranties on the part of the Company and its
Subsidiaries contained herein, to the accuracy of the statements of the Company and its
Subsidiaries made in any certificates pursuant to the provisions hereof (if any), to the
performance by the Company and its Subsidiaries of their obligations hereunder, and to each of the
following additional terms and conditions:
(A) No stop order suspending the effectiveness of the Registration Statement shall have been
issued and no proceedings for that purpose shall have been initiated or threatened by the
Commission, and any request for additional information on the part of the Commission (to be
included in the Registration
Statement, the Base Prospectus or the Prospectus Supplement or otherwise) shall have been
complied with to the reasonable satisfaction of the Placement Agent.
(B) The Placement Agent shall not have discovered and disclosed to the Company on or prior to
the Closing Date that the Registration Statement, the Base Prospectus or the Prospectus Supplement
or any amendment or supplement thereto contains an untrue statement of a fact which, in the opinion
of counsel for the Placement Agent, is material or omits to state any fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary to make the
statements therein not misleading.
(C) All corporate proceedings and other legal matters incident to the authorization, form,
execution, delivery and validity of each of this Agreement, the Securities, the Registration
Statement, the Base Prospectus and the Prospectus Supplement and all other legal matters relating
to this Agreement and the transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Placement Agent, and the Company shall have furnished to such
counsel all documents and information that they may reasonably request to enable them to pass upon
such matters.
(D) The Placement Agent shall have received from Canadian counsel to the Company such
counsel’s written opinion, addressed to the Placement Agent and the Purchasers dated as of the
Closing Date, in form and substance reasonably satisfactory to the Placement Agent, which opinion
shall include a “10b-5” customary representation from such counsel.
(E) Neither the Company nor any of its Subsidiaries shall have sustained since the date of the
latest audited financial statements included or incorporated by reference in the Base Prospectus,
any loss or interference with its business from fire, explosion, flood, terrorist act 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 or contemplated by the Base Prospectus and
(ii) since such date there shall not have been any change in the share capital or long-term debt of
the Company or any of its Subsidiaries or any change, or any development involving a prospective
change, in or affecting the business, general affairs, management, financial position,
shareholders’ equity, results of operations or prospects of the Company and its Subsidiaries,
otherwise than as set forth in or contemplated by the Base Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of the Placement Agent, so material
and adverse as to make it impracticable or inadvisable to proceed with the sale or delivery of the
Securities on the terms and in the manner contemplated by the Base Prospectus and the Prospectus
Supplement.
(F) As of the Closing Date, the Common Shares shall have been conditionally accepted for
listing and authorized for trading on Toronto Stock Exchange and the NASDAQ Global Market, and
satisfactory evidence of such actions shall have been provided to the Placement Agent. The Company
shall have taken no action designed to terminate the registration of the Common Shares under the
Exchange Act or delist or suspend from trading the Common Shares from the Toronto Stock Exchange or
the NASDAQ Global Market, nor has the Company received any information suggesting that the
Commission or Toronto Stock Exchange or the NASDAQ Global Market is contemplating terminating such
registration or listing, except as has been publicly disclosed by the Company.
(G) Subsequent to the execution and delivery of this Agreement, there shall not have occurred
any of the following: (i) trading in securities generally on the Toronto Stock Exchange, the New
York Stock Exchange or the Nasdaq Global Market, shall have been suspended or minimum or maximum
prices or maximum ranges for prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or governmental authority
having jurisdiction, (ii) a banking moratorium shall have been declared by federal or state
authorities or a material disruption has occurred in commercial banking or securities settlement or
clearance services in
the United States, (iii) the United States shall have become engaged in hostilities in which
it is not currently engaged, the subject of an act of terrorism, there shall have been an
escalation in hostilities involving the United States, or there shall have been a declaration of a
national emergency or war by the United States, or (iv) there shall have occurred any other
calamity or crisis or any change in general economic, political or financial conditions in the
United States or elsewhere, if the effect of any such event in clause (iii) or (iv) makes it, in
the sole judgment of the Placement Agent, impracticable or inadvisable to proceed with the sale or
delivery of the Securities on the terms and in the manner contemplated by the Base Prospectus and
the Prospectus Supplement.
(H) 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 Securities or materially and adversely affect or potentially
and adversely affect the business or operations of the Company; 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 Securities
or materially and adversely affect or potentially and adversely affect the business or operations
of the Company.
(I) The Company shall have prepared and filed with the Commission a Current Report on Form 6-K
with respect to the Placement, including as an exhibit thereto this Agreement.
(J) The Company shall have entered into one or more securities purchase agreements with each
of the Purchasers and such agreements shall be in full force and effect and shall contain
representations and warranties of the Company as agreed between the Company and the Purchasers.
(K) FINRA shall have raised no objection to the fairness and reasonableness of the terms and
arrangements of this Agreement. In addition, the Company shall, if requested by the Placement
Agent, make or authorize Placement Agent’s counsel to make on the Company’s behalf, an Issuer
Filing with FINRA pursuant to FINRA Rule 5110 with respect to the Registration Statement and pay
all filing fees required in connection therewith.
(L) Prior to the Closing Date, the Company shall have furnished to the Placement Agent such
further information, certificates and documents as the Placement Agent may reasonably request.
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 Agent.
SECTION 8. GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made and to be
performed entirely in such State. This Agreement may not be assigned by either party without the
prior written consent of the other party. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, and their respective successors and permitted assigns. Any right to
trial by jury with respect to any dispute arising under this Agreement or any transaction or
conduct in connection herewith is waived. Any dispute arising under this Agreement may be brought
into the courts of the State of New York or into the Federal Court located in New York, New York
and, by execution and delivery of this Agreement, the Company hereby accepts for itself and in
respect of its property, generally and unconditionally, the jurisdiction of aforesaid courts. Each
party hereto hereby irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by delivering a copy thereof via overnight delivery
(with evidence of delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. If either party shall commence an action or proceeding to
enforce any provisions of a Transaction
Document, then the prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorneys fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such action or proceeding.
SECTION 9. ENTIRE AGREEMENT/MISC. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior agreements and understandings,
relating to the subject matter hereof. If any provision of this Agreement is determined to be
invalid or unenforceable in any respect, such determination will not affect such provision in any
other respect or any other provision of this Agreement, which will remain in full force and effect.
This Agreement may not be amended or otherwise modified or waived except by an instrument in
writing signed by both Xxxxxx and the Company. The representations, warranties, agreements and
covenants contained herein shall survive the closing of the Placement and delivery and/or exercise
of the Securities, as applicable. This Agreement may be executed in two or more counterparts, all
of which when taken together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to the other party, it
being understood that both parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission or a .pdf format file, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such signature is
executed) with the same force and effect as if such facsimile or .pdf signature page were an
original thereof.
********************
SECTION 10. NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified on the signature pages attached hereto
prior to 6:30 p.m. (New York City time) on a business day, (b) the next business day after the date
of transmission, if such notice or communication is delivered via facsimile at the facsimile number
on the signature pages attached hereto on a day that is not a business day or later than 6:30 p.m.
(New York City time) on any business day, (c) the business day following the date of mailing, if
sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the
party to whom such notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages hereto.
Please confirm that the foregoing correctly sets forth our agreement by signing and returning
to Xxxxxx the enclosed copy of this Agreement.
| Very truly yours, XXXXXX & XXXXXXX, LLC |
||||
| By: | /s/ Xxxx Xxxxx | |||
| Name: | Xxxx Xxxxx | |||
| Title: | Sr. Managing Director | |||
Address for notice:
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX, 00000
Fax (000) 000-0000
Attention: General Counsel
Xxx Xxxx, XX, 00000
Fax (000) 000-0000
Attention: General Counsel
Accepted and Agreed to as of
the date first written above:
the date first written above:
| ÆTERNA ZENTARIS INC. |
||||
| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | Senior Vice President and Chief Financial Officer | |||
Address for notice:
Æterna Zentaris Inc.
0000 xx Xxxx-Xxxxxxxxxxxxx Xxxx.
Québec, Québec
Canada
G1P 4P5
0000 xx Xxxx-Xxxxxxxxxxxxx Xxxx.
Québec, Québec
Canada
G1P 4P5
