Exhibit 1.1
EXECUTION COPY
4,555,270 SHARES
ILLUMINA, INC.
SHARES OF COMMON STOCK
($.01 PAR VALUE)
PLACEMENT AGENT AGREEMENT
May 10, 2004
XX XXXXX & CO., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Illumina, Inc., a Delaware corporation (the "COMPANY"), proposes to sell
to the Purchasers, pursuant to the terms of this Placement Agent Agreement (this
"AGREEMENT") and the Subscription Agreements in the form of Exhibit A attached
hereto (the "SUBSCRIPTION AGREEMENTS") entered into with the Purchasers
identified therein (each a "PURCHASER" and, collectively, the "PURCHASERS"), an
aggregate of 4,555,270 shares of Common Stock, $.01 par value (the "COMMON
STOCK"), of the Company. The aggregate of 4,555,270 shares so proposed to be
sold is hereinafter referred to as the "STOCK." The Company hereby confirms its
agreement with XX Xxxxx & Co., LLC ("XX XXXXX") as follows (certain terms used
herein are defined in Section 13 hereof):
1. AGREEMENT TO ACT AS PLACEMENT AGENT; PLACEMENT OF SECURITIES. On the basis
of the representations, warranties and agreements of the Company herein
contained, and subject to all the terms and conditions of this Agreement:
(a) The Company hereby authorizes XX Xxxxx to act as its exclusive agent
(in such capacity, the "PLACEMENT AGENT") to solicit offers for the
purchase of all or part of the Stock from the Company in connection with
the proposed offering of the Stock (the "OFFERING"). Until the earlier of
the Closing Date or the termination of this Agreement, the Company shall
not, without the prior consent of the Placement Agent, solicit or accept
offers to purchase Stock otherwise than through the Placement Agent.
(b) The Placement Agent agrees, as agent of the Company, to use its
commercially reasonable efforts to solicit offers to purchase the Stock
from the Company on the terms and subject to the conditions set forth in
the Base Prospectus (as defined below) and the Prospectus Supplement (as
defined below). The Placement Agent shall make commercially reasonable
efforts to assist the Company in obtaining performance by each Purchaser
whose offer
to purchase Stock has been solicited by the Placement Agent and accepted
by the Company, but the Placement Agent shall not, except as otherwise
provided in this Agreement, be obligated to disclose the identity of any
potential purchaser or have any liability to the Company in the event any
such purchase is not consummated for any reason. Under no circumstances
will the Placement Agent be obligated to purchase any Stock for its own
account and, in soliciting purchases of Stock, the Placement Agent shall
act solely as the Company's agent and not as principal. Notwithstanding
the foregoing and except as otherwise provided in Section 1(c), it is
understood and agreed that the Placement Agent (or its affiliates) may,
solely at its discretion and without any obligation to do so, purchase
Stock as principal; provided, however, that any such purchases by the
Placement Agent (or its affiliates) shall be fully disclosed to the
Company (including the identity of such purchaser) and approved by the
Company in accordance with Section 1(c).
(c) Subject to the provisions of this Section 1, offers for the purchase
of Stock may be solicited by the Placement Agent as agent for the Company
at such times and in such amounts as the Placement Agent deems advisable.
The Placement Agent shall communicate to the Company, orally or in
writing, each reasonable offer to purchase Stock received by it as agent
of the Company. The Company shall have the sole right to accept offers to
purchase the Stock and may reject any such offer, in whole or in part.
(d) The purchases of the Stock by the Purchasers shall be evidenced by
the execution of the Subscription Agreements by each of the parties
thereto.
(e) As compensation for services rendered, on the Closing Date (as
defined below) the Company shall pay to the Placement Agent by wire
transfer of immediately available funds to an account or accounts
designated by the Placement Agent, an amount equal to six percent (6.0%)
of the gross proceeds received by the Company from the sale of the Stock
on such Closing Date.
(f) No Stock 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 Stock shall have been delivered to the Purchaser
thereof against payment by such Purchaser. If the Company shall default in
its obligations to deliver Stock to a Purchaser whose offer it has
accepted, the Company shall indemnify and hold the Placement Agent
harmless against any loss, claim or damage arising from or as a result of
such default by the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND ITS SUBSIDIARIES. The
Company and its subsidiaries represent and warrant to, and agree with, the
Placement Agent and the Purchasers that:
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), and has filed
with the Securities and Exchange Commission (the "COMMISSION") a
registration statement on such Form (Registration File No. 333-111496),
which became
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effective as of April 14, 2004, for the registration under the Securities
Act of the Stock. Such registration statement meets the requirements set
forth in Rule 415(a)(1)(x) under the Securities Act and complies in all
material respects 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 Stock 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 a "PROSPECTUS SUPPLEMENT." Any reference herein 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 S-3
which were filed under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), on or before the date of this Agreement, or the
issue date of the Base Prospectus or the Prospectus Supplement, as the
case may be; and any reference herein 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 issue date of the Base Prospectus or the
Prospectus Supplement, as the case may be, deemed to be incorporated
therein by reference. All references in this Agreement to financial
statements and schedules and other information which is "contained,"
"included," "described," "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.
(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
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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 the Commission,
conformed in all material respects to the requirements of the Exchange Act
and the applicable Rules and Regulations, and none of such documents, when
they were filed with the Commission, contained any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements therein 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 the Commission, will conform in all
material respects to the requirements of the Exchange Act and the
applicable Rules and Regulations, as applicable, and will not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein not misleading. Notwithstanding
the foregoing, the Company makes no representations or warranties as to
information, if any, contained in or omitted from the Prospectus
Supplement or any amendment thereof or supplement thereto in reliance upon
and in conformity with information furnished in writing to the Company by
or on behalf of the Placement Agent specifically for use in the
Registration Statement or the Prospectus Supplement, which information the
parties hereto agree is limited to the Placement Agent's Information as
defined in Section 15. 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 the
Commission. There are no documents required to be filed with the
Commission in connection with the transaction contemplated hereby that (x)
have not been filed 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 has delivered, or 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
filed as a part thereof, and conformed copies of the Registration
Statement (without exhibits) and 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 Stock 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.
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(d) The Company and each of its subsidiaries have been duly incorporated
and are validly existing as corporations or other legal entities in good
standing (or the equivalent thereof, if any) under the laws of their
respective jurisdictions of incorporation, are duly qualified to do
business and are in good standing (or the equivalent thereof, if any) as
foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all corporate power and
authority necessary to own or hold their respective properties and to
conduct the businesses in which they are engaged, except where the failure
to be so qualified and in good standing or have such power or authority
would not have, singularly or in the aggregate, a material adverse effect
on the condition (financial or otherwise), results of operations,
business, properties or prospects of the Company and its subsidiaries
taken as a whole (a "MATERIAL ADVERSE EFFECT").
(e) The Stock to be issued and sold by the Company hereunder and under
the Subscription Agreements has been duly and validly authorized and, when
issued and delivered against payment therefor as provided herein, will be
duly and validly issued, fully paid and nonassessable and free of any
preemptive or similar rights. The Stock conforms to the description
thereof contained in the Base Prospectus and the Prospectus Supplement.
(f) As of the date of this Agreement and as of the Closing Date, the
Company has an authorized capitalization as set forth in the Base
Prospectus and the Prospectus Supplement, all of the issued and
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable, have
been issued in compliance with federal and state securities laws, and
conform to the description thereof contained in the Base Prospectus and
the Prospectus Supplement. 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 securities of the
Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first refusal or other rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable
for, any capital stock of the Company or any of its subsidiaries that have
been granted by the Company other than as set forth in the Base Prospectus
and the Prospectus Supplement.
(g) All the outstanding shares of capital stock of each subsidiary of
the Company have been duly authorized and validly issued, are fully paid
and nonassessable and, except to the extent set forth in the Base
Prospectus and the Prospectus Supplement, are owned by the Company
directly or indirectly through one or more wholly-owned subsidiaries, free
and clear of any claim, lien, encumbrance, security interest, defect or
restriction upon voting or transfer or any other claim of any kind
("LIENS").
(h) The Company has the full right, power and authority to enter into
this Agreement and each of the Subscription Agreements and to perform and
to discharge its obligations hereunder and thereunder; and each of this
Agreement and each of the Subscription Agreements has been duly
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authorized, executed and delivered by the Company, and constitutes a valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms.
(i) The execution, delivery and performance of this Agreement and the
Subscription Agreements by the Company and the consummation of the
transactions contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries or any statute, law, rule or regulation
or any judgment, order or decree of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties or assets.
(j) There is no franchise, contract, lease, instrument or other document
of a character required by the Securities Act or the Rules and Regulations
to be described in the Base Prospectus and the Prospectus Supplement, or
to be filed as an exhibit to the Registration Statement, which is not
described or filed as required; and all statements summarizing any such
franchises, contracts, leases, instruments or other documents or legal
matters contained in the Registration Statement are accurate and complete
in all material respects. Other than as described in the Base Prospectus
and the Prospectus Supplement, no such franchise, contract, lease,
instrument or other document has been suspended or terminated for
convenience or default by the Company or any of the other parties thereto,
the Company has not sent or received any communication regarding intent
not to renew any such franchise, contract, lease, instrument or other
document, and the Company has not received notice or any other knowledge
of any such pending or threatened suspension, termination or non-renewal,
except for such pending or threatened suspensions, terminations or
non-renewals that would not reasonably be expected to, singularly or in
the aggregate, have a Material Adverse Effect.
(k) All existing minute books of the Company and each of its
subsidiaries, including all existing records of all meetings and actions
of the board of directors (including, Audit, Compensation,
Nomination/Corporate Governance and other board committees) and
stockholders of the Company through the date of the latest meeting and
action (collectively, the "CORPORATE RECORDS") have been made available to
the Placement Agent and counsel for the Placement Agent. All such
Corporate Records are complete and accurately reflect, in all material
respects, all transactions referred to in such Corporate Records. There
are no material transactions, agreements or other actions of the Company
that are not properly approved and/or recorded in the Corporate Records.
(l) No consent, approval, authorization, filing with or order of or
registration with, any court or governmental agency or body is required in
connection with the transactions contemplated herein and in the
Subscription
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Agreements, except such as have been obtained or made under the Securities
Act or the Exchange Act and such as may be required under the securities,
or blue sky, laws of any jurisdiction in connection with the offer and
sale of the Stock by the Company in the manner contemplated herein and in
the Base Prospectus and the Prospectus Supplement.
(m) Except as described in the Base Prospectus and the Prospectus
Supplement, (i) no person has the right, contractual or otherwise, to
cause the Company to issue or sell to it any shares of Common Stock or
shares of any other capital stock or other equity interests of the
Company, (ii) no person has any preemptive rights, resale rights, rights
of first refusal or other rights to purchase any shares of Common Stock or
shares of any other capital stock or other securities of the Company, and
(iii) except as provided herein, no person has the right to act as an
underwriter, placement agent or financial advisor to the Company in
connection with and as a result of the offer and sale of the Shares, in
the case of each of the foregoing clauses (i), (ii) and (iii), whether as
a result of the filing or effectiveness of the Registration Statement or
the sale of the Shares as contemplated thereby or otherwise; no person has
the right, contractual or otherwise, to cause the Company to register
under the Securities Act any shares of Common Stock or shares of any other
capital stock or other securities of the Company, or to include any such
shares or interests in the Registration Statement or the offering
contemplated thereby, whether as a result of the filing or effectiveness
of the Registration Statement or the sale of the Shares as contemplated
thereby or otherwise, except for persons and entities who have expressly
waived such right or who have been given timely and proper notice and have
failed to exercise such right within the time or times required under the
terms and conditions of such right, and the Company is not currently
required to file any registration statement for the registration of any
securities of any person or register any such securities pursuant to any
other registration statement filed by the Company under the Securities Act
for a period of at least 90 days after the date hereof.
(n) The financial statements, together with the related notes and
schedules, of the Company included in the Base Prospectus, the Prospectus
Supplement or the Registration Statement, or incorporated by reference
therein, as the case may be, present fairly the financial condition,
results of operations and cash flows of the Company and its consolidated
subsidiaries and other consolidated entities as of the dates and for the
periods indicated, comply in all material respects with the Securities Act
and the Rules and Regulations thereunder, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(o) Except as set forth in the Base Prospectus and the Prospectus
Supplement, there is no legal or governmental proceeding pending to which
the Company or any of its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries is the subject which,
singularly or in the aggregate, if determined adversely to the Company or
any of its subsidiaries, would reasonably be expected to have a Material
Adverse Effect or would prevent or adversely affect the ability of the
Company to perform its obligations under this Agreement; and to the
Company's
7
knowledge, no such proceedings are threatened by governmental authorities
or threatened by others.
(p) The Company and each of its subsidiaries have good and marketable
title to all property (real and personal) described in the Registration
Statement, the Base Prospectus and the Prospectus Supplement as being
owned by the Company or its subsidiaries, free and clear of all Liens,
except for those Liens that do not materially interfere with the use made
or proposed to be made of such property by the Company or its subsidiaries
or that would not have a Material Adverse Effect; all the property
described in the Registration Statement, the Base Prospectus and the
Prospectus Supplement as being held under lease by the Company or a
subsidiary is held thereby under valid, subsisting and enforceable leases
except where the failure to be valid, subsisting or enforceable would not
have a Material Adverse Effect.
(q) Neither the Company nor any of its subsidiaries is (i) in violation
of any provision of its charter or bylaws, (ii) in default in any respect,
and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of
any term, covenant, or condition of any indenture, contract, lease,
mortgage, deed of trust, note agreement, loan agreement or other
agreement, obligation, condition, covenant or instrument to which it is a
party or by which it is bound or to which any of its property or assets is
subject, or (iii) in violation in any respect 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, its subsidiaries or any of
its properties, as applicable (including, without limitation, those
administered by the Food and Drug Administration of the U.S. Department of
Health and Human Services (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), any violations or defaults which, singularly or in the aggregate,
would not have a Material Adverse Effect.
(r) The contracts described in the Company's regular reports on Forms
10-Q, 10-K, and 8-K as filed by the Company with the Commission or
incorporated by reference therein that are material to the Company are in
full force and effect on the date hereof, and neither the Company nor, to
the Company's knowledge, any other party to such contracts is in breach of
or default under any of such contracts which would have a Material Adverse
Effect.
(s) 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 have a Material Adverse Effect. The Company is
not aware that any key employee or significant group of employees of the
Company or any subsidiary plans to terminate employment with the Company
or any such subsidiary.
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(t) Each of the Company and its subsidiaries has fulfilled its
obligations, if any, under the minimum funding standards of Xxxxxxx 000 xx
xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of 1974
("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 and its subsidiaries 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")) has occurred with respect to any employee
benefit plan which could have a Material Adverse Effect. The Company and
each of its subsidiaries has not incurred any unpaid liability to the
Pension Benefit Guaranty Corporation (other than for the payment of
premiums in the ordinary course) or to any such plan under Title IV of
ERISA. Each "PENSION PLAN" (as defined in ERISA) for which the Company
would have any liability that is intended to be qualified under Section
401(a) of the Code is so qualified in all material respects and nothing
has occurred, whether by action or by failure to act, which could cause
the loss of such qualification.
(u) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses
in similar industries; all such insurance is fully in force on the date
hereof and will be fully in force on the Closing Date.
(v) The Company and each of its subsidiaries has made all filings,
applications and submissions required by, and 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 businesses
(collectively, "PERMITS"), and is in compliance with the terms and
conditions of all such Permits, except for such Permits which if not
obtained or complied with would not have a Material Adverse Effect; all of
such Permits held by the Company and each of its subsidiaries are valid
and in full force and effect except as would not have a Material Adverse
Effect; there is no pending or threatened action, suit, claim or
proceeding which may cause any such Permit to be limited, revoked,
cancelled, suspended, modified or not renewed and the Company and each of
its subsidiaries has not received any notice of proceedings relating to
the limitation, revocation, cancellation, suspension, modification or
non-renewal of any such Permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated by the
Base Prospectus or the Prospectus Supplement.
9
(w) Ernst & Young LLP, who have certified certain financial statements
of the Company and delivered their report with respect to the audited
consolidated financial statements and schedules included in the Base
Prospectus, the Prospectus Supplement or the Registration Statement, or
incorporated by reference therein, as the case may be, are independent
public accountants with respect to the Company within the meaning of the
Securities Act and the Rules and Regulations.
(x) The Company and each of its subsidiaries has filed all foreign,
federal, state and local tax returns that are required to be filed or has
requested extensions thereof (except in any case in which the failure so
to file would not have a Material Adverse Effect, except as set forth in
the Base Prospectus and the Prospectus Supplement) and has paid all taxes
required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable,
except for any such assessment, fine or penalty that is currently being
contested in good faith or as would not have a Material Adverse Effect,
except as set forth in the Base Prospectus and the Prospectus Supplement.
(y) The principal executive officer and principal financial officer of
the Company have made all certifications required by the Xxxxxxxx-Xxxxx
Act of 2002 and the rules and regulations promulgated in connection
therewith (the "XXXXXXXX-XXXXX ACT"), and the statements contained in any
such certification are complete and correct. The Company maintains
"disclosure controls and procedures" (as defined in Rule 13a-15(e) under
the Exchange Act), and such controls and procedures are designed (i) to
ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in
the Commission's rules and forms and (ii) to ensure that information
required to be disclosed by the Company in the reports that it files or
submits under the Exchange Act is accumulated and communicated to the
Company's management, including its principal executive officer and
principal financial officer, as appropriate to allow timely decisions
regarding required disclosure. There has been no fraud, whether or not
material, that involves management or other employees who have a
significant role in the Company's internal controls. The Company is
otherwise in compliance in all respects with all applicable effective
provisions of the Xxxxxxxx-Xxxxx Act and the rules and regulations
promulgated by the Commission (and intends to comply with all applicable
provisions that are not yet effective upon effectiveness).
(z) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability of 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
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the existing assets at reasonable intervals and appropriate action is
taken with respect to any differences.
(aa) The Company and each of its subsidiaries (i) is in compliance in all
material respects with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("ENVIRONMENTAL LAWS"), (ii) has received and
is in compliance with all permits, licenses or other approvals required of
it under applicable Environmental Laws to conduct its business and (iii)
has 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 where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not, individually
or in the aggregate, have a Material Adverse Effect, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated by the Base Prospectus and the Prospectus
Supplement (exclusive of any supplement thereto). The Company has not been
named as a "POTENTIALLY RESPONSIBLE PARTY" under the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as
amended.
(bb) In the ordinary course of its business, the Company periodically
reviews the effect of Environmental Laws on the business, operations and
properties of the Company and each of its subsidiaries, in the course of
which it identifies and evaluates associated costs and liabilities
(including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with
Environmental Laws, or any permit, license or approval, any related
constraints on operating activities and any potential liabilities to third
parties). On the basis of such review, the Company has reasonably
concluded that such associated costs and liabilities would not, singly or
in the aggregate, have a Material Adverse Effect, whether or not arising
from transactions in the ordinary course of business, except as set forth
in or contemplated by the Base Prospectus and the Prospectus Supplement.
(cc) Except as set forth in the Base Prospectus and the Prospectus
Supplement, the Company and its subsidiaries own, possess, license or have
other rights to use all foreign and domestic patents, patent applications,
trade and service marks, trade and service xxxx registrations, trade
names, copyrights, licenses, inventions, trade secrets, technology,
Internet domain names, know-how and other intellectual property
(collectively, the "INTELLECTUAL PROPERTY") necessary for the conduct of
the Company's business as now conducted or as proposed in the Base
Prospectus and the Prospectus Supplement to be conducted. Except as set
forth in the Base Prospectus and the Prospectus Supplement (a) there are
no rights of third parties to any such Intellectual Property; (b) to the
Company's knowledge, there is no infringement by third parties of any such
Intellectual Property; (c) there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's and its subsidiaries' rights in or to any such
Intellectual Property, and the Company is unaware of
11
any facts which would form a reasonable basis for any such claim; (d)
there is no pending or, to the best of the Company's knowledge, threatened
action, suit, proceeding or claim by others challenging the validity or
scope of any such Intellectual Property; (e) there is no pending or, to
the Company's knowledge, threatened action, suit, proceeding or claim by
others that the Company and its subsidiaries infringe or otherwise violate
any patent, trademark, copyright, trade secret or other proprietary rights
of others, and the Company is unaware of any other fact which would form a
reasonable basis for any such claim; and (f) to the Company's knowledge,
there is no third-party U.S. patent or published U.S. patent application
which contains claims for which an Interference Proceeding could be
commenced against any patent or patent application described in the Base
Prospectus and the Prospectus Supplement as being owned by or licensed to
the Company, except for Interference Proceedings based on claims under any
such patents or published patent applications as would not have a Material
Adverse Effect.
(dd) No relationship, direct or indirect, exists between or among the
Company on the one hand and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand which is required
by applicable securities laws to be described in the Base Prospectus and
the Prospectus Supplement and which is not so described.
(ee) 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 any of its subsidiaries, has, directly or indirectly, while
acting on behalf of the Company or any of its subsidiaries (i) used any
corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses, or received or retained any funds, relating to
political activity; (ii) made any unlawful payment from corporate funds
to, or received or retained any unlawful funds from, foreign or domestic
government officials or employees or to or from foreign or domestic
political parties or campaigns; or (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended.
(ff) Neither the Company nor any of its subsidiaries is or, after giving
effect to the offering and sale of the Stock and the application of the
proceeds thereof as described in the Base Prospectus and the Prospectus
Supplement, will become an "INVESTMENT COMPANY" as defined in the
Investment Company Act of 1940, as amended.
(gg) No forward-looking statement (within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act) contained in the
Base Prospectus and the Prospectus Supplement has been made or reaffirmed
without a reasonable basis or has been disclosed other than in good faith.
(hh) Other than as contemplated by this Agreement, neither the Company
nor any of its subsidiaries is a party to any contract, agreement or
understanding with any person that would give rise to a valid claim
against the Company or the Placement Agent for a brokerage commission,
finder's fee or like payment in connection with the offering and sale of
the Stock.
12
(ii) Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements included in the Base
Prospectus, the Prospectus Supplement or the Registration Statement, or
incorporated by reference therein, as the case may be, any material 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 the Base Prospectus and the Prospectus Supplement.
(jj) Except as set forth in or as otherwise contemplated by the
Registration Statement, the Base Prospectus or the Prospectus Supplement,
subsequent to the respective dates as of which information is given in the
Registration Statement, the Base Prospectus and the Prospectus Supplement,
there has not been (i) any material adverse change, or any development
that would reasonably be expected to result in a material adverse change,
in the business, properties, management, financial condition or results of
operations of the Company taken as a whole, (ii) any transaction which is
material to the Company taken as a whole, (iii) any obligation, direct or
contingent (including any off-balance sheet obligations), incurred by the
Company outside the ordinary course of business, which is material to the
Company taken as a whole, (iv) any change in the capital stock (other than
the issuance of shares of Common Stock upon exercise of stock options and
warrants disclosed as outstanding in the Registration Statement, the Base
Prospectus and the Prospectus Supplement and the grant of options under
existing stock option plans described in the Registration Statement, the
Base Prospectus and the Prospectus Supplement) or outstanding indebtedness
of the Company or (v) any dividend or distribution of any kind declared,
paid or made on the capital stock of the Company.
(kk) Any statistical and market-related data included in the Registration
Statement, the Base Prospectus or the Prospectus Supplement are based on
or derived from sources that the Company believes to be reliable and
accurate, and the Company has obtained the written consent to the use of
such data from such sources to the extent required.
(ll) The Stock is registered under the Exchange Act and is duly listed
and admitted and authorized for trading, subject to official notice of
issuance, on the Nasdaq National Market ("Nasdaq") and the Company has
taken no action designed to, or likely to have the effect of terminating
the registration of the Common Stock under the Exchange Act or delisting
or suspending from trading the Common Stock from Nasdaq, nor has the
Company received from the National Association of Securities Dealers, Inc.
("NASD") notice that the NASD is contemplating terminating or suspending
such registration or listing.
(mm) Neither the Company nor any of its subsidiaries nor any of their
officers, directors or affiliates has taken or will take, directly or
indirectly, any action designed or intended to stabilize or manipulate the
price of any security of the Company, or which caused or resulted in, or
which would in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company.
13
(nn) To the best of the Company's knowledge, there are no affiliations
with the NASD among the Company's officers, directors or any five percent
or greater stockholder of the Company, except as set forth in the Base
Prospectus, the Prospectus Supplement or the Registration Statement or
otherwise disclosed in writing to the Placement Agent.
(oo) The Company satisfies the pre-1992 eligibility requirements for the
use of a Registration Statement on Form S-3 in connection with the
Offering contemplated thereby (the pre-1992 eligibility requirements for
the use of the Registration Statement on Form S-3 include (i) having a
non-affiliate, public common equity float of at least $150 million or a
non-affiliate, public common equity float of at least $100 million and
annual trading volume of at least three million shares and (ii) having
been subject to the Exchange Act reporting requirements for a period of 36
months).
Any certificate signed by any officer of the Company and delivered to the
Placement Agent or counsel for the Placement Agent in connection with the
offering of the Stock shall be deemed a representation and warranty by the
Company and its subsidiaries, as to the matters covered thereby, to the
Placement Agent and the Purchasers.
3. THE CLOSING. The time and date of closing and delivery of the documents
required to be delivered to the Placement Agent pursuant to Section 6 hereof
shall be at 9:00 A.M., local time, on May 14, 2004 (the "CLOSING DATE") at the
office of Xxxxxx Xxxxxx White & XxXxxxxxx LLP, 0000 Xx Xxxxx Xxxxxxx Xxxxx, 0xx
Xxxxx, Xxx Xxxxx, Xxxxxxxxxx.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the Placement
Agent and the Purchasers:
(a) (i) to make no further amendment or supplement prior to the Closing
Date to the Registration Statement or any amendment or supplement to the
Prospectus Supplement, without the prior written consent of the Placement
Agent, which consent shall not be unreasonably withheld; (ii) for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Stock, to advise the Placement Agent promptly
after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus Supplement or any amended Prospectus
Supplement has been filed and to furnish the Placement Agent with copies
thereof; (iii) subsequent to the date of the Prospectus Supplement and for
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Stock, to use its commercially reasonable efforts
to file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission and
Nasdaq pursuant to Section 13(a), 15 or 15(d) of the Exchange Act; (iv) to
advise the Placement Agent, promptly after it receives notices thereof,
(x) of any request by the Commission to amend the Registration Statement
or to amend or supplement the Prospectus Supplement or for additional
information and (y) of the issuance by the Commission, of any stop order
suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto or any order directed at any
14
Incorporated Document or any amendment or supplement thereto or any order
preventing or suspending the use of the Base Prospectus or the Prospectus
Supplement or any amendment or supplement thereto, of the suspension of
the qualification of the Stock for offering or sale in any jurisdiction,
of the institution or threatening of any proceeding for any such purpose,
or of any request by the Commission for the amending or supplementing of
the Registration Statement or Prospectus Supplement or for additional
information; and, (v) in the event of the issuance of any stop order or of
any order preventing or suspending the use of the Base Prospectus or
Prospectus Supplement or suspending any such qualification, promptly to
use its reasonable best efforts to obtain the withdrawal of such order.
(b) To comply with the Securities Act and the Exchange Act, and the
Rules and Regulations thereunder, so as to permit the completion of the
distribution of the Stock as contemplated in this Agreement and the
Prospectus Supplement. If during the period in which a prospectus is
required by law to be delivered by a Placement Agent or a dealer in
connection with the distribution of Stock contemplated by the Prospectus
Supplement, any event shall occur as a result of which, in the judgment of
the Company or in the reasonable opinion of the Placement Agent or counsel
for the Placement Agent, it becomes necessary to amend or supplement the
Prospectus Supplement in order to make the statements therein, in the
light of the circumstances existing at the time the Prospectus Supplement
is delivered to a purchaser, not misleading, or, if it is necessary at any
time to amend or supplement the Prospectus Supplement to comply with any
law, the Company promptly will prepare and file with the Commission, and
furnish at its own expense to the Placement Agent and to dealers, an
appropriate amendment to the Registration Statement or supplement to the
Prospectus Supplement so that the Prospectus Supplement as so amended or
supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus Supplement will comply
with such law. Before amending the Registration Statement or supplementing
the Base Prospectus in connection with the Offering, the Company will
furnish the Placement Agent with a copy of such proposed amendment or
supplement and will not file such amendment or supplement to which the
Placement Agent reasonably objects.
(c) To furnish promptly to the Placement Agent and to counsel for the
Placement Agent a copy of the Registration Statement as originally filed
with the Commission, and each amendment thereto filed with the Commission,
including all consents and exhibits filed therewith.
(d) To deliver promptly to the Placement Agent such number of the
following documents as the Placement Agent 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) the Base Prospectus, (iii) the Prospectus Supplement (as
soon as practicable, but no later than on the second Business Day
following the execution and delivery of this Agreement) and any amendment
or supplement thereto (as soon as practicable, but no later than on the
second Business Day following the date of such amendment or supplement);
and (iv) any document
15
incorporated by reference in the Base Prospectus or Prospectus Supplement.
The Company will pay the expenses of printing or other production of all
documents relating to the Offering.
(e) To make generally available to its stockholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Securities Act), an earnings statement of the Company (which
need not be audited) complying with Section 11(a) of the Securities Act
and the Rules and Regulations (including, at the option of the Company,
Rule 158).
(f) To promptly take from time to time such actions as the Placement
Agent may reasonably request to qualify the Stock for offering and sale
under the securities, or blue sky, laws of such jurisdictions (including
without limitation any post-filing requirements) as the Placement Agent
may designate and to continue such qualifications in effect for so long as
required for the distribution of the Stock, and the Company will pay the
fee of the NASD in connection with its review of the Offering, if
applicable. The Company shall not 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.
(g) Not to directly or indirectly offer, sell, assign, transfer, pledge,
contract to sell, or otherwise dispose of any shares of Common Stock or
securities convertible into or exercisable or exchangeable for Common
Stock for a period of 90 days from the date of the Prospectus Supplement
without the prior written consent of XX Xxxxx, other than the Company's
sale of the Stock, the issuance of Common Stock upon exercise or
conversion of currently outstanding options, warrants or rights, and the
issuance of Common Stock, stock options, stock appreciation rights or
other securities or rights pursuant to the Company's currently existing
equity compensation plans. The Company will cause each of its executive
officers and directors to furnish to the Placement Agent, prior to the
Closing Date, a letter, substantially in the form of Exhibit B attached
hereto, pursuant to which each such person shall agree not to directly or
indirectly offer, sell, assign, transfer, pledge, contract to sell, or
otherwise dispose of any shares of Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock for a period of 90
days from the date of the Prospectus Supplement, except for sales made
pursuant to a written stock selling plan under Rule 10b5-1 of the Exchange
Act or with the prior written consent of XX Xxxxx. If (i) the Company
issues an earnings release or material news or a material event relating
to the Company occurs during the last 17 days of the lock-up period, or
(ii) 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, the restrictions imposed by this
Section 4(g) shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release or the occurrence
of the material news or material event.
(h) Prior to the Closing Date, to furnish to the Placement Agent, as
soon as they have been prepared, copies of any unaudited interim
consolidated
16
financial statements of the Company for any periods subsequent to the
periods covered by the financial statements appearing or incorporated by
reference in the Base Prospectus, the Prospectus Supplement or the
Registration Statement.
(i) Prior to the Closing Date, not to issue any press release or other
communication directly or indirectly or hold any press conference with
respect to the Company, its condition, financial or otherwise, or
earnings, business affairs or business prospects (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 Agent is
notified), without the prior written consent of the Placement Agent,
unless in the judgment of the Company and its counsel, and after
notification to the Placement Agent, such press release or communication
is required by law. In such event, the Company shall consult with the
Placement Agent as to the contents of such press release.
(j) To apply the net proceeds from the sale of the Stock as set forth in
the Prospectus Supplement under the heading "USE OF PROCEEDS."
(k) To comply in all material respects with all applicable securities
and other applicable laws, rules and regulations, including, without
limitation, the Xxxxxxxx-Xxxxx Act, and use its best efforts to cause the
Company's directors and officers, in their capacities as such, to comply
with such laws, rules and regulations, including, without limitation, the
provisions of the Xxxxxxxx-Xxxxx Act.
(l) To engage and maintain, at its expense, a registrar and transfer
agent for the Stock.
(m) To not take any action prior to the Closing Date which would require
the Prospectus Supplement to be amended or supplemented pursuant to
Section 4(b).
(n) To supply the Placement Agent with copies of all correspondence to
and from, and all documents issued to and by, the Commission in connection
with the registration of the Stock under the Securities Act.
(o) To use its best efforts to ensure that the Stock is quoted on the
Nasdaq National Market at the Closing Date.
5. PAYMENT OF EXPENSES. The Company agrees with the Placement Agent to pay
(a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Stock to the Purchasers and any taxes payable in that
connection; (b) the costs incident to the Registration of the Stock under the
Securities Act; (c) the costs incident to the preparation, printing and
distribution of the Registration Statement, Base Prospectus and Prospectus
Supplement and any amendments and exhibits thereto or any document incorporated
by reference therein, and the costs of printing, reproducing and distributing,
this Agreement by mail, telex or other means of communication; (d) the fees and
expenses incurred in connection with filings, if any, made with the NASD, if
applicable; (e) any applicable listing or other fees; (f) the fees and expenses
of qualifying the Stock under the securities laws of the several
17
jurisdictions as provided in Section 4(f) and of preparing, printing and
distributing Blue Sky Memoranda (including related reasonable fees and expenses
of counsel to the Placement Agent); (g) all fees and expenses of the registrar
and transfer agent of the Stock; and (h) all other costs and expenses incident
to the performance of the obligations of the Company under this Agreement
(including, without limitation, the fees and expenses of the Company's counsel
and the Company's independent accountants and the travel and other expenses
incurred by Company personnel in connection with any "roadshow" including,
without limitation, any expenses advanced by the Placement Agent on the
Company's behalf (which will be promptly reimbursed)); provided that, except as
otherwise provided in this Section 5 and in Sections 7 and 9, the Placement
Agent shall pay its own costs and expenses, including the fees and expenses of
its counsel.
6. CONDITIONS TO THE OBLIGATIONS OF THE PLACEMENT AGENT AND THE PURCHASERS,
AND THE SALE OF THE STOCK. The respective obligations of the Placement Agent and
the Purchasers, and the closing of the sale of the Stock 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, 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. Any filings required to be made by
the Company in accordance with Section 4(a) shall have been timely filed
with the Commission.
(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 Stock, 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.
18
(d) The Placement Agent shall have received from Xxxxxx Xxxxxx White &
XxXxxxxxx LLP, corporate counsel for the Company; such counsel's written
opinion, addressed to the Placement Agent and the Purchasers and dated as
of the Closing Date, in form and substance reasonably satisfactory to the
Placement Agent as set forth in Exhibit C-1 attached hereto.
(e) The Company shall have furnished to the Placement Agent a
certificate addressed to the Placement Agent and the Purchasers, dated as
of the Closing Date, executed by its Vice President of Intellectual
Property, in form and substance reasonably satisfactory to the Placement
Agent as set forth in Exhibit C-2 attached hereto.
(f) The Placement Agent shall have received from Xxxxx Raysman Xxxxxxxxx
Xxxxxx & Xxxxxxx LLP, such opinion or opinions, dated the Closing Date and
addressed to the Placement Agent, with respect to the issuance and sale of
the Stock, the Registration Statement, the Base Prospectus, the Prospectus
Supplement (together with any supplement thereto) and other related
matters as the Placement Agent may reasonably require, and the Company
shall have furnished to such counsel such documents as they request for
the purpose of enabling them to pass upon such matters.
(g) The Company shall have furnished to the Placement Agent and the
Purchasers a certificate, dated as of the Closing Date, executed by its
Chairman of the Board, its Chief Executive Officer or a Vice President and
its Chief Financial Officer stating that (i) such officers have carefully
examined the Registration Statement, the Base Prospectus and the
Prospectus Supplement and, in their opinion, the Registration Statement
(including the Base Prospectus) as of its effective date and the
Prospectus Supplement, as of each such effective date, did not include any
untrue statement of a material fact and did not omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) since the effective date of the Registration
Statement no event has occurred which should have been set forth in a
supplement or amendment to the Registration Statement, the Base Prospectus
or the Prospectus Supplement, (iii) to the best of their knowledge after
reasonable investigation, as of the Closing Date, the representations and
warranties of the Company and its subsidiaries in this Agreement are true
and correct and the Company and its subsidiaries have complied in all
material respects with all agreements and covenants contained in this
Agreement and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, (iv) subsequent to
the date of the most recent financial statements included or incorporated
by reference in the Base Prospectus and the Prospectus Supplement, there
has been no change in the financial position or results of operation of
the Company and its subsidiaries that would have a Material Adverse
Effect, or any material change, or any material development including a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Company
and its subsidiaries taken as a whole, except as set forth in the Base
Prospectus and the Prospectus Supplement, and (v) the Registration
Statement is effective, and to their knowledge, as of the Closing Date (I)
no stop order suspending the effectiveness of the Registration
19
Statement has been issued and no proceedings for that purpose have been
commenced or are pending before or are contemplated by the Commission and
(II) no action has been taken by any governmental agency, body or
official, and no injunction, restraining order or order of any nature by
any federal or state court has been issued, which would prevent the
issuance of the Stock.
(h) At the time of the execution of this Agreement, the Placement Agent
shall have received from Ernst & Young LLP a letter, addressed to the
Placement Agent dated such date, in form and substance reasonably
satisfactory to the Placement Agent (i) confirming that they are
independent certified public accountants with respect to the Company
within the meaning of the Securities Act and the Rules and Regulations and
(ii) stating the conclusions and findings of such firm with respect to the
financial statements and certain financial information contained or
incorporated by reference in the Base Prospectus and the Prospectus
Supplement.
(i) On the Closing Date, the Placement Agent shall have received a
letter (the "BRING-DOWN LETTER") from Ernst & Young LLP addressed to the
Placement Agent and dated the Closing Date confirming, 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 Base Prospectus and the Prospectus Supplement
as of a date not more than three Business 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 its letter
delivered to the Placement Agent concurrently with the execution of this
Agreement pursuant to Section 6(h).
(j) (i) 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 and the
Prospectus Supplement 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 the Prospectus Supplement, and (ii) since such
date there shall not have been any change in the capital stock 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, stockholders'
equity, results of operations or prospects of the Company and its
subsidiaries, otherwise than as set forth in or contemplated by the Base
Prospectus and the Prospectus Supplement, 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 Stock on the terms and in the
manner contemplated by the Base Prospectus and the Prospectus Supplement.
(k) The Stock is registered under the Exchange Act and, as of the
Closing Date, shall be listed and admitted and authorized for trading on
the Nasdaq National Market, and satisfactory evidence of such actions
shall have been
20
provided to the Placement Agent. The Company shall have taken no action
designed to, or likely to have the effect of terminating the registration
of the Stock under the Exchange Act or delisting or suspending from
trading the Stock from Nasdaq, nor has Nasdaq notified the Company that it
is contemplating terminating such registration or listing.
(l) At the Execution Time, the Company shall have furnished to the
Placement Agent a letter substantially in the form of Exhibit B hereto
from each executive officer and director of the Company.
(m) 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 New York Stock Exchange, the Nasdaq National Market or
the American Stock Exchange or in the over-the-counter market, or trading
in any securities of the Company on any exchange or in the
over-the-counter 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, or the subject of an act of terrorism, there shall
have been an escalation in existing 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 such a material
adverse change in general economic, political or financial conditions in
the United States (or the effect of international conditions on the
financial markets in the United States shall be such) as to make it, in
the case of any such event in clause (iii) or (iv), in the sole judgment
of the Placement Agent, impracticable or inadvisable to proceed with the
sale or delivery of the Stock on the terms and in the manner contemplated
by the Base Prospectus and the Prospectus Supplement.
(n) 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 Stock; 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 Stock.
(o) The Company shall have prepared and filed with the Commission a
Current Report on Form 8-K with respect to the Offering, including as an
exhibit thereto this Agreement and any other documents relating thereto.
(p) The Company shall have entered into Subscription Agreements with
each of the Purchasers and such agreements shall be in full force and
effect.
(q) Prior to the Closing Date, the Company shall have furnished to XX
Xxxxx such further information, certificates and documents as XX Xxxxx may
reasonably request.
21
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.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless the Placement Agent,
its officers, employees, representatives and agents and each person, if
any, who controls the Placement Agent within the meaning of the Securities
Act (collectively the "PLACEMENT AGENT INDEMNIFIED Parties" and each a
"PLACEMENT AGENT INDEMNIFIED PARTY") against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
that Placement Agent Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of or is based upon (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Base Prospectus, the Registration Statement or the Prospectus Supplement
or in any amendment or supplement thereto, (ii) the omission or alleged
omission to state in the Base Prospectus, the Registration Statement or
the Prospectus Supplement or in any amendment or supplement thereto a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and shall reimburse each Placement
Agent Indemnified Party promptly upon demand for any legal or other
expenses reasonably incurred by that Placement Agent Indemnified Party in
connection with investigating or preparing to defend or defending against
or appearing as a third party witness in connection with any such loss,
claim, damage, liability or action as such expenses are incurred;
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 in or omission or alleged omission from the Base Prospectus, the
Registration Statement or the Prospectus Supplement or any such amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company through the Placement Agent specifically for use
therein, which information the parties hereto agree is limited to the
Placement Agent's Information (as defined in Section 15). This indemnity
agreement is not exclusive and will be in addition to any liability, which
the Company might otherwise have and shall not limit any rights or
remedies which may otherwise be available at law or in equity to each
Placement Agent Indemnified Party.
(b) The Placement Agent shall indemnify and hold harmless the Company
its officers, employees, representatives and agents, each of its directors
and each person, if any, who controls the Company within the meaning of
the Securities Act (collectively the "COMPANY INDEMNIFIED PARTIES" and
each a "COMPANY INDEMNIFIED PARTY") against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which
the Company Indemnified Parties may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of or is based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the Base Prospectus, the
Registration Statement or
22
the Prospectus Supplement or in any amendment or supplement thereto or
(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, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished
to the Company through the Placement Agent specifically for use therein,
and shall reimburse the Company Indemnified Parties for any legal or other
expenses reasonably incurred by such parties in connection with
investigating or preparing to defend or defending against or appearing as
third party witness in connection with any such loss, claim, damage,
liability or action as such expenses are incurred; provided that the
parties hereto hereby agree that such written information provided by the
Placement Agent consists solely of the Placement Agent's Information. This
indemnity agreement is not exclusive and will be in addition to any
liability, which the Placement Agent and the Purchasers might otherwise
have and shall not limit any rights or remedies which may otherwise be
available at law or in equity to the Company Indemnified Parties.
Notwithstanding the provisions of this Section 7(b), in no event shall any
indemnity under this Section 7(b) exceed the total compensation received
by the Placement Agent in accordance with Section 1(e).
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the claim or the commencement of that action; provided,
however, that the failure to notify the indemnifying party shall not
relieve it from any liability which it may have under this Section 7
except to the extent it has been materially prejudiced by such failure;
and, provided, further, that the failure to notify the indemnifying party
shall not relieve it from any liability which it may have to an
indemnified party otherwise than under this Section 7. If any such claim
or action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the
defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 7 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that any indemnified
party shall have the right to employ separate counsel in any such action
and to participate in the defense thereof but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i)
the employment thereof has been specifically authorized by the
indemnifying party in writing, (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses
available to it which are different from or additional to those available
to the indemnifying party and in the reasonable judgment of such counsel
it is advisable for such indemnified party to employ separate counsel or
(iii) the indemnifying party has failed to
23
assume the defense of such action in accordance with the terms hereof and
employ counsel reasonably satisfactory to 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, which firm shall be designated in writing by
the Placement Agent, if the indemnified parties under this Section 7
consist of any Placement Agent Indemnified Party, or by the Company if the
indemnified parties under this Section 7 consist of any Company
Indemnified Parties. Each indemnified party, as a condition of the
indemnity agreements contained in Sections 7(a) and 7(b) shall use all
reasonable efforts to cooperate with the indemnifying party in the defense
of any such action or claim. Subject to the provisions of Section 7(d)
below, no indemnifying party shall be liable for any settlement,
compromise or consent to the entry of judgment in connection with any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if
there be a final judgment for the plaintiff in any such action (other than
a judgment entered with the consent of such indemnified party), the
indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement
or judgment.
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by this Section 7 effected without
its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the request for
reimbursement, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement
being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
(e) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under Section 7(a)
or 7(b), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Placement Agent on the other from the offering of the Stock 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 Agent on
the other with respect to the statements or omissions
24
which resulted in such loss, claim, damage or liability, or action in
respect thereof, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Placement Agent on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering
of the Stock purchased under this Agreement (before deducting expenses)
received by the Company bears to the total compensation received by the
Placement Agent with respect to the Stock purchased under this Agreement.
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 on the one hand or the Placement Agent
on the other, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission; provided that the parties hereto agree that the
written information furnished to the Company by the Placement Agent for
use in the Prospectus Supplement consists solely of the Placement Agent's
Information. The Company and the Placement Agent agree that it would not
be just and equitable if contributions pursuant to this Section 7(e) were
to be determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as
a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 7(e) shall be deemed to
include, for purposes of this Section 7(e), any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(e), the Placement Agent shall not be required
to contribute any amount in excess of (x) the aggregate total price at
which the Stock was sold to the Purchasers less (y) the amount of any
damages which such Placement Agent has otherwise paid or become liable to
pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. 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.
8. TERMINATION. The obligations of the Placement Agent and the Purchasers
hereunder and under the Subscription Agreements may be terminated by the
Placement Agent, in its absolute discretion by notice given to the Company prior
to delivery (including electronic delivery) of and payment for the Stock if,
prior to that time, any of the events described in Sections 6(j) or 6(m) have
occurred or if the Purchasers shall decline to purchase the Stock for any reason
permitted under this Agreement.
9. REIMBURSEMENT OF PLACEMENT AGENT'S EXPENSES. If the sale of the Stock
provided for herein is not consummated because any condition to the obligations
of the Placement Agent and the Purchasers set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 8 hereof or because of
any refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by the Placement Agent, the Company will reimburse the Placement Agent
upon demand for all
25
reasonable out-of-pocket expenses (including reasonable fees and disbursements
of counsel and any expenses advanced by the Placement Agent on the Company's
behalf) that shall have been incurred by the Placement Agent in connection with
this Agreement and the proposed purchase and sale of the Stock and, upon demand,
the Company shall pay the full amount thereof to XX Xxxxx.
10. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Placement Agent, the Purchasers,
the Company, and their respective successors. 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 the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the Placement Agent Indemnified Parties, and
the indemnities of the Placement Agent shall also be for the benefit of the
Company Indemnified Parties. It is understood that the Placement Agent's
responsibilities to the Company are solely contractual in nature and the
Placement Agent does not owe the Company, or any other party, any fiduciary duty
as a result of this Agreement.
11. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and the Placement Agent, as set forth in this
Agreement or made by them respectively, pursuant to this Agreement, shall remain
in full force and effect, regardless of any investigation made by or on behalf
of the Placement Agent, the Company, the Purchasers or any person controlling
any of them and shall survive delivery of and payment for the Stock.
12. NOTICES. All statements, requests, notices and agreements hereunder shall
be in writing, and:
(a) if to the Placement Agent, shall be delivered or sent by mail, telex
or facsimile transmission to XX Xxxxx & Co., LLC, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxxx Xxxxxxx, Esq.
(Fax: 000-000-0000), with a copy to: Xxxxx Raysman Xxxxxxxxx Xxxxxx &
Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx
Xxxxxxxx, Esq. (Fax: 000-000-0000).
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Illumina, Inc., 0000 Xxxxx Xxxxxx Xxxxx, Xxx
Xxxxx, Xxxxxxxxxx 00000, Attention: Xxx X. Xxxxxxx (Fax: 000-000-0000),
with a copy to: Xxxxxx Xxxxxx White & XxXxxxxxx LLP, 0000 Xxxx Xxxx Xxxx,
Xxxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx X. Xxx, Esq. (Fax:
000-000-0000).
13. DEFINITIONS OF CERTAIN TERMS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, a
legal holiday, a day on which banking institutions or trust companies are
26
authorized or obligated by law to close in New York City or any day on
which the Nasdaq National Market is not open for trading.
"EFFECTIVE DATE" shall mean each date and time that the Registration
Statement (and any post-effective amendment or amendments thereto) became
or becomes effective.
"EXECUTION TIME" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"INTERFERENCE PROCEEDING" shall have the meaning set forth in 35
U.S.C. Section 135.
"TO THE COMPANY'S KNOWLEDGE" and words of similar import shall mean
that which the Company knows or should have known using the exercise of
reasonable due diligence.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
15. PLACEMENT AGENT'S INFORMATION. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the Placement Agent's Information
consists solely of the statements concerning the Placement Agent contained in
the third paragraph under the heading "Plan of Distribution" in the Prospectus
Supplement.
16. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any
Section, paragraph or provision of this Agreement shall not affect the validity
or enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph 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.
17. GENERAL. 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. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Placement Agent.
18. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
27
If the foregoing is in accordance with your understanding of the agreement
between the Company and the Placement Agent, kindly indicate your acceptance in
the space provided for that purpose below.
Very truly yours,
ILLUMINA, INC.
By: /s/ XXX X. XXXXXXX
--------------------
Name: Xxx X. Xxxxxxx
Title: Chief Executive Officer
Accepted as of
the date first above written:
XX XXXXX & CO., LLC
By: /s/ XXXXXXX X. XXXXXXX
----------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
28
