EXHIBIT 1.1
1,954,416 SHARES
NORTHFIELD LABORATORIES INC.
SHARES OF COMMON STOCK
($.01 PAR VALUE)
PLACEMENT AGENT AGREEMENT
May 12, 2004
XX XXXXX & CO., LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
NORTHFIELD LABORATORIES 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 1,954,416 shares of Common Stock, $.01 par value
(the "COMMON STOCK"), of the Company. The aggregate of 1,954,416 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"). So long as this
Agreement shall remain in effect, 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 so long as the fact that the Placement Agent (or its
affiliate) is a Purchaser is fully disclosed to the Company and the
Company approves such purchase of Stock 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. The
Placement Agent shall have the right, in its discretion reasonably
exercised, subject to providing prior notice to the Company, to reject any
offer to purchase Stock received by it, in whole or in part, and any such
rejection shall not be deemed a breach of its agreement contained herein.
(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 seven percent (7%) of the gross
proceeds received by the Company from the sale of the Stock on such
Closing Date. In addition, on the Closing Date (as defined below) the
Company will issue to XX Xxxxx a warrant (the "PLACEMENT AGENT'S
WARRANT"), in the form of Exhibit B attached hereto, to purchase up to the
number of shares of Common Stock equal to three percent (3%) of the
aggregate number of shares of Stock sold pursuant to this Agreement. The
Placement Agent's Warrant will not be exercisable for one (1) year, will
have a term of five years and will be exercisable at a price per share
equal to the average closing price of our Common Stock as reported on the
Nasdaq National Market for the three trading day period ending on and
including the date of this Agreement. The shares of Common Stock issuable
to XX Xxxxx upon exercise of the Placement Agent's Warrant are referred to
herein as the "WARRANT STOCK."
(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
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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. The Company and its
subsidiaries represents and warrants to, and agrees 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. 333-106615),
which became effective as of July 3, 2003, for the registration under the
Securities Act of the Stock (the "INITIAL REGISTRATION STATEMENT"). The
Company may file a registration statement increasing the amount of
securities registered under the Initial Registration Statement (a "RULE
462(b) REGISTRATION STATEMENT") pursuant to Rule 462(b) under the
Securities Act and the rules and regulations (the "RULES AND REGULATIONS")
of the Commission promulgated thereunder, which will become effective
immediately upon filing. Such Initial Registration Statement (together
with the Rule 462(b) Registration Statement, if any) meets the
requirements set forth in Rule 415(a)(1)(x) under the Securities Act and
complies in all other 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 a supplement to the form of prospectus
included in such Initial 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 Initial
Registration Statement and the Rule 462(b) Registration Statement, if any,
including the exhibits thereto, as amended at the date of this Agreement,
are hereinafter collectively called the "REGISTRATION STATEMENTS"; such
prospectus in the form in which it appears in the Initial 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 Statements, 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 Statements, 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
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and schedules and other information which is "contained," "included,"
"described," "set forth" or "stated" in the Registration Statements, 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 Statements, the Base
Prospectus or the Prospectus Supplement, as the case may be. No stop order
suspending the effectiveness of the Registration Statements 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 Initial Registration Statement (and any further documents to be
filed with the Commission, including any Rule 462(b) Registration
Statement) contains all exhibits and schedules as required by the
Securities Act. Each of the Initial Registration Statement (and the Rule
462(b) Registration Statement, if any) 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 effective 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 Statements or the Prospectus
Supplement. No post-effective amendment to the Registration Statements
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.
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There are no documents required to be filed with the Commission in
connection with the transaction contemplated hereby that have not been
filed as required pursuant to the Securities Act or 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
Statements, 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
Statements and of each consent and certificate of experts filed as a part
thereof, and conformed copies of the Registration Statements (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 Statements, copies of the
documents incorporated by reference therein and any other materials
permitted by the Securities Act.
(d) The Company and each of its subsidiaries have been duly organized 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 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 and will conform to the description thereof
contained in the Base Prospectus and the Prospectus Supplement.
(f) The Company has an authorized capitalization as set forth in the Base
Prospectus and the Prospectus Supplement, all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable and conform to the description
thereof contained in the Base Prospectus and the Prospectus Supplement
and, except as set forth in the Base Prospectus and the Prospectus
Supplement, no options, warrants or other rights to purchase, agreements
or other obligations to issue, or rights to
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convert any obligations into or exchange any securities for, shares of
capital stock of, or ownership interests in, the Company are outstanding.
(g) The Company has no subsidiaries and holds no interest in the stock or
other equity securities of any other entity.
(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 the Subscription Agreements has been duly authorized,
executed and delivered by the Company, and constitutes a valid and binding
obligation of the Company enforceable in accordance with its terms.
(i) The Company has the full right, power and authority to enter into the
Placement Agent's Warrant and to perform and discharge its obligations
thereunder. The Placement Agent's Warrant has been duly and validly
authorized by the Company and upon delivery to the Placement Agent upon
the Closing Date will be duly issued and constitute a legal, valid and
binding obligation of the Company. The Warrant Stock has been duly
authorized and reserved for issuance upon the exercise of the Placement
Agent's Warrant and when issued upon payment of the exercise price
therefor will be validly issued, fully paid and nonassessable.
(j) The execution, delivery and performance of this Agreement, the
Subscription Agreements and the Placement Agent's Warrant 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.
(k) 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 Statements, 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 Statements are accurate and complete
in all material respects.
(l) 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 and Nomination/Corporate
Governance 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
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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.
(m) 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 or in the Placement
Agent's Warrant, 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 and the Warrant Stock by the Company in the
manner contemplated herein and in the Base Prospectus and the Prospectus
Supplement.
(n) Except as described in the Base Prospectus and the Prospectus
Supplement, no person or entity has the right to require registration of
shares of Common Stock or other securities of the Company because of the
filing or effectiveness of the Registration Statements or otherwise,
except for persons and entities who have expressly waived such right or
who have been given 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 required under the terms and conditions of
any existing agreement to which the Company is a party or otherwise bound
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 180 days after the date hereof.
(o) The financial statements, together with the related notes and
schedules, of the Company included in the Base Prospectus, the Prospectus
Supplement or the Registration Statements, or incorporated by reference
therein, as the case may be, present fairly the financial condition,
results of operations and cash flows of the Company as of the dates and
for the periods indicated, comply as to form with the applicable
accounting requirements of the Securities Act and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved.
(p) 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, might have a Material Adverse Effect or would
prevent or adversely affect the ability of the Company to perform its
obligations under this Agreement or the Placement Agent's Warrant; and to
the best of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others.
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(q) The Company and each of its subsidiaries have good and marketable
title in fee simple to, or have valid rights to lease or otherwise use,
all items of real or personal property which are material to the business
of the Company and its subsidiaries taken as a whole, in each case free
and clear of all liens, encumbrances, claims and defects that may result
in a Material Adverse Effect.
(r) 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.
(s) 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.
(t) No labor problem or dispute with the employees of the Company exists
or, to the Company's knowledge, is threatened or imminent, which might 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.
(u) 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"
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(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.
(v) The Company and each of its subsidiaries is insured by insurers of
recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; all policies of insurance and fidelity or surety bonds
insuring the Company and each of its subsidiaries and their businesses,
assets, employees, officers and directors are in full force and effect;
the Company and each of its subsidiaries is in compliance with the terms
of such policies and instruments in all material respects; and there are
no claims by the Company and each of its subsidiaries under any such
policy or instrument as to which any insurance company is denying
liability or defending under a reservation of rights clause; the Company
and each of its subsidiaries has not been refused any insurance coverage
sought or applied for; and the Company and each of its subsidiaries has no
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that would not have a Material Adverse Effect, except as set forth in
the Base Prospectus or the Prospectus Supplement.
(w) The Company and each of its subsidiaries has made all filings,
applications and submissions required by, and possesses all approvals,
licenses, certificates, certifications, clearances (including, without
limitation, clearance from the FDA to proceed with a Phase III
pre-hospital trial with PolyHeme(R), the Company's oxygen-carrying blood
substitute, subject to obtaining institutional review board approval at
the trial sites participating in the Company's clinical trials and
compliance with the FDA's public notice and other requirements for
conducting clinical trials pursuant to a waiver of informed consent),
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"), except for
such Permits which the failure to obtain would not have a Material Adverse
Effect, and is in compliance with the terms and conditions of all such
Permits; all of such Permits held by the Company and each of its
subsidiaries are valid and in full force and 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
9
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.
(x) KPMG 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 Statements, 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.
(y) 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.
(z) There is and has been no failure on the part of the Company or any of
the Company's directors or officers, in their capacities as such, to
comply in all material respects with any provision of the Xxxxxxxx-Xxxxx
Act of 2002 and the rules and regulations promulgated in connection
therewith (the "XXXXXXXX-XXXXX ACT"), including Section 402 related to
loans and Sections 302 and 906 related to certifications.
(aa) 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 the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(bb) 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 might in the future reasonably be expected to cause or result in,
stabilization or manipulation of the price of any security of the Company.
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(cc) 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.
(dd) 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.
(ee) 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 best of the
Company's knowledge, there is no infringement by third parties of any such
Intellectual Property; (c) there is no pending or, to the best of 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 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 best of the
11
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; (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; and (g) the Company and its subsidiaries have taken all steps
necessary to perfect its ownership of the Intellectual Property.
(ff) The clinical, pre-clinical and other studies and tests conducted by
or on behalf of or sponsored by the Company and its subsidiaries were and,
if still pending, are being conducted in accordance with all statutes,
laws, rules and regulations, as applicable (including, without limitation,
those administered by the FDA or by any foreign, federal, state or local
governmental or regulatory authority performing functions similar to those
performed by the FDA). The descriptions of the results of such studies and
tests are accurate and complete in all material respects and fairly
present the published data derived from such studies and tests, and the
Company has no knowledge of other studies or tests the results of which
are inconsistent with or otherwise call into question the results
described or referred to in the Base Prospectus and the Prospectus
Supplement, except as described in the Base Prospectus and the Prospectus
Supplement. Neither the Company nor any of its subsidiaries has received
any notices or other correspondence from the FDA or any other foreign,
federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA with respect to any
ongoing clinical or pre-clinical studies or tests requiring the
termination, suspension or material modification of such studies or tests.
(gg) The Company has established and administers a compliance program
(including a written compliance policy) applicable to the Company, to
assist the Company and the directors, officers and employees of the
Company in complying with applicable regulatory guidelines (including,
without limitation, those administered by the FDA and any other foreign,
federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA).
(hh) Neither the Company nor any of its subsidiaries has failed to file
with the applicable regulatory authorities (including, without limitation,
the FDA or any foreign, federal, state or local governmental or regulatory
authority performing functions similar to those performed by the FDA) any
material required filing, declaration, listing, registration, report or
submission; all such filings, declarations, listings, registrations,
reports or submissions were in material compliance with applicable laws
when filed and, except as referred to or described in the Base Prospectus
or the Prospectus Supplement, no deficiencies have been asserted by any
applicable regulatory authority (including, without limitation, the FDA or
any foreign, federal, state or local governmental or regulatory authority
performing functions similar to those
12
performed by the FDA) with respect to any such filings, declarations,
listings, registrations, reports or submissions.
(ii) 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
to be described in the Base Prospectus and the Prospectus Supplement and
which is not so described.
(jj) 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.
(kk) 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.
(ll) 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.
(mm) 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 Statements, 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 or contemplated by the Base Prospectus and the
Prospectus Supplement; and, since such date, there has not been any change
in the capital stock or long-term debt of the Company or any material
adverse change, or any development involving a prospective material
adverse change, in or affecting the business, general affairs, management,
financial position, stockholders' equity, results of operations or
prospects of the Company, otherwise than as set forth or contemplated by
the Base Prospectus and the Prospectus Supplement.
(nn) The Stock is duly listed and admitted and authorized for trading,
subject to official notice of issuance, on the Nasdaq National Market.
(oo) There are no affiliations with the NASD among the Company's officers,
directors or, to the best of the knowledge of the Company, any five
percent or greater stockholder of the Company, except as set forth in the
Base Prospectus, the Prospectus Supplement or the Registration Statements
or otherwise disclosed in writing to the Placement Agent.
13
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 11:00 A.M., local time, on May 18, 2004 (the "CLOSING DATE") at the
office of Xxxxx & XxXxxxxx, counsel for the Company, at One Prudential Plaza,
000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx.
4. Further Agreements of the Company. The Company agrees with the Placement
Agent and the Purchasers:
(a) (i) to prepare the Rule 462(b) Registration Statement, if necessary,
in a form approved by the Placement Agent and in accordance with the
Securities Act, and file such Rule 462(b) Registration Statement with the
Commission on or prior to the date hereof; (ii) to make no further
amendment or supplement prior to the Closing Date to the Registration
Statements or any amendment or supplement to the Prospectus Supplement,
which shall be reasonably disapproved by the Placement Agent in good faith
promptly after reasonable notice thereof; (iii) 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 Statements 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; (iv) 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 pursuant to Section 13(a), 15
or 15(d) of the Exchange Act 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; (v) to advise the
Placement Agent, promptly after it receives notices thereof, (x) of any
request by the Commission to amend the Registration Statements 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 Statements or any post-effective
amendment thereto or any order directed at any 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
Statements or Prospectus Supplement or for additional information; and
(vi) 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.
14
(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 Initial 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 Initial 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 each of the Registration Statements 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 Statements as originally filed with
the Commission and each amendment thereto (in each case excluding
exhibits), (ii) the Base Prospectus, (iii) the Prospectus Supplement (not
later than 10:00 A.M., New York time, on the Business Day following the
execution and delivery of this Agreement) and any amendment or supplement
thereto (not later than 10:00 A.M., New York City time, on the Business
Day following the date of such amendment or supplement); and (iv) any
document 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 Initial 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
15
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 National Association of Securities Dealers, Inc. ("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, to submit to taxation in any
jurisdiction 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 60 days from the date of the Prospectus Supplement
without the prior written consent of XX Xxxxx, other than (i) the
Company's sale of the Stock and the issuance of the Placement Agent's
Warrant hereunder, (ii) the issuance of Common Stock pursuant to the
exercise of currently outstanding stock options, (iii) the issuance of
Common Stock, stock options, stock appreciation rights or other securities
or rights to the Company's directors, officers, employees, consultants or
agents pursuant to the Company's existing equity compensation plans and
(iv) the issuance of Common Stock, stock options, stock appreciation
rights or other securities or rights to the Company's directors, officers,
employees, consultants or agents pursuant to equity incentive compensation
plans adopted or approved by the board of directors of the Company after
the date of this Agreement consistent with past practice. 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 C 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, without 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, then, to the extent Rule
2711(f)(4) of the rules and regulations of the NASD is applicable to the
Company, 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
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 Statements.
16
(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.
(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.
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 Statements, 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 (including related reasonable fees and expenses of counsel for the
Placement Agent) 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
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); provided that, except as otherwise
provided in this Section 5 and in
17
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
Statements 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 Statements, the Base Prospectus or the Prospectus
Supplement or otherwise) shall have been complied with to the reasonable
satisfaction of the Placement Agent. The Rule 462(b) Registration
Statement, if any, and any other 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 such Closing Date that the Registration Statements,
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 Statements, 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 Xxxxx & XxXxxxxx, counsel
for the Company, such counsel's written opinion and statement, 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, substantially as set forth in Exhibit D attached hereto.
(e) 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 Statements, the Base Prospectus, the
18
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.
(f) The Company shall have furnished to the Placement Agent and the
Purchasers a certificate, dated as of such 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 Statements, the Base Prospectus and the
Prospectus Supplement and, in their opinion, each 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 Initial
Registration Statement no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statements, the
Base Prospectus or the Prospectus Supplement, (iii) to the best of their
knowledge after reasonable investigation, as of such 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 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 such Closing Date, and (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 change, or any 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.
(g) At the time of the execution of this Agreement, the Placement Agent
shall have received from KPMG LLP a letter, addressed to the Placement
Agent and the Purchasers and 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.
(h) On the Closing Date, the Placement Agent shall have received a letter
(the "BRING-DOWN LETTER") from KPMG 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
19
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(g).
(i) (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 reasonable 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.
(j) The Stock and Warrant Stock shall have been listed and admitted and
authorized for trading on the Nasdaq National Market, and satisfactory
evidence of such actions shall have been provided to the Placement Agent.
(k) At the Execution Time, the Company shall have furnished to the
Placement Agent a letter substantially in the form of Exhibit C hereto
from each executive officer and director of the Company.
(l) 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, or 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 such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the
financial markets in the United States shall be such) as to make it, in
the sole judgment of the Placement Agent, impracticable or inadvisable to
proceed
20
with the sale or delivery of the Stock on the terms and in the manner
contemplated by the Base Prospectus and the Prospectus Supplement.
(m) 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 such 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.
(n) 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.
(o) The Company shall have entered into Subscription Agreements with each
of the Purchasers and such agreements shall be in full force and effect.
(p) The Company shall have issued and delivered the Placement Agent's
Warrant to XX Xxxxx.
(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.
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 Statements 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 Statements 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, (iii) any breach of the representations
and warranties of the Company contained herein or (iv) any act or failure
to act, or any alleged act or failure to act, by the Placement Agent in
connection with, or relating in any manner to, the Stock or the Offering
contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability or action arising out of or based upon
matters
21
covered by clause (i), (ii) or (iii) above; (provided that the Company
shall not be liable in the case of any matter covered by this clause (iv)
to the extent that it is determined in a final judgment by a court of
competent jurisdiction that such loss, claim, damage, liability or action
resulted directly from any such act or failure to act undertaken or
omitted to be taken by such Placement Agent through its gross negligence
or willful misconduct) 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 Statements 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 Statements or the Prospectus Supplement or in any amendment
or supplement thereto, (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 with respect to each of clause
(i) and this clause (ii) 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, or (iii)
any act or failure to act, or any alleged act or failure to act, by the
Placement Agent in connection with, or relating in any manner to, the
Stock or the Offering contemplated hereby to the extent that it is
determined in a final judgment by a court of competent jurisdiction that
such loss, claim, damage, liability or action resulted directly from any
such act or failure to act undertaken or omitted to be taken by such
Placement Agent through its gross negligence or willful misconduct, 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
22
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 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
23
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 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
24
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 the amount by which the total price at which the Stock
was offered and sold to the public less 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. This Agreement may be terminated by the Placement Agent in its
absolute discretion by notice given to the Company if: (a) at any time after the
execution and delivery of this Agreement and prior to the Closing Date: (i)
trading or quotation in any of the Company's securities shall have been
suspended or limited by the Commission or by the NASD, or trading in securities
generally on the Nasdaq National Market or the New York Stock Exchange, shall
have been suspended or limited, or minimum or maximum prices shall have been
generally established on any of such stock exchanges by the Commission or the
NASD; (ii) a general banking moratorium shall have been declared by any United
States federal, New York or Illinois authorities; (iii) there should develop,
occur or come into effect or existence any event, action, state, condition or
major financial occurrence of national or international consequence, or any
outbreak or escalation of national or international hostilities or any crisis or
calamity, including, without limitation, related to terrorist activity, or any
change in the United States or international financial markets, or any
substantial change in the United States' or international political, financial
or economic conditions, or in any law or regulation, as in the judgment of the
Placement Agent seriously adversely affects or will seriously and adversely
affect the financial markets or the business, operations or affairs of the
Company; (iv) in the judgment of the Placement Agent there shall have occurred
any Material Adverse Effect; or (v) the Company shall have sustained a loss by
strike, fire, flood, earthquake, accident or other calamity of such character as
may interfere materially with the conduct of the business and operations of the
Company regardless of whether or not such loss shall have been insured; or (b)
in the case of any of the events specified Sections 6(i) or 6(l), such event
singly or together with any other event, makes it, in the Placement
25
Agent's judgment, impracticable or inadvisable to market the Stock in the manner
and on the terms contemplated in the Base Prospectus and the Prospectus
Supplement. Any termination pursuant to this Section 8 shall be without
liability on the part of any party hereto to any other party except that the
provisions of Sections 5, 7 and 9 shall at all times be effective and shall
survive such termination.
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 reasonable out-of-pocket expenses (including reasonable fees
and disbursements of counsel) 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
responsibility to the Company is 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, 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).
26
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Northfield Laboratories Inc., 0000 Xxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000-0000, Attention: Xxxxxx X.
Xxxxx, M.D. (Fax: 000-000-0000), with a copy to: Xxxxx & XxXxxxxx, One
Prudential Plaza, 000 Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000,
Attention: Xxxxx Xxxxxx, 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
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
Statements (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 first 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
27
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.
28
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,
NORTHFIELD LABORATORIES INC.
By:______________________________
Name:
Title:
Accepted as of
the date first above written:
XX XXXXX & CO., LLC
By:_______________________________
Name:
Title:
29
