EXHIBIT 1.1
2,585,965 SHARES
NORTHFIELD LABORATORIES INC.
SHARES OF COMMON STOCK
($.01 PAR VALUE)
PLACEMENT AGENT AGREEMENT
January 23, 2004
XX XXXXX SECURITIES CORPORATION
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 2,585,965 shares of Common Stock, $.01 par value
(the "COMMON STOCK"), of the Company. The aggregate of 2,585,965 shares so
proposed to be sold is hereinafter referred to as the "FIRM STOCK." The Company
also proposes to sell to the Purchasers, upon the terms and conditions set forth
in Section 3(b) hereof, up to an additional 646,491 shares of Common Stock (the
"OPTIONAL STOCK"). The Firm Stock and the Optional Stock are hereinafter
collectively referred to as the "STOCK." The Company hereby confirms its
agreement with XX Xxxxx Securities Corporation ("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 each 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 First 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 year, will have a term of five years and will be
exercisable at a price per share equal to the volume weighted average
closing price of our Common Stock as reported on the Nasdaq National
Market for the five trading day period immediately prior to the closing
of the Offering. 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."
2
(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. 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. Such registration statement 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 (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
3
(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 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 Statement or the Prospectus Supplement. 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 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
4
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 applicable 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.
(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
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.
5
(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 First 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 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.
(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 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.
6
(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 Statement 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 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 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.
(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.
7
(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" (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
8
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 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
(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 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.
(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.
(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
10
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 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
11
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 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.
12
(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
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 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 Statement or otherwise disclosed in writing to the
Placement Agent.
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.
13
3. THE CLOSINGS.
(a) First Closing. The completion of the initial purchase and sale
of the Firm Stock (the "FIRST CLOSING") will occur at the office of
Xxxxx & XxXxxxxx, counsel for the Company, at One Prudential Plaza, 000
Xxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx at such time (the "FIRST CLOSING
DATE") as is specified by the Company and the Placement Agent. At the
First Closing, the Company will cause the transfer agent for the Stock
to deliver to each Purchaser the number of shares of Firm Stock set
forth on the signature page to such Purchaser's Subscription Agreement
under the heading "Firm Shares" registered in the name of the Purchaser
or, if so indicated on the Stock Certificate Questionnaire attached as
Exhibit A thereto, in the name of a nominee designated by such
Purchaser.
(b) Option Closing. Pursuant to the terms of the Subscription
Agreements, each Purchaser shall have the option (the "OPTION") to
purchase the number of shares of Optional Stock set forth therein. The
Option may be exercised as to all or any part of the Optional Stock at
any time, and from time to time, not more than ninety (90) days
subsequent to the date of such Purchaser's Subscription Agreement. No
Optional Stock shall be sold and delivered to any Purchaser unless the
Firm Stock purchased by such Purchaser at the First Closing shall have
been sold and delivered. The right to purchase the Optional Stock or
any portion thereof may be surrendered and terminated at any time upon
notice by Purchaser to the Company.
The Option, if exercised, shall be exercised by written notice
(the "OPTION NOTICE") being given to the Company by the Purchaser
setting forth the number of Optional Stock to be purchased by such
Purchaser. The completion of the purchase and sale of Optional Stock
(an "OPTION CLOSING") will occur at a place and time (each, an "OPTION
CLOSING DATE", and together with the First Closing Date, the "CLOSING
DATES") to be specified by the Company and the Placement Agent, and of
which such Purchaser will be notified in advance by the Placement
Agent. Each Option Closing shall in no event be earlier than two (2)
business days nor later than five (5) business days after written
notice is given. At an Option Closing, the Company will cause the
transfer agent for the Stock to deliver to the Purchaser the number of
shares of Optional Stock set forth in the Option Notice registered in
the name of the Purchaser or, if so indicated on the Stock Certificate
Questionnaire attached as Exhibit A to the Subscription Agreement, in
the name of a nominee designated by the Purchaser.
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 Dates to the Registration Statement 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; (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
14
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) 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; (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
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.
15
(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
(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 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 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
16
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
First 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.
(h) Prior to each 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 Statement.
(i) Prior to the First 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. During the period
from the First Closing Date to the Option Closing Date, the Company
agrees 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
(a) providing the Purchasers, at the time of issuance, with a copy of
any press release or other communication so issued or (b) preparing and
filing with the Commission a Current Report on Form 8-K attaching as an
exhibit thereto any written materials relating to such press release,
communication or press conference.
(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.
17
(m) To not take any action prior to the First 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 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 (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 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 each 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.
18
(b) The Placement Agent shall not have discovered and disclosed to
the Company on or prior to such 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.
(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
applicable 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
applicable 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.
(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 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 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
19
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 each 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 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.
20
(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 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.
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, (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 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 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.
22
(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 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 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
23
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 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
24
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 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
25
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 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
26
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 Securities Corporation,
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 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 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.
27
"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 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 SECURITIES CORPORATION
By:_______________________________
Name:
Title:
29
