EXHIBIT 1.1
1,500,000 Shares
AASTROM BIOSCIENCES, INC.
COMMON STOCK
PLACEMENT AGREEMENT
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, 1997
▇▇▇▇▇ & COMPANY
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
1. Introductory. Aastrom Biosciences, Inc., a Michigan corporation (the
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``Company''), hereby engages ▇▇▇▇▇ & Company (the ``Agent'') upon the terms and
conditions set forth herein, as the Company's agent in connection with the
proposed offering to the entities identified on Exhibit A of the number of
shares set forth opposite such entity's name on Exhibit A (the ``Specified
Placement Shares'') of the Company's authorized but unissued common stock, no
par value (the ``Common Stock'').
2. Representations and Warranties of the Company. The Company represents
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and warrants to, and agrees with, the Agent that:
(a) A registration statement on Form S-1 (File No. 333- )
in the form in which it became or becomes effective and also in such
form as it may be when any post-effective amendment thereto shall
become effective with respect to the Specified Placement Shares,
including any preeffective prospectuses included as part of the
registration statement as originally filed or as part of any amendment
or supplement thereto, or filed pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"), and the
rules and regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") thereunder, copies of which
have heretofore been delivered to you, has been carefully prepared by
the Company in conformity with the requirements of the Securities Act
and has been filed with the Commission under the Securities Act; one
or more amendments to such registration statement, including in each
case an amended preeffective prospectus, copies of which
amendments have heretofore been delivered to you, have been so
prepared and filed. The term "Registration Statement" means the
registration statement as amended at the time it became or becomes
effective, including the information (if any) deemed to be a part of
the registration statement at the time of effectiveness pursuant to
Rule 430 of the Rules and Regulations. However, if it is
contemplated, at the time this Agreement is executed, that a post-
effective amendment to the registration statement will be filed and
must be declared effective before the offering of the Specified
Placement Shares may commence, the term "Registration Statement" as
used in this Agreement means the registration statement as amended by
said post-effective amendment. The term "Registration Statement" as
used in this Agreement shall also include any registration statement
relating to the Specified Placement Shares that is filed and declared
effective pursuant to Rule 462(b) under the Securities Act. The term
"Prospectus" as used in this Agreement means the prospectus in the
form included in the Registration Statement, or, (A) if the prospectus
included in the Registration Statement omits information in reliance
on Rule 430A under the Securities Act and such information is included
in a prospectus filed with the Commission pursuant to Rule 424(b)
under the Securities Act, the term "Prospectus" as used in this
Agreement means the prospectus in the form included in the
Registration Statement as supplemented by the addition of the Rule
430A information contained in the prospectus filed with the Commission
pursuant to Rule 424 (b) and (B) if prospectuses that meet the
requirements of Section 10(a) of the Securities Act are delivered
pursuant to Rule 434 under the Securities Act, then (i) the term
"Prospectus" as used in this Agreement means the "prospectus subject
to completion" (as such term is defined in Rule 434(g) under the
Securities Act) as supplemented by (a) the addition of Rule 430A
information or other information contained in the form of prospectus
delivered pursuant to Rule 434(b)(2) under the Securities Act or (b)
the information contained in the term sheets described in Rule
434(b)(3) under the Securities Act, and (ii) the date of such
prospectuses shall be deemed to be the date of the term sheets. The
term "Preeffective Prospectus" as used in this Agreement means the
prospectus subject to completion in the form included in the
Registration Statement at the time of the initial filing of the
Registration Statement with the Commission, and as such prospectus
shall have been amended from time to time prior to the date of the
Prospectus.
(b) The Commission has not issued or, to the knowledge of the
Company, threatened to issue any order preventing or suspending the
use of any Preeffective Prospectus, and, at its date of issue, each
Preeffective Prospectus conformed in all material respects with the
requirements of the Securities Act and did not include 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, in
light of the circumstances under which they were made, not misleading;
and, when the Registration Statement becomes effective and at all
times subsequent thereto up to and including the Closing Date, the
Registration Statement and the Prospectus and any amendments or
supplements thereto contained and will contain all
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material statements and information required to be included therein by
the Securities Act and conformed and will conform in all material
respects to the requirements of the Securities Act and neither the
Registration Statement nor the Prospectus, nor any amendment or
supplement thereto, included or will include any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that the foregoing representations, warranties and agreements
shall not apply to information contained in or omitted from any
Preeffective Prospectus or the Registration Statement or the
Prospectus or any such amendment or supplement thereto in reliance
upon, and in conformity with, written information furnished to the
Company by or on behalf of the Agent, directly or through you,
specifically for use in the preparation thereof; there is no
franchise, lease, contract, agreement or document required to be
described in the Registration Statement or Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or
filed therein as required; and all descriptions of any such
franchises, leases, contracts, agreements or documents contained in
the Registration Statement are accurate and complete descriptions of
such documents in all material respects.
(c) Subsequent to the respective dates as of which information
is given in the Registration Statement and Prospectus, and except as
set forth or contemplated in the Prospectus, the Company has not
incurred any material liabilities or obligations, direct or
contingent, nor entered into any material transactions (in all cases
other than in the ordinary course of business), and there has not been
any material adverse change in the condition (financial or otherwise),
properties, business, management, prospects, net worth (other than
ordinary course changes) or results of operations of the Company or
any change in the capital stock, short-term or long-term debt of the
Company.
(d) The financial statements, together with the related notes
and schedules, set forth in the Prospectus and elsewhere in the
Registration Statement fairly present, on the basis stated in the
Registration Statement, the financial position and the results of
operations and changes in financial position of the Company at the
respective dates or for the respective periods therein specified.
Such statements and related notes and schedules have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis except as may be set forth in the Prospectus.
(e) Price Waterhouse LLP, who have expressed their opinions on
the audited financial statements and related schedules included in the
Registration Statement and the Prospectus are independent public
accountants as required by the Securities Act and the Rules and
Regulations.
(f) The Company has been duly organized and is validly existing
and in good standing as a corporation under the laws of the state of
Michigan, with
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power and authority (corporate and other) to own or lease its
properties and to conduct its business as described in the Prospectus;
except as otherwise described in the Prospectus, the Company is in
possession of and operating in compliance with all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates
and orders required for the conduct of its business as contemplated by
the Prospectus, all of which are valid and in full force and effect,
expect for such franchises, grants, authorizations, licenses, permits,
easements, consents, certificates or orders the absence of which,
alone or in the aggregate, do not or would not have a material adverse
effect on the Company; and the Company is duly qualified to do
business and in good standing as a foreign corporation in all other
jurisdictions where its ownership or leasing of properties or the
conduct of its business requires such qualification, except where the
failure to be so qualified would not have a material adverse effect on
the Company. The Company has all requisite power and authority, and
all necessary consents, approvals, authorizations, orders,
registrations, qualifications, licenses and permits of and from all
public regulatory or governmental agencies and bodies to own, lease
and operate its properties and conduct its business as now being
conducted and as described in the Prospectus, and no such consent,
approval, authorization, order, registration, qualification, license
or permit contains a materially burdensome restriction not adequately
disclosed in the Registration Statement and the Prospectus. The
Company does not own or control, directly or indirectly, any other
corporations, associations or other entities.
(g) The Company's authorized and outstanding capital stock is on
the date hereof, and will be on the Closing Date, as set forth under
the caption "Capitalization" in the Prospectus (excluding such changes
as result solely from the exercise, after the date hereof, of options
outstanding on the date hereof); the outstanding shares of common
stock (including the outstanding shares of the Specified Placement
Shares) of the Company conform to the description thereof in the
Prospectus and have been duly authorized and validly issued and are
fully paid and nonassessable; and have been issued in compliance with
all federal and state securities laws and were not issued in violation
of or subject to any preemptive rights or similar rights to subscribe
for or purchase securities (except such rights as have been validly
waived). Except as disclosed in and or contemplated by the
Registration Statement and the Prospectus and the financial
statements of the Company and related notes thereto included in the
Prospectus, the Company does not have outstanding any options or
warrants to purchase, or any preemptive rights or other rights to
subscribe for or to purchase any securities or obligations convertible
into, or any contracts or commitments to issue or sell, shares of its
capital stock or any such options, rights, convertible securities or
obligations, except for options granted subsequent to the date of
information provided in the Prospectus pursuant to the Company's
employee and stock option plans as disclosed in the Prospectus. The
description of the Company's stock option and other stock plans or
arrangements, and the options or other rights granted or exercised
thereunder, as set forth in the Prospectus, accurately and
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fairly presents in all material respects the information required to
be shown with respect to such plans, arrangements, options and rights.
(h) The Specified Placement Shares to be issued and sold by the
Company to the Agent hereunder have 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 in the Prospectus.
(i) Except as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company is a party or of
which any property of the Company is subject, which, if determined
adversely to the Company might individually or in the aggregate (i)
prevent or adversely affect the transactions contemplated by this
Agreement, (ii) suspend the effectiveness of the Registration
Statement, (iii) prevent or suspend the use of the Preeffective
Prospectus in any jurisdiction or (iv) result in a material adverse
change in the condition (financial or otherwise), properties,
business, management, prospects, net worth or results of operations of
the Company; and to the best of the Company's knowledge no such
proceedings are threatened or contemplated against the Company by
governmental authorities or others. The Company is not a party nor
subject to the provisions of any material injunction, judgment, decree
or order of any court, regulatory body or other governmental agency or
body. The description of the Company's litigation under the heading
"Legal Proceedings" in the Prospectus is true and correct and complies
with the Rules and Regulations.
(j) The execution, delivery and performance of this Agreement
and the consummation of the transactions herein contemplated will not
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,
note or other agreement or instrument to which the Company is a party
or by which it or any of its properties is or may be bound other than
any such indenture, mortgage, deed of trust, note or other agreement
or instrument which, alone or in the aggregate, is not material to the
Company, the Articles of Incorporation, By-laws or other
organizational documents of the Company, or any law, order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its properties, other than any
such law, order, rule or regulation which, alone or in the aggregate,
is not material to the Company, or will result in the creation of a
lien.
(k) No consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation by the
Company of the transactions contemplated by this Agreement, except
such as may be required by the National Association of Securities
Dealers, Inc. (the "NASD") or under the Securities Act or the
securities or "Blue Sky" laws of any jurisdiction in connection with
the purchase and distribution of the Specified Placement Shares
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by the Agent, all of which requirements have been satisfied in all
material respects.
(l) The Company has the full corporate power and authority to
enter into this Agreement and to perform its obligations hereunder
(including to issue, sell and deliver the Specified Placement Shares),
and this Agreement has been duly and validly authorized, executed and
delivered by the Company and is a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that rights to indemnity and contribution
hereunder may be limited by federal or state securities laws or the
public policy underlying such laws and except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws relating to or affecting creditors' rights generally or
by general equitable principles.
(m) The Company is in all material respects in compliance with,
and conducts its business in conformity with, all applicable federal,
state, local and foreign laws, rules and regulations or any court or
governmental agency or body; to the knowledge of the Company,
otherwise than as set forth in the Registration Statement and the
Prospectus, no prospective change in any of such federal or state
laws, rules or regulations has been adopted which, when made
effective, would have a material adverse effect on the operations of
the Company.
(n) The Company has filed all necessary federal, state, local
and foreign income, payroll, franchise and other tax returns, subject
to allowable extension periods, and has paid all taxes shown as due
thereon or with respect to any of its properties, and there is no tax
deficiency that has been, or to the knowledge of the Company is likely
to be, asserted against the Company or any of its properties or assets
that would materially adversely affect the financial position,
business or operations of the Company.
(o) Except as disclosed in the Registration Statement and the
Prospectus, the Company is in compliance with all applicable existing
federal, state, local and foreign laws and regulations relating to the
protection of human health or the environment or imposing liability or
requiring standards of conduct concerning any Hazardous Materials
("Environmental Laws"), except for such instances of noncompliance
which, either singly or in the aggregate, would not have a material
adverse effect on the Company. The term "Hazardous Material" means
(i) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, (ii) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act, as amended, (iii) any petroleum or
petroleum product, (iv) any polychlorinated biphenyl and (v) any
pollutant or contaminant or hazardous, dangerous or toxic chemical,
material, waste or substance regulated under or within the meaning of
any other Environment Law.
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(p) No person or entity has the right to require registration,
as part of the Registration Statement, 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, 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 or who
are not entitled to participate due to properly invoked cut-back
rights of the Company.
(q) Neither the Company nor, to the Company's best knowledge
after reasonable inquiry, any of its 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.
(r) The Company has provided you with all financial statements
of the Company requested by the Agent.
(s) The Company owns or possesses license rights to all patents,
trademarks, trademark registrations, service marks, service ▇▇▇▇
registrations, tradenames, copyrights, licenses, inventions, trade
secrets and rights as described in the Prospectus as being owned or
licensed by it, as being proprietary to the Company or, except as
described in the Prospectus, as necessary for the conduct of its
business as presently conducted or contemplated by the Prospectus, and
the Company is not aware of any claim to the contrary or any challenge
by any other person to the rights of the Company with respect to the
foregoing. Without limiting the foregoing, each of the license
agreement between the Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ dated July 17,
1992 and relating to U.S. Patent No. 4,839,292, Canadian Patent No.
1,306,714 and European Patent Convention Patent No. 0.307.048 and the
license agreement between the Company and the University of Michigan
dated March 13, 1992, as amended, and relating to U.S. Patent No.
4,839,292, is a valid and binding agreement of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and
of the University of Michigan, respectively, enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditors' rights generally or by general equitable
principles; and the Company is not in material breach or violation of
any of the terms or provisions of either such agreement, and to the
Company's knowledge, no default exists under either such agreement.
Except as described in the Prospectus, the Company's business as now
conducted and as proposed to be conducted does not and will not
infringe or conflict with in any material respect patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses or
other intellectual property or franchise right existing on the date
hereof of any person. Except as described in the Prospectus, no claim
has been made against the Company alleging the infringement by the
Company of any patent, trademark, service ▇▇▇▇, tradename,
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copyright, trade secret, license in or other intellectual property
right or franchise right of any person.
(t) The Company has performed all material obligations currently
required to be performed by it under all contracts required by Item
601(b)(10) of Regulation S-K under the Securities Act to be filed as
exhibits to the Registration Statement, and neither the Company nor,
to the Company's knowledge, any other party to such contract is in
default under or in breach of any such obligations. The Company has
not received any notice of such default or breach.
(u) The Company is not involved in any labor dispute nor is any
such dispute threatened. The Company is not aware that (A) any
executive, key employee or significant group of employees of the
Company plans to terminate employment with the Company or (B) any such
executive or key employee is subject to any noncompete, nondisclosure,
confidentiality, employment, consulting or similar agreement that
would be violated by the present or proposed business activities of
the Company. The Company does not have or expect to have any
liability for any prohibited transaction or funding deficiency or any
complete or partial withdrawal liability with respect to any pension,
profit sharing or other plan which is subject to the "Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), to which
the Company makes or ever has made a contribution and in which any
employee of the Company is or has ever been a participant. With
respect to such plans, the Company is in compliance in all material
respects with all applicable provisions of ERISA.
(v) The Company has obtained the written agreement described in
Section 9(n) of this Agreement from each of its officers and
directors.
(w) The Company has and the Company as of the Closing Date will
have, good and marketable title in fee simple to all real property and
good and marketable title to all personal property owned or proposed
to be owned by it which is material to the business of the Company, in
each case free and clear of all liens, encumbrances and defects except
such as are described the Prospectus or such as would not have a
material adverse effect on the Company; and any real property and
buildings and personal property held under lease by the Company or
proposed to be held after giving effect to the transactions described
in the Prospectus are, or will be as of the Closing Date, held by it
under valid, subsisting and enforceable leases with such exceptions as
would not have a material adverse effect on the Company, in each case
except as described in or contemplated by the Prospectus.
(x) The Company is insured by Chubb Insurance Company, CNA
Insurance Companies and UniEurope against such losses and risks and in
such amounts as are customary in the businesses in which it is engaged
or proposes to engage after giving effect to the transactions
described in the Prospectus; and the Company does not have any reason
to believe that it will not be able to renew its
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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 materially and
adversely affect the condition, financial or otherwise, or the
earnings, business or operations of the Company except as described in
or contemplated by the Prospectus.
(y) Other than as contemplated by this Agreement, there is no
broker, finder or other party that is entitled to receive from the
Company any brokerage or finder's fee or other fee or commission as a
result of any of the transactions contemplated by this Agreement.
(z) The Company has complied with all provisions of Section
517.075 Florida Statutes (Chapter 92-198; Laws of Florida).
(aa) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(ab) To the Company's knowledge, neither the Company nor any
employee or agent of the Company has made any payment of funds of the
Company or received or retained any funds in violation of any law,
rule or regulation, which payment, receipt or retention of funds is of
a character required to be disclosed in the Prospectus.
(ac) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
(ad) Each certificate signed by any officer of the Company and
delivered to the Agent or counsel for the Agent shall be deemed to be
a representation and warranty by the Company as to the matters covered
thereby.
(ae) The letter agreement between the Company and Cobe
Laboratories, Inc. ("Cobe") dated November 11, 1996 (the "Cobe
Agreement") is a valid and binding agreement of Cobe, enforceable in
accordance with its terms; and the Company is not in material breach
or violation of any of the terms or provisions of such agreement, and
to the Company's knowledge, no default exists under such agreement.
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(af) No transfer taxes are required to be paid in connection with
the sale and delivery of the Specified Placement Shares hereunder.
(ag) The Specified Placement Shares have been duly authorized,
upon official notice of issuance, for quotation on the Nasdaq National
Market.
3. Representations and Warranties of the Agent. The Agent
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represents and warrants to the Company that (A) it is duly registered as a
broker/dealer pursuant to the Securities Exchange Act of 1934 and is a member in
good standing of the National Association of Securities Dealers, Inc. (the
"NASD"), (B) it is licensed and qualified as a broker/dealer in each
jurisdiction in which the Agent offers, or has offered any of the Specified
Placement Shares, including without limitation, each jurisdiction in which the
entities listed on Exhibit A are located, (C) its participation in the offering
and sale of the Specified Placement Shares will be in accordance with the
provisions of the Act, the regulations promulgated pursuant thereto, all other
regulations of the Commission, and the rules and regulations of the NASD, and
(D) it has not distributed and will not distribute prior to the Closing Date any
offering material in connection with the offering and sale of the Specified
Placement Shares, or any other shares, other than the Preliminary Prospectus,
the Registration Statement and other materials permitted by the Act.
4. Purchase Sale and Delivery of the Specified Placement Shares.
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The purchase price per share to be paid by the several purchasers to the Company
shall be determined by seperate agreement among the Company and the purchasers.
The Company agrees to pay the Agent at the Closing Date a commission on each
Specified Placement Shares sold equal to 6% of the purchase price.
The Agent acknowledges and agrees that the Company is under no
obligation to sell, or attempt to sell, any of the Specified Placement Shares,
and that the Company shall have no liability to you as a result of the Company's
failure to sell any of the Specified Placement Shares.
Delivery of certificates for the Specified Placement Shares shall be
made as agreed by the purchasers and the Company.
5. Covenants and Agreements of the Company. The Company covenants
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and agrees with the Agent that:
(a) The Company will (i) if the Company and the Agent have
determined not to proceed pursuant to Rule 430A, use its best efforts
to cause the Registration Statement to become effective, (ii) if the
Company and the Agent have determined to proceed pursuant to Rule
430A, use its best efforts to comply with the provisions of and make
all requisite filings with the Commission pursuant to Rule 430A and
Rule 424 of the Rules and Regulations and (iii) if the Company and the
Agent have determined to deliver Prospectuses pursuant to Rule 434 of
the Rules and Regulations, to use its best efforts to comply with all
the applicable provisions thereof. The Company will advise the Agent
promptly as
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to the time at which the Registration Statement becomes effective,
will advise the Agent promptly of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration
Statement or of the institution of any proceedings for that purpose,
and will use its best efforts to prevent the issuance of any such stop
order and to obtain as soon as possible the lifting thereof, if
issued. The Company will advise the Agent promptly of the receipt of
any comments of the Commission or any request by the Commission for
any amendment of or supplement to the Registration Statement or the
Prospectus or for additional information and will not at any time file
any amendment to the Registration Statement or supplement to the
Prospectus which shall not previously have been submitted to the Agent
a reasonable time prior to the proposed filing thereof or to which the
Agent shall reasonably object in writing or which is not in compliance
with the Securities Act and the Rules and Regulations.
(b) The Company will prepare and file with the Commission,
promptly upon the request of the Agent, any amendments or supplements
to the Registration Statement or the Prospectus which in the
reasonable opinion of the Agent may be necessary to enable the Agent
to continue the distribution of the Specified Placement Shares and
will use its best efforts to cause the same to become effective as
promptly as possible.
(c) If at any time after the effective date of the Registration
Statement when a prospectus relating to the Specified Placement Shares
is required to be delivered under the Securities Act, including under
the Rules and Regulations, any event relating to or affecting the
Company occurs as a result of which the Prospectus or any other
prospectus as then in effect would include an untrue statement of a
material fact, or omit to state any material fact necessary to make
the statements therein, in light of the circumstances under which they
were made, not misleading, or if it is necessary at any time to amend
the Prospectus to comply with the Securities Act, the Company will
promptly notify the Agent thereof and will prepare an amended or
supplemented prospectus which will correct such statement or omission;
and in case the Agent is required to deliver a prospectus relating to
the Specified Placement Shares nine (9) months or more after the
effective date of the Registration Statement, the Company upon the
request of the Agent and at the expense of such Agent will prepare
promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10(a)(3) of the Securities
Act.
(d) The Company will deliver to the Agent, at or before the
Closing Date, copies of the Registration Statement, as originally
filed with the Commission, and all amendments thereto including all
financial statements and exhibits thereto and will deliver to the
Agent such number of copies of the Registration Statement, including
such financial statements but without exhibits, and all amendments
thereto, as the Agent may reasonably request. The Company will
deliver or mail to or upon the order of the Agent, from time to time
until the effective date of the Registration Statement, as many copies
of the Preeffective
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Prospectus as the Agent may reasonably request. The Company will
deliver or mail to or upon the order of the Agent on the date of the
public offering, and thereafter from time to time during the period
when delivery of a prospectus relating to the Specified Placement
Shares is required under the Securities Act, including under the Rules
and Regulations, as many copies of the Prospectus, in final form or as
thereafter amended or supplemented as the Agent may reasonably
request; provided, however, that the expense of the preparation and
delivery of any prospectus required for use nine (9) months or more
after the effective date of the Registration Statement shall be borne
by the Agent required to deliver such prospectus.
(e) The Company will make generally available to its shareholders
as soon as practicable, but not later than fifteen (15) months after
the effective date of the Registration Statement, an earnings
statement which will be in reasonable detail (but which need not be
audited) and which will comply with Section 11(a) of the Securities
Act, covering a period of at least twelve (12) months beginning after
the "effective date" (as defined in Rule 158 under the Securities Act)
of the Registration Statement.
(f) The Company will cooperate with the Agent to enable the
Specified Placement Shares to be registered or qualified for offering
and sale by dealers under the securities laws of such jurisdictions as
the Agent may reasonably designate and at the request of the Agent
will make such applications and furnish such consents to service of
process or other documents as may be required of it as the issuer of
the Specified Placement Shares for that purpose; provided, however,
that the Company shall not be required to qualify to do business or to
file a general consent (other than that arising out of the offering or
sale of the Specified Placement Shares) to service of process in any
such jurisdiction where it is not now so subject. The Company will,
from time to time, prepare and file such statements and reports as are
or may be required of it as the issuer of the Specified Placement
Shares to continue such qualifications in effect for so long a period
as the Agent may reasonably request for the distribution of the
Specified Placement Shares. The Company will advise the Agent
promptly after the Company becomes aware of the suspension of the
qualifications or registration of (or any such exception relating to)
the Specified Placement Shares of the Company for offering, sale or
trading in any jurisdiction or of any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of
any orders suspending such qualifications, registration or exception,
the Company will, with the cooperation of the Agent use its best
efforts to obtain the withdrawal thereof.
(g) The Company will furnish to its shareholders annual reports
containing financial statements certified by independent public
accountants and will make available to its shareholders quarterly
summary financial information in reasonable detail which may be
unaudited. During the period of five (5) years from the date hereof,
the Company will deliver to the Agent and, upon request,
-12-
as soon as they are available, copies of each annual report of the
Company and each other report furnished by the Company to its
shareholders and will deliver to the Agent, (i) as soon as they are
available, copies of any other reports (financial or other) which the
Company shall publish or otherwise make available to any of its
shareholders generally, (ii) as soon as they are available, copies of
any reports and financial statements furnished to or filed with the
Commission or any national securities exchange and (iii) from time to
time such other information concerning the Company as you may
reasonably request.
(h) The Company will use its best efforts to list the Specified
Placement Shares, subject to official notice of issuance, on the
Nasdaq National Market.
(i) The Company will maintain a transfer agent and registrar for
its Common Stock.
(j) Prior to filing its quarterly statements on Form 10-Q, the
Company will have its independent auditors review the Form 10-Q.
(k) Prior to the Closing Date the Company will issue no press
release or other communications directly or indirectly and hold no
press conference with respect to the Company, the financial condition,
results of operation, business, prospects, assets or liabilities of
the Company, or the offering of the Specified Placement Shares,
without your prior written consent, which shall not be unreasonably
withheld.
(l) Without the prior written consent of ▇▇▇▇▇, the Company will
not offer, sell, assign, transfer, encumber, contract to sell, grant
an option to purchase or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into
or exercisable or exchangeable for Common Stock or warrants or other
rights to purchase Common Stock (including, without limitation, Common
Stock of the Company which may be deemed to be beneficially owned by
the undersigned in accordance with the Rules and Regulations) during
the 90 days following the date on which the price of the Specified
Placement Shares is set, other than the Company's sale of Common Stock
hereunder and the Company's issuance of Common Stock upon the exercise
of warrants or stock options, or pursuant to contractual rights, in
each case which are presently outstanding and described in the
Prospectus or subsequently granted as contemplated by the Prospectus.
(m) The Company will apply the net proceeds from the sale of the
Specified Placement Shares substantially in the manner set forth in
the description under "Use of Proceeds" in the Prospectus, in light of
the totality of the disclosure in the Prospectus, which "Use of
Proceeds" description complies in all respects with the requirements
of Item 504 of Regulation S-K.
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(n) The Company will supply you with copies of all correspondence
to and from, and all documents issued to and by, the Commission in
connection with the registration of the Specified Placement Shares
under the Securities Act.
(o) Prior to the Closing Date the Company will furnish to you, 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 in the Registration Statement and the Prospectus.
6. Payment of Expenses. (a) The Company will pay (directly or by
-------------------
reimbursement) all costs, fees and expenses incurred in connection with expenses
incident to the performance of its obligations under this Agreement and in
connection with the transactions contemplated hereby, including but not limited
to (i) all expenses and taxes incident to the issuance and delivery of the
Specified Placement Shares; (ii) all expenses incident to the registration of
the Specified Placement Shares under the Securities Act; (iii) the costs of
preparing stock certificates (including printing and engraving costs); (iv) all
fees and expenses of the registrar and transfer agent of the Specified Placement
Agent; (v) all necessary issue, transfer and other stamp taxes in connection
with the issuance and sale of the Specified Placement Shares; (vi) fees and
expenses of the Company's counsel and the Company's independent accountants;
(vii) all costs and expenses incurred in connection with the preparation,
printing, filing, shipping and distribution of the Registration Statement, each
Preeffective Prospectus and the Prospectus (including all exhibits and financial
statements) and all amendments and supplements provided for herein; (viii) all
filing fees, attorneys fees, and expenses incurred by the Company or the Agent
in connection with exemptions from the qualifying or registering (or obtaining
qualification or registration of) all or any part of the Specified Placement
Shares for offer and sale and determination of its eligibility for investment
under the Blue Sky or other securities laws of such jurisdictions as the Agent
may reasonably designate; (ix) all fees and expenses paid or incurred in
connection with filings made with the NASD; (x) all fees and expenses of the
escrow agent related to closing the offering contemplated hereby; and (xi) all
other costs and expenses incident to the performance of its obligations
hereunder which are not otherwise specifically provided for in this Section.
(b) In addition to its other obligations under Section 7(a) hereof,
the Company agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of, or based
upon, (i) any statement or omission or any alleged statement or omission or (ii)
any breach or inaccuracy in its representations and warranties, it will
reimburse the Agent on a quarterly basis for all reasonable legal or other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
Company's obligation to reimburse the Agent for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. To the extent that any such interim
reimbursement payment is so held to have been improper, the Agent shall promptly
return it to the Company together with interest, compounded daily, determined on
the basis of the prime rate (or other commercial lending rate for borrowers of
the highest credit standing) announced from
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time to timed by The Chase Manhattan Bank, New York, New York (the "Prime
Rate"). Any such interim reimbursement payments which are not made to the Agent
in a timely manner as provided below shall bear interest at the Prime Rate from
the due date for such reimbursement. This expense reimbursement agreement will
be in addition to any other liability which the Company may otherwise have. The
request for reimbursement will be sent to the Company.
(c) In addition to its other obligations under Section 6(b) hereof,
the Agent agrees that, as an interim measure during the pendency of any claim,
action, investigation, inquiry or other proceeding arising out of or based upon
any statement or omission, or any alleged statement or omission, described in
Section 7(b) hereof which relates to information furnished to the Company
pursuant to Section 7(d) hereof, it will reimburse the Company (and, to the
extent applicable, each officer, director or controlling person) on a quarterly
basis for all reasonable legal or other expenses incurred in connection with
investigating or defending any such claim, action, investigation, inquiry or
other proceeding, notwithstanding the absence of a judicial determination as to
the propriety and enforceability of the Agent, obligation to reimburse the
Company (and, to the extent applicable, each officer, director or controlling
person) for such expenses and the possibility that such payments might later be
held to have been improper by a court of competent jurisdiction. To the extent
that any such interim reimbursement payment is so held to have been improper,
the Company (and, to the extent applicable, each officer, director or
controlling person) shall promptly return it to the Agent together with
interest, compounded daily, determined on the basis of the Prime Rate. Any such
interim reimbursement payments which are not made to the Company within thirty
(30) days of a request for reimbursement shall bear interest at the Prime Rate
from the date of such request. This indemnity agreement will be in addition to
any liability which such Agent may otherwise have.
(d) It is agreed that any controversy arising out of the operation
of the interim reimbursement arrangements set forth in paragraph (b) and/or (c)
of this Section 6, including the amounts of any requested reimbursement payments
and the method of determining such amounts, shall be settled by arbitration
conducted under the provisions of the Constitution and Rules of the Board of
Governors of the New York Stock Exchange, Inc. or pursuant to the Code of
Arbitration Procedure of the NASD. Any such arbitration must be commenced by
service of a written demand for arbitration or written notice of intention to
arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Such an arbitration would be limited to the operation of
the interim reimbursement provisions contained in paragraph (b) and/or (c) of
this Section 6, as the case may be, and would not resolve the ultimate propriety
or enforceability of the obligation to reimburse expenses which is created by
the provisions of Section 7.
7. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless the Agent and each person, if any, who controls the
Agent within the meaning of the Securities Act and the respective officers,
directors, partners, employees, representatives and agents of the Agent
(collectively, the "Agent Indemnified Parties" and, each, an "Agent Indemnified
Party"), against any losses, claims, damages, liabilities or expenses (including
the reasonable cost of investigating and defending against any claims therefor
and counsel fees
-15-
incurred in connection therewith), joint or several, which may be based in whole
or in part upon the Securities Act, the Exchange Act or any other federal,
state, local or foreign statute or regulation, or at common law, on the ground
or alleged ground that any Preeffective Prospectus, the Registration Statement
or the Prospectus (or any Preeffective Prospectus, the Registration Statement or
the Prospectus as from time to time amended or supplemented) includes or
allegedly includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, unless such statement or omission was made in solely reliance
upon, and in conformity with, written information furnished to the Company by
the Agent specifically for use in the preparation thereof provided, however,
-------- -------
that in no case is the Company to be liable with respect to any claims made
against any Agent Indemnified Party against whom the action is brought unless
such Agent Indemnified Party shall have notified the Company in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Agent
Indemnified Party, but failure to notify the Company of such claim shall not
relieve the Company from any liability which it may have to any Agent
Indemnified Party otherwise than on account of its indemnity agreement contained
in this paragraph and, provided, further, that the indemnity agreement provided
-------- -------
in this Section 7(a) with respect to any Preeffective Prospectus shall not inure
to the benefit of the Agent from whom the person asserting any losses, claims,
damages, liabilities or expenses based upon any untrue statement or alleged
untrue statement of material fact or omission or alleged omission to state
therein a material fact purchased Specified Placement Shares, if a copy of the
Prospectus in which such untrue statement or alleged untrue statement or
omission or alleged omission was corrected had not been sent or given to such
person within the time required by the Securities Act and the Rules and
Regulations, unless such failure is the result of noncompliance by the Company
with Section 4(d) hereof. The Company will be entitled to participate at its
own expense in the defense or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Company elects to assume
the defense, such defense shall be conducted by counsel chosen by it. In the
event the Company elects to assume the defense of any such suit and retain such
counsel, any Agent Indemnified Parties, defendant or defendants in the suit, may
retain additional counsel but shall bear the fees and expenses of such counsel
unless (i) the Company shall have specifically authorized the retaining of such
counsel or (ii) the parties to such suit include any such Agent Indemnified
Parties, and the Company and such Agent Indemnified Parties at law or in equity
have been advised by counsel to the Agent that one or more legal defenses may be
available to it or them which may not be available to the Company, in which case
the Agent Indemnified Party or Parties shall have the right to select a single
separate counsel to assume such legal defenses and to otherwise participate in
the defense of such action on behalf of such indemnified party or parties and
the Company shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such counsel.
The Company shall not be liable to indemnify any person for any settlement of
any such claim effected without its consent. 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 Agent Indemnified Party.
(b) The Agent severally agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who have signed the
Registration Statement and each
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person, if any, who controls the Company within the meaning of the Securities
Act (collectively, the "Company Indemnified Parties"), against any losses,
claims, damages, liabilities or expenses (including, unless the Agent elects to
assume the defense, the reasonable cost of investigating and defending against
any claims therefor and counsel fees incurred in connection therewith), joint or
several, which arise out of or are based in whole or in part upon the Securities
Act, the Exchange Act or any other federal, state, local or foreign statute or
regulation, or at common law, on the ground or alleged ground that any
Preeffective Prospectus, the Registration Statement or the Prospectus (or any
Preeffective Prospectus, the Registration Statement or the Prospectus, as from
time to time amended and supplemented) includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
in which they were made, not misleading, but only insofar as any such statement
or omission was made in reliance upon, and in conformity with, written
information furnished to the Company by such Agent, specifically for use in the
preparation thereof; provided, however, that in no case is such Agent to be
liable with respect to any claims made against any Company Indemnified Party
against whom the action is brought unless such Company Indemnified Party shall
have notified such the Agent in writing within a reasonable time after the
summons or other first legal process giving information of the nature of the
claim shall have been served upon the Company Indemnified Party, but failure to
notify the Agent of such claim shall not relieve it from any liability which it
may have to any Company Indemnified Party otherwise than on account of its
indemnity agreement contained in this paragraph. The Agent shall be entitled to
participate at its own expense in the defense, or, if it so elects, to assume
the defense of any suit brought to enforce any such liability, but, if the Agent
elects to assume the defense, such defense shall be conducted by counsel chosen
by it. In the event that the Agent elects to assume the defense of any such
suit and retain such counsel, the Company Indemnified Parties and the Agent or
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, respectively,
unless (i) the Agent shall have specifically authorized the retaining of such
counsel or (ii) the parties to such suit include any such Company Indemnified
Parties, and the Agent such Company Indemnified Parties at law or in equity have
been advised by counsel to the Company that one or more legal defenses may be
available to it or them which conflict with the defenses of the Agent, in which
case the Company Indemnified Party or Parties shall have the right to select a
single separate counsel to assume such legal defenses and to otherwise
participate in the defense of such action on behalf of such indemnified party or
parties. The Agent against whom indemnity may be sought shall not be liable to
indemnify any person for any settlement of any such claim effected without such
Agent's consent. This indemnity agreement is not exclusive and will be in
addition to any liability which the Agent might otherwise have and shall not
limit any rights or remedies which may otherwise be available at law or in
equity to any Company Indemnified Party.
(c) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages,
liabilities or expenses (or actions in respect thereof) referred to herein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Agent on the other from the offering of the Specified
-17-
Placement Shares. If however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified party
in such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Company on the one hand and the Agent on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses (or actions in respect
thereof), as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Agent on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the Agent, in each case as
set forth in the table on the cover page of the Prospectus. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or the
Agent and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Agent agree that it would not be just and equitable if contribution were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or expenses (or actions in respect thereof)
referred to above shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating,
defending, settling or compromising any such claim. Notwithstanding the
provisions of this subsection (d), no Agent shall be required to contribute any
amount in excess of the amount by which the total price at which the Specified
Placement Shares placed by it and distributed to the public were offered to the
public exceeds the amount of any damages which such Agent has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(d) The information set forth in the last paragraph on the front cover
page (insofar as such information relates to the Agent) and under the caption
``Plan of Distribution'' in any Preeffective Prospectus and in the Prospectus
constitutes the only information furnished by the Agent to the Company for
inclusion in any Preeffective Prospectus, the Prospectus or the Registration
Statement.
(e) No indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or threatened
proceeding in respect of which any indemnified party is or could have been a
party and indemnification could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on all claims that are the subject matter
of such proceeding.
8. Survival of Indemnities, Representations, Warranties, etc. The
----------------------------------------------------------
respective indemnities, covenants, agreements, representations, warranties and
other statements of the Company and the 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
-18-
or on behalf of the Agent, the Company or any of its officers or directors or
any controlling person, and shall survive delivery of and payment for the
Specified Placement Shares.
9. Conditions of Agent, Obligations. The obligations of the Agent
--------------------------------
hereunder shall be subject to the accuracy, at and (except as otherwise stated
herein) as of the date hereof and at and as of the Closing Date, of the
representations and warranties made herein by the Company, to compliance at and
as of the Closing Date by the Company with its covenants and agreements herein
contained and other provisions hereof to be satisfied at or prior to the Closing
Date, and to the following additional conditions:
(a) The Registration Statement shall have become effective and no
stop order suspending the effectiveness thereof shall have been issued
and no proceedings for that purpose shall have been initiated or, to
the knowledge of the Company or the Agent, shall be threatened by the
Commission, and any request for additional information on the part of
the Commission (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the
reasonable satisfaction of the Agent. Any filings of the Prospectus,
or any supplement thereto, required pursuant to Rule 424 (b) or Rule
434 of the Rules and Regulations, shall have been made in the manner
and within the time period required by Rule 424(b) and Rule 434 of the
Rules and Regulations, as the case may be.
(b) The Agent shall have been satisfied that there shall not have
occurred any change prior to the Closing Date in the condition
(financial or otherwise) properties, business, management, prospects,
net worth or results of operations of the Company or any change in the
capital stock, short-term or long-term debt of the Company, such that
(i) the Registration Statement or the Prospectus, or any amendment or
supplement thereto, contains an untrue statement of fact which, in the
opinion of the Agent, is material, or omits to state a fact which, in
the opinion of the Agent is required to be stated therein or is
necessary to make the statements therein not misleading, or (ii) it is
impracticable in the reasonable judgment of the Agent to proceed with
the public offering or purchase the Specified Placement Shares as
contemplated hereby.
(c) The Agent shall be satisfied that no legal or governmental
action, suit or proceeding affecting the Company which is material and
adverse to the Company or which affects or may affect the Company's
ability to perform its obligations under this Agreement shall have
been instituted or threatened and there shall have occurred no
material adverse development in any existing such action, suit or
proceeding.
(d) At the time of execution of this Agreement, the Agent shall
have received from Price Waterhouse LLP, independent certified public
accountants, a letter, dated the date hereof, in form and substance
satisfactory to the Agent.
-19-
(e) The Agent shall have received from Price Waterhouse LLP,
independent certified public accountants, a letter, dated the Closing
Date, to the effect that such accountants reaffirm, as of the Closing
Dates, and as though made on the Closing Dates, the statements made in
the letter furnished by such accountants pursuant to paragraph (d) of
this Section 9.
(f) The Agent shall have received from ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ &
Freidenrich, counsel for the Company, an opinion, dated the Closing
Date, to the effect set forth in Exhibit I hereto.
(g) The Agent shall have received from Pepper, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Company, an opinion, dated the Closing Date,
to the effect set forth in Exhibit II hereto.
(h) The Agent shall have received from Oblon, Spivak, McClelland,
▇▇▇▇▇ & Neustadt, P.C., patent counsel for the Company, an opinion,
dated the Closing Date, to the effect set forth in Exhibit III hereto.
(i) The Agent shall have received from Sheppard, Mullin, ▇▇▇▇▇▇▇
& Hampton, patent counsel for the Company, an opinion, dated the
Closing Date, to the effect set forth in Exhibit IV hereto.
(j) The Agent shall have received from ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, patent
counsel for the Company, an opinion, dated the Closing Date, to the
effect set forth in Exhibit V hereto.
(k) The Agent shall have received from ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
regulatory counsel for the Company, an opinion, dated the Closing
Date, to the effect set forth in Exhibit VI hereto.
(l) The Agent shall have received a certificate, dated the
Closing Date, signed on behalf of the Company by its chief executive
officer or the President and the chief financial or accounting officer
of the Company to the effect that:
(i) No stop order suspending the effectiveness of the
Registration Statement has been issued, and, to the best of the
knowledge of the signers, no proceedings for that purpose have
been instituted or are pending or contemplated under the
Securities Act;
(ii) Neither any Preeffective Prospectus, as of its date,
nor the Registration Statement nor the Prospectus, nor any
amendment or supplement thereto, as of the time when the
Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate,
included any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or
necessary
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to make the statements therein, in light of the circumstances
under which they were made, not misleading;
(iii) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, and except as set forth or contemplated in the
Prospectus, the Company has not incurred any material liabilities
or obligations, direct or contingent, nor entered into any
material transactions not in the ordinary course of business and
there has not been any material adverse change in the condition
(financial or otherwise), properties, business, management,
prospects, net worth (other than ordinary course changes) or
results of operations of the Company, or any change in the
capital stock (other than through the exercise of stock options),
short-term or long-term debt of the Company;
(iv) The representations and warranties of the Company in
this Agreement are true and correct at and as of the Closing
Date, and the Company has complied with all the agreements and
performed or satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; and
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, and
except as disclosed in or contemplated by the Prospectus, (i)
there has not been any material adverse change or a development
involving a material adverse change in the condition (financial
or otherwise), properties, business, management, prospects, net
worth or results of operations of the Company; (ii) the business
and operations conducted by the Company have not sustained a loss
by strike, fire, flood, accident or other calamity (whether or
not insured) of such a character as to interfere materially with
the conduct of the business and operations of the Company; (iii)
no legal or governmental action, suit or proceeding is pending or
threatened against the Company which is material to the Company,
whether or not arising from transactions in the ordinary course
of business, or which may materially and adversely affect the
transactions contemplated by this Agreement; (iv) since such
dates and except as so disclosed, the Company has not incurred
any material liability or obligation, direct, contingent or
indirect, made any change in its capital stock (except pursuant
to its stock plans), made any material change in its short-term
or funded debt or repurchased or otherwise acquired any of the
Company's capital stock; and (v) the Company has not declared or
paid any dividend, or made any other distribution, upon its
outstanding capital stock payable to stockholders of record on a
date prior to the Closing Date.
(m) The Company shall have furnished to the Agent such additional
certificates as the Agent may have reasonably requested as to the
accuracy, at and as of the Closing Date, of the representations and
warranties made herein by it
-21-
and as to compliance at and as of the Closing Date by it with its
covenants and agreements herein contained and other provisions hereof
to be satisfied at or prior to the Closing Date, and as to
satisfaction of the other conditions to the obligations of the Agent
hereunder.
(n) Cowen shall have received the written agreements of the
officers, directors and holders of Common Stock listed in Schedule B
that each will not offer, sell, assign, transfer, encumber, contract
to sell, grant an option to purchase or otherwise dispose of, directly
or indirectly, any shares of Common Stock or securities convertible
into or exchangeable for Common Stock or warrants or other rights to
purchase Common Stock (including, without limitation, Common Stock of
the Company which may be deemed to be beneficially owned by the
undersigned in accordance with the Rules and Regulations) during the
90 days following the date of the final Prospectus, other than (i) by
operation of law, (ii) as a bona fide gift or gifts, provided the
donee or donees thereof agree in writing to be bound by this
restriction or (iii) as a distribution to partners or stockholders of
such person provided that the distributees thereof agree in writing to
be bound by the terms of this restriction.
All opinions, certificates, letters and other documents will be in
compliance with the provisions hereunder only if they are satisfactory in form
and substance to the Agent. The Company will furnish to the Agent conformed
copies of such opinions, certificates, letters and other documents as the Agent
shall reasonably request. If any of the conditions hereinabove provided for in
this Section shall not have been satisfied when and as required by this
Agreement, this Agreement may be terminated by the Agent by notifying the
Company of such termination in writing or by telegram at or prior to the Closing
Dates, but Cowen shall be entitled to waive any of such conditions.
10. Termination. (a) This Agreement (except for the provisions of
-----------
Section 6) may be terminated by the Company at any time before it becomes
effective in accordance with Section 9 by notice to the Agent and may be
terminated by the Agent at any time before it becomes effective in accordance
with Section 9 by notice to the Company. In the event of any termination of this
Agreement under this or any other provision of this Agreement, there shall be no
liability of any party to this Agreement to any other party, other than as
provided in Sections 6 and 7.
This Agreement shall also terminate at 5:00 p.m., California time, on
the twentieth full business day after the Registration Statement shall have
become effective if no sale of the Specified Placement Shares shall have
occurred at or prior to such time. Any termination pursuant to this subsection
(b) shall be without liability on the part of the Agent to the Company or on the
part of the Company to the Agent except to the extent provided in Section 8
hereof.
11. Notices. All communications hereunder shall be in writing and, if
-------
sent to the Agent shall be mailed, delivered or telegraphed and confirmed to
▇▇▇▇▇ & Company at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or, if sent to the
Company, shall be mailed, delivered or telegraphed and confirmed c/o ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇.
-22-
12. Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the Agent, the Company and their respective successors and legal
representatives. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person other than the persons mentioned in the
preceding sentence any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions herein contained, this Agreement
and all conditions and provisions hereof being intended to be and being for the
sole and exclusive benefit of such persons and for the benefit of no other
person; except that the representations, warranties, covenants, agreements and
indemnities of the Company contained in this Agreement shall also be for the
benefit of the person or persons, if any, who control any Agent within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act,
and the indemnities of the Agent shall also be for the benefit of each director
of the Company, each of its officers who has signed the Registration Statement
and the person or persons, if any, who control the Company within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act.
13. Applicable Law. This Agreement shall be governed by and construed
--------------
in accordance with the laws of the State of New York.
14. 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.
15. 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 Agent.
16. Counterparts. This Agreement may be signed in two (2) or more
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
-23-
If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
between us.
Very truly yours,
AASTROM BIOSCIENCES, INC.
By:
-------------------------------------
R. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Ph.D.
President and Chief Executive Officer
Accepted and delivered in
New York, New York as of
the date first above written.
▇▇▇▇▇ & COMPANY
By: Cowen Incorporated,
its general partner
By:
-----------------------------
Title:
-24-
SCHEDULE A
Number
of Specified
Placement
Shares
to be
Name Purchased
---- -----------
SCHEDULE B
EXHIBIT I
OPINION OF ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & FREIDENRICH
(a) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified or be in good
standing would not have a material adverse effect on the condition (financial
or otherwise), earnings, operations or business of the Company and its
subsidiaries considered as one enterprise. To such counsel's knowledge, the
Company does not own or control, directly or indirectly, any corporation,
association or other entity;
(b) To such counsel's knowledge, the Specified Placement Shares to
be issued by the Company pursuant to the terms of this Agreement will not have
been issued in violation of or subject to any co-sale right, registration
right, right of first refusal or other similar right.
(c) The license agreement between the Company and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ dated July 17, 1992 and relating to U.S. Patent No. 4,839,292,
Canadian Patent No. 1,306,714 and European Patent Convention Patent No.
0.307.048 is a valid and binding agreement of the Company, enforceable in
accordance with its terms; and to such counsel's knowledge, the Company is not
in material breach or violation of any of the terms or provisions of such
agreement, and no default exists under such agreement;
(d) The license agreement between the Company and the University of
Michigan dated March 13, 1992, as amended, and relating to U.S. Patent No.
4,839,292 is a valid and binding agreement of the Company, enforceable in
accordance with its terms; and to such counsel's knowledge, the Company is not
in material breach or violation of any of the terms or provisions of such
agreement and no default exists under such agreement;
(e) This Agreement, assuming due authorization, execution and
delivery by the Company and you, is a valid and binding agreement of the
Company, enforceable in accordance with its terms, except insofar as
indemnification and contribution provisions may be limited by applicable law
and except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting creditors'
rights generally or by general equitable principles;
(f) The Registration Statement has become effective under the Act
and, to such counsel's knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or threatened under the Act;
(g) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (other than the financial statements
(including supporting schedules) and financial data derived therefrom as to
which such counsel need express no
-2-
opinion), as of the effective date of the Registration Statement, complied as
to form in all material respects with the requirements of the Act and the
applicable Rules and Regulations;
(h) The description in the Registration Statement and the Prospectus
of statutes other than Michigan Law are accurate and fairly present the
information required to be presented by the Act and the applicable Rules and
Regulations;
(i) To such counsel's knowledge, there are no agreements, contracts,
leases or documents to which the Company is a party of a character required to
be described or referred to in the Registration Statement or Prospectus or to
be filed as an exhibit to the Registration Statement which are not described
or referred to therein or filed as required;
(j) The performance of this Agreement and the consummation of the
transactions herein contemplated (other than performance of the Company's
indemnification and contribution obligations hereunder, concerning which no
opinion need be expressed) will not, to such counsel's knowledge, result in a
material breach or violation of any of the terms and provisions of, or
constitute a default under, any bond, debenture, note or other evidence of
indebtedness, or any lease, contract, indenture, mortgage, deed of trust, loan
agreement, joint venture or other agreement or instrument known to such
counsel to which the Company is a party or by which its properties are bound,
or any applicable statute, rule or regulation known to such counsel or, to
such counsel's knowledge, any order, writ or decree of any court, government
or governmental agency or body having jurisdiction over the Company or over
any of its properties or operations;
(k) No consent, approval, authorization or order of or qualification
with any court, government or governmental agency or body having jurisdiction
over the Company, or over any of its properties or operations is necessary in
connection with the consummation by the Company of the transactions herein
contemplated, except such as have been obtained under the Act or such as may
be required under state or other securities or Blue Sky laws in connection
with the transactions contemplated hereby;
(l) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against the Company of a character required
to be disclosed in the Registration Statement or the Prospectus by the Act or
the Rules and Regulations, other than those described therein;
(m) To such counsel's knowledge, the Company is not presently (a) in
material violation of its charter or bylaws, or (b) in material breach of any
applicable statute, rule or regulation known to such counsel or, to such
counsel's knowledge, any order, writ or decree of any court or governmental
agency or body having jurisdiction over the Company or over any of its
properties or operations; and
(n) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders of Common Stock or other
securities of the Company have registration rights with respect to securities
of the Company and, except as set forth in the Registration Statement and
Prospectus, all holders of securities of the Company having rights
-3-
known to such counsel to registration of such shares of Common Stock or other
securities as part of the offering contemplated by the Registration Statement
have, with respect to the offering contemplated thereby, waived such rights or
such rights have expired by reason of lapse of time following notification of
the Company's intent to file the Registration Statement.
In addition, such counsel shall state that such counsel has
participated in conferences with officials and other representatives of the
Company, the Agent, the Agent's Counsel and the independent certified public
accountants of the Company, at which such conferences the contents of the
Registration Statement and Prospectus and related matters were discussed, and
although they have not independently checked or verified the accuracy or
completeness of the statements contained in the Registration Statement or the
Prospectus, nothing has come to the attention of such counsel which leads them
to believe that, (i) at the time the Registration Statement became effective,
the Registration Statement and any amendment or supplement thereto (other than
the financial statements including supporting schedules and other financial and
statistical information derived therefrom, as to which such counsel need express
no comment) contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (ii) at the Closing Date the Prospectus
and any amendment or supplement thereto (except as aforesaid) contained any
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. Such counsel may state that they do
not assume any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus.
Counsel rendering the foregoing opinion may rely as to questions of
fact upon representations or certificates of officers of the Company and of
government officials, in which case their opinion is to state that they are so
relying and that they have no knowledge of any material misstatement or
inaccuracy in any such opinion, representation or certificate. Copies of any
opinion, representation or certificate so relied upon shall be delivered to you,
and to Agent's Counsel.
-4-
EXHIBIT II
OPINION OF PEPPER, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
(a) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state of Michigan;
(b) The Company has the corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the
Prospectus;
(c) The Company is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to be so qualified or be in good
standing would not have a material adverse effect on the condition (financial
or otherwise), earnings, operations or business of the Company and its
subsidiaries considered as one enterprise. To such counsel's knowledge, the
Company does not own or control, directly or indirectly, any corporation,
association or other entity;
(d) The Specified Placement Shares to be issued by the Company
pursuant to the terms of this Agreement have been duly authorized and, upon
issuance and delivery against payment therefor in accordance with the terms
hereof, will be duly and validly issued and fully paid and nonassessable, and
will not have been issued in violation of or subject to any preemptive right,
co-sale right, registration right, right of first refusal or other similar
right.
(e) The Company has the corporate power and authority to enter into
this Agreement and to issue, sell and deliver the Specified Placement Shares
to be issued and sold by it hereunder;
(f) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus under the caption "Capitalization"
as of the dates stated therein, the issued and outstanding shares of capital
stock of the Company have been duly and validly issued and are fully paid and
nonassessable, and, to such counsel's knowledge, will not have been issued in
violation of or subject to any preemptive right, co-sale right, registration
right, right of first refusal or other similar right;
(g) This Agreement has been duly authorized by all necessary
corporate action on the part of the Company and has been duly executed and
delivered by the Company and, assuming due authorization, execution and
delivery by you, is a valid and binding agreement of the Company, enforceable
in accordance with its terms, except insofar as indemnification provisions may
be limited by applicable law and except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or affecting creditors' rights generally or by general equitable principles;
(h) The information in the Prospectus under the caption "Description
of Capital Stock," to the extent that it constitutes matters of law or legal
conclusions, has been
-1-
reviewed by such counsel and is a fair summary of such matters and
conclusions; and the forms of certificates evidencing the Common Stock and
filed as exhibits to the Registration Statement comply with Michigan law;
(i) The description in the Registration Statement and the Prospectus
of the charter and bylaws of the Company and of statutes are accurate and
fairly present the information required to be presented by the Act and the
applicable Rules and Regulations;
(j) To such counsel's knowledge, there are no agreements, contracts,
leases or documents to which the Company is a party of a character required to
be described or referred to in the Registration Statement or Prospectus or to
be filed as an exhibit to the Registration Statement which are not described
or referred to therein or filed as required;
(k) The performance of this Agreement and the consummation of the
transactions herein contemplated (other than performance of the Company's
indemnification obligations hereunder, concerning which no opinion need be
expressed) will not (a) result in any violation of the Company's charter or
bylaws or (b) to such counsel's knowledge, result in a material breach or
violation of any of the terms and provisions of, or constitute a default
under, any bond, debenture, note or other evidence of indebtedness, or any
lease, contract, indenture, mortgage, deed of trust, loan agreement, joint
venture or other agreement or instrument known to such counsel to which the
Company is a party or by which its properties are bound, or any applicable
statute, rule or regulation known to such counsel or, to such counsel's
knowledge, any order, writ or decree of any court, government or governmental
agency or body having jurisdiction over the Company or over any of its
properties or operations;
(l) No consent, approval, authorization or order of or qualification
with any court, government or governmental agency or body having jurisdiction
over the Company, or over any of its properties or operations is necessary in
connection with the consummation by the Company of the transactions herein
contemplated, except such as have been obtained under the Act or such as may
be required under state or other securities or Blue Sky laws in connection
with the purchase and the distribution of the Specified Placement Shares;
(m) To such counsel's knowledge, there are no legal or governmental
proceedings pending or threatened against the Company of a character required
to be disclosed in the Registration Statement or the Prospectus by the Act or
the Rules and Regulations, other than those described therein;
(n) To such counsel's knowledge, the Company is not presently (a) in
material violation of its charter or bylaws, or (b) in material breach of any
applicable statute, rule or regulation known to such counsel or, to such
counsel's knowledge, any order, writ or decree of any court or governmental
agency or body having jurisdiction over the Company or over any of its
properties or operations; and
(o) To such counsel's knowledge, except as set forth in the
Registration Statement and Prospectus, no holders of Common Stock or other
securities of the Company have registration rights with respect to securities
of the Company and, except as set forth in the
-2-
Registration Statement and Prospectus, all holders of securities of the
Company having rights known to such counsel to registration of such shares of
Common Stock or other securities, because of the filing of the Registration
Statement by the Company have, with respect to the offering contemplated
thereby, waived such rights or such rights have expired by reason of lapse of
time following notification of the Company's intent to file the Registration
Statement or have included securities in the Registration Statement pursuant
to the exercise of and in full satisfaction of such rights.
In addition, such counsel shall state that although they have not
verified the accuracy or completeness of the statements contained in the
Registration Statement or the Prospectus, nothing has come to the attention of
such counsel which leads them to believe that, at the time the Registration
Statement became effective and at all times subsequent thereto up to and on the
Closing Date, Registration Statement and any amendment or supplement thereto
(other than the financial statements including supporting schedules and other
financial and statistical information derived therefrom, as to which such
counsel need express no comment) contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or at the Closing Date
the Registration Statement, the Prospectus and any amendment or supplement
thereto (except as aforesaid) contained any untrue statement of a material fact
or omitted to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Counsel rendering the foregoing opinion may rely as to questions of
law not involving the laws of the United States or the State of Michigan upon
opinions of local counsel, and as to questions of fact upon representations or
certificates of officers of the Company and of government officials, in which
case their opinion is to state that they are so relying and that they have no
knowledge of any material misstatement or inaccuracy in any such opinion,
representation or certificate. Copies of any opinion, representation or
certificate so relied upon shall be delivered to you, and to Agent's Counsel.
-3-
EXHIBIT III
OPINION OF OBLON, SPIVAK, MCCLELLAND, ▇▇▇▇▇ & NEUSTADT, P.C.
Attached
-1-
EXHIBIT IV
OPINION OF SHEPPARD, MULLIN, ▇▇▇▇▇▇▇ & HAMPTON
Attached
-1-
EXHIBIT V
OPINION OF ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇
Attached
-1-
EXHIBIT VI
OPINION OF ▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
a. The statements in the Registration Statement and Prospectus
under the captions "Risk Factors -- Uncertainty of Regulatory Approval;
Extensive Government Regulation" and "Business -- Government Regulation,"
insofar as such statements purport to summarize applicable provisions of the
United Stated food and drug laws (the "Food and Drug Laws"), have been
reviewed by such counsel and are accurate as to, and fairly describe, the
regulatory status of the Company under the Food and Drug Laws; and to such
counsel's knowledge, there are no presently existing Food and Drug Laws
applicable to the Company and/or the Company's products that are required to
be described or referred to in the Registration Statement and Prospectus that
are not so described or referred to therein.
b. To such counsel's knowledge, the Company is currently
conducting its business in material compliance with all applicable provisions
of the Food and Drug Laws.
c. There are no judicial or administrative proceedings pending
or, to such counsel's knowledge, threatened against the Company that may cause
any regulatory permit that is material to the business of the Company, to be
revoked, withdrawn, cancelled, suspended or not renewed.
In rendering the foregoing opinions, such counsel may state that they
have not independently verified nor do they take any responsibility for nor are
they addressing in any way any statements of fact or statements of belief
attributable to the Company.
In addition to the foregoing opinions, counsel shall state that:
During the course of preparation of the Registration Statement, such
counsel participated in certain discussions with officers of the Company as to
the regulatory matters dealt with under the captions "Risk Factors --
Uncertainty of Regulatory Approval; Extensive Government Regulation" and
"Business -- Government Regulation" in the Prospectus. While such counsel has
not undertaken to determine independently and such counsel does not assume any
responsibility for, the accuracy, completeness or fairness of the statements
under such captions in the Prospectus, such counsel shall state on the basis of
these discussions that no facts have come to their attention which cause them to
believe that the statements in the Prospectus under the captions "Risk Factors -
- Uncertainty of Regulatory Approval; Extensive Government Regulation" and
"Business -- Government Regulation," insofar as such statements relate to
regulatory matters, at the time the Registration Statement became effective, or
at the Closing Date the Prospectus contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or as of the date
hereof contains an untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
-1-
