NEUROGEN CORPORATION (a Delaware Corporation) 6,993,000 Shares of Common Stock (Par Value $0.025 Per Share) PLACEMENT AGENCY AGREEMENT
Exhibit
10.1
NEUROGEN
CORPORATION
(a
Delaware Corporation)
6,993,000
Shares of Common Stock
(Par
Value $0.025 Per Share)
December
18, 2006
Pacific
Growth Equities, LLC
CIBC
World Markets Corp.
Leerink
▇▇▇▇▇ & Company
▇▇▇▇▇▇▇▇
Curhan Ford & Co.
c/o
Pacific Growth Equities, LLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Ladies
and Gentlemen:
Neurogen
Corporation, a Delaware corporation (the “Company”), proposes, subject to the
terms and conditions contained herein, to issue and sell 6,993,000 shares
of
common stock, par value $0.025 per share, of the Company (the “Securities”)
directly to certain investors (collectively, the “Investors”).
The
Company desires to engage Pacific Growth Equities, LLC (“PGE”),
CIBC
World Markets Corp. (“CIBC”), Leerink ▇▇▇▇▇ & Company (“Leerink”) and
▇▇▇▇▇▇▇▇ Curhan Ford & Co. (“▇▇▇▇▇▇▇▇”) as its placement agents (each, a
“Placement Agent” and, collectively, the “Placement Agents”), for whom PGE
is
acting
as representative (in such capacity, the “Representative”), in connection with
the issuance and sale of the Securities and hereby
confirms its agreement with respect to the placement of the Securities.
The
Company has prepared and filed in conformity with the requirements of the
Securities Act of 1933, as amended (the “Act”), and the published rules and
regulations thereunder (the “Rules and Regulations”) adopted by the Securities
and Exchange Commission (the “Commission”) a Registration Statement (as
hereinafter defined)
on Form S-3, initially filed on August 16, 2002, as amended (No. 333-98237),
relating
to the Securities and the offering thereof from time to time in accordance
with
Rule 415 of the Rules and Regulations, and such amendments thereof as may
have
been required. The Registration Statement includes a prospectus dated February
13, 2003 (the “Base Prospectus”). The Company has filed the Base Prospectus with
the Commission and has filed with, or transmitted for filing to, or shall
promptly hereafter file with or transmit for filing to the Commission, a
prospectus supplement relating to the Securities in accordance with Rule
424(b)
under the Act (the “Final Prospectus Supplement”). The term “Registration
Statement” as used in this Agreement means the initial registration statement
(including all exhibits, financial schedules and all documents and information
deemed to be a part of the Registration
Statement (through incorporation by reference or otherwise)), as amended,
at the
time and on the date it became effective (the “Effective Date”), including the
information (if any) contained in the form of final prospectus filed with
the
Commission pursuant to Rule 424(b) of the Rules and Regulations and deemed
to be
part thereof at the time of effectiveness pursuant to Rule 430A of the Rules
and
Regulations. The term “Prospectus” as used in this Agreement means the Base
Prospectus together with the Final Prospectus Supplement. As used herein,
the
terms “Base Prospectus,” “Prospectus,” “Registration Statement,” and “Final
Prospectus Supplement” shall include any documents incorporated by reference
therein and any reference to any amendment or supplement to the Registration
Statement or the Prospectus shall be deemed to refer to and include any document
filed under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), after the date of the Base Prospectus by the Company with the Commission
and on or before the Closing Date (as defined herein), that is deemed to
be
incorporated by reference in the Registration Statement or the Prospectus.
The
Company hereby confirms
that each of the Placement Agents, in connection with its duties in such
capacity, is authorized to distribute or cause to be distributed the Prospectus
(as from time to time amended or supplemented if the Company furnishes
amendments or supplements thereto to such Placement Agent).
All
references in this Agreement to financial statements and schedules and other
information which is “contained,” “included” or “stated” in the Registration
Statement or the Prospectus (or other references of like import) shall be
deemed
to mean and include all such financial statements and schedules and other
information which is incorporated by reference in the Registration Statement
or
the Prospectus, as the case may be; and all references in this Agreement
to
amendments or supplements to the Registration Statement or the Prospectus
shall
be deemed to mean and include the filing of any document under the Exchange
Act
on or before the Closing Date (as defined herein), which is incorporated
by
reference in the Registration Statement or the Prospectus, as the case may
be.
SECTION
1. Agreement
to Act
as
Placement Agents; Delivery and Payment.
On
the
basis of the representations, warranties and agreements contained in, and
subject to the terms and conditions of, this Agreement:
(a) Each
Placement
Agent agrees to act, on a reasonable efforts basis, as the Company’s placement
agent in connection with the issuance and sale by the Company of the Securities
to the Investors. The Placement Agents shall have no authority to bind the
Company. The Company acknowledges and agrees that each Placement Agent’s
engagement hereunder is not an agreement by such Placement Agent or any of
its
affiliates to underwrite or purchase any securities or otherwise provide
any
financing.
(b) Concurrently
with the execution and delivery of this Agreement, the Company, the Placement
Agents, and American Stock Transfer & Trust Company, as escrow agent (the
“Escrow Agent”), shall enter into an Escrow Agreement substantially in the form
of Exhibit
A
attached
hereto (the “Escrow Agreement”), pursuant to which an escrow account will be
established, at the Company’s expense, for the benefit of the Company and the
Investors (the “Escrow Account”). Concurrently with the execution of the
Purchase Agreements (as defined below), (i) each of the Investors will deposit
in the Escrow Account an amount equal to $5.72 per share multiplied by the
number of Securities to be purchased by such Investor, and (ii) the Escrow
Agent
will notify the Company and the Placement Agents in writing of the amount
of
funds deposited in the Escrow Account. As compensation for their services
hereunder, the Company agrees to pay the Placement Agents, on the Closing
Date
(as defined herein), a commission of six percent (6%) of the gross proceeds
received by the Company from the sale of the Securities, thirty-four
percent (34%) of which will be paid to PGE, thirty percent (30%) of which
will
be paid to CIBC, thirty percent (30%) of which will be paid to Leerink, and
six
percent (6%) of which will be paid to ▇▇▇▇▇▇▇▇ (regardless of the actual
amount
of Securities placed by each Placement Agent);notwithstanding
the foregoing,
the
Placement Agents and the Company agree that
commissions on sales of Securities to
investors identified in Schedule
A
will be
limited
to
one and
one half percent (1.5%)
of
gross proceeds raised from such investors. In addition, the Company agrees
to
pay PGE a fee of $75,000 for capital markets expenses.
(c) At
9:00
a.m., New York City time, on December 21, 2006, or at such other time and
date
as the Representative and the Company determine pursuant to Rule 15c6-1(a)
under
the Exchange Act (such time and date of delivery being herein referred to
as the
“Closing Date”), and upon satisfaction of the conditions set forth in this
Agreement and the Purchase Agreements, the Company shall deliver the Securities,
which shall be registered in name or names and shall be in such denominations
as
the Placement Agents may request at least one business day before the Closing
Date, to the Investors, which delivery may be made through the facilities
of the
Depository Trust Company, and the Escrow Agent will disburse the funds from
the
Escrow Account to the Company and the Placement Agents, by wire in federal
(same
day) funds, as provided in the Escrow Agreement. The closing of the sale
of the
Securities to the Investors (the “Closing”) shall take place at the offices of
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇. All actions taken at the Closing shall be deemed to have occurred
simultaneously.
(d) The
several purchases of the Securities by the Investors shall be evidenced by
the
execution of one or more purchase agreements substantially in the form attached
hereto as Exhibit
B
(the
“Purchase Agreements”).
(e) Prior
to
the earlier of (i) the date on which this Agreement is terminated and (ii)
the
Closing Date, the Company shall not, without the prior consent of the
Representative, solicit or accept offers to purchase shares of its Common
Stock
(other than pursuant to the exercise of stock options and warrants to purchase
Common Stock outstanding on the date hereof), otherwise than through the
Placement Agents.
SECTION
2. Representations
and Warranties.
(a) Representations
and Warranties by the Company.
The
Company represents and warrants to each Placement Agent as of the date hereof,
and as of the Closing Date referred to in Section 1(c) hereof, and agrees
with
each Placement Agent, as follows:
(i) Registration
Statement, Prospectus and Disclosure at Time of Sale.
The
Company meets the requirements for use of Form S-3 under the Act and has
complied with the requirements of Rule 415 with respect to the Registration
Statement. Each
of
the Registration Statement and any post-effective amendment thereto has become
effective under the Act and no stop order preventing or suspending the use
of
the Prospectus or suspending the effectiveness of the Registration Statement
has
been issued under the Act and no proceedings for that purpose have been
instituted or are pending or, to the knowledge of the Company, are contemplated
by the Commission, and any request received by the Company on the part of
the
Commission for additional information has been complied with.
On
the
Effective Date and on the Closing Date, the Registration Statement complied
in
all material respects, and on the date of the Prospectus, the date any
Prospectus Supplement or amendment to the Prospectus is filed with the
Commission and the Closing Date, the Prospectus will comply, in all material
respects, with the requirements of the Act and the Rules and Regulations
and the
Exchange Act and the published rules and regulations of the Commission
thereunder. The Registration Statement, as of the Effective Date, contained
no
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order
to
make
the statements therein not misleading. As
of the
Applicable Time and at the Closing Date, neither (x) any Issuer-Represented
General Free Writing Prospectus(es) (as defined below) issued at or prior
to the
Applicable Time (as defined below), the Base Prospectus and the information
included on Exhibit
E
hereto,
all considered together (collectively, the “General Disclosure Package”), nor
(y) any individual Issuer-Represented Limited Use Free Writing Prospectus,
when
considered together with the General Disclosure Package, contained an untrue
statement of a material fact or omitted to state a material fact required
to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
On the
date of the filing of the Prospectus with the Commission, the first delivery
of
the Prospectus to the Investors, the date hereof, and the Closing Date, neither
the Prospectus nor any amendment thereof or supplement thereto, contained
or
will contain any untrue statement of a material fact or omitted or will omit
to
state any 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. Notwithstanding the foregoing, none of the representations
and warranties in this Section 2(a)(i) shall apply to statements in, or
omissions from, the Registration Statement or the Prospectus made in reliance
upon, and in conformity with, information furnished in writing to the Company
by
any Placement Agent through the Representative expressly for use in the
Registration Statement or the Prospectus.
The
Prospectus delivered to the Placement Agents for use in connection with this
offering was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to ▇▇▇▇▇, except to the extent permitted by
Regulation S-T. The Company has not distributed any offering material in
connection with the offering and sale of the Securities, other than the
Registration Statement, the Prospectus and the General Disclosure Package.
As
used
in this subsection and elsewhere in this Agreement:
“Applicable
Time” means 9:00
a.m.
(New York City time) on December 19, 2006.
“Issuer-Represented
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 of the Rules and Regulations (“Rule 433”), relating to the
Securities that (i) is required to be filed with the Commission by the Company
or (ii) is a “road show that is a written communication” within the meaning of
Rule 433(d)(8)(i), whether or not required to be filed with the
Commission
or is
exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a
description of the Securities or of the offering that does not reflect the
final
terms, in each case in the form filed or required to be filed with the
Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g).
“Issuer-Represented
General Free Writing Prospectus” means any Issuer-Represented Free Writing
Prospectus that is intended for general distribution to prospective investors,
as evidenced by its being specified in Schedule
C
hereto.
“Issuer-Represented
Limited Use Free Writing Prospectus” means any Issuer-Represented Free Writing
Prospectus that is not an Issuer-Represented General Free Writing Prospectus.
Each
Issuer-Represented Free Writing Prospectus, as of its issue date and at all
subsequent times through the Closing Date or until any earlier date that
the
issuer notified or notifies the Representative, did not, does not and will
not
include any information that conflicted, conflicts or will conflict with
the
information contained in the Registration Statement or the Prospectus,
including any document incorporated by reference therein and any preliminary
or
other prospectus deemed to be a part thereof that has not been superseded
or
modified.
The
documents incorporated by reference in the Registration Statement and the
Prospectus, at the time they became effective or were filed with the Commission,
as the case may be, complied in all material respects with the requirements
of
the Act or the Exchange Act, as applicable, and the rules and regulations
of the
Commission thereunder, and at the time they became effective or were filed
with
the Commission, as the case may be, none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, and
any
further documents so filed and incorporated by reference in the Registration
Statement and the Prospectus, when such documents become effective or are
filed
with the Commission, as the case may be, will conform in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and the
rules
and regulations of the Commission thereunder and will not contain an 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 are made, not misleading. Notwithstanding
anything to the contrary contained in this subsection, the representations
and
warranties contained in this subsection do not apply to statements or omissions
made in reliance upon and in conformity with information furnished in writing
to
the Company by any Placement Agent or any of its agents or representatives
through the Representative expressly for use in the Registration Statement,
the
Prospectus or any amendment or supplement thereto.
(ii) Independent
Accountants.
PricewaterhouseCoopers LLP, which certified the financial statements and
supporting schedules included in the Registration Statement or incorporated
by
reference in the Registration Statement or the Prospectus, is an independent
public accountant as required by the Act and the Rules and Regulations.
(iii) Financial
Statements.
The
financial statements of the Company included or incorporated by reference
in the
Registration Statement, the General Disclosure Package and the Prospectus,
together with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at
the
dates indicated and the statement of operations, stockholders’ equity and cash
flows of the Company and its consolidated subsidiaries for the periods
specified; said financial statements have been prepared in conformity with
generally accepted accounting principles (“GAAP”) applied on a consistent basis
throughout the periods involved. The supporting schedules included in the
Registration Statement present fairly in accordance with GAAP the information
required to be stated therein, unless otherwise noted therein. The selected
financial data and the summary financial information included or incorporated
by
reference in the Prospectus present fairly the information shown therein
and
have been compiled on a basis consistent with that of the audited financial
statements included or incorporated by reference in the Registration Statement.
No other financial statements or schedules are required to be included in
the
Registration Statement or Prospectus. Any disclosures contained in the
Registration Statement, the General Disclosure Package or the Prospectus
regarding “non-GAAP financial measures” (as such term is defined by the rules
and regulations of the Commission) comply with Regulation G of the Exchange
Act
and Item 10 of Regulation S-K under the Act, to the extent applicable. Except
as
described in the Prospectus or Registration Statement, there are no material
off-balance sheet transactions, arrangements, obligations (including contingent
obligations), or any other relationships with unconsolidated entities or
other
persons, that may have a material effect on the Company’s financial condition,
changes in financial condition, results of operations, liquidity, capital
expenditures, capital resources or significant components of revenue or
▇▇▇▇▇▇▇▇.▇▇
Material Adverse Change in Business.
Since
the respective dates as of which information is given in the Registration
Statement,
the
General Disclosure Package
and the
Prospectus, except as otherwise stated therein, (A) there has been no
material adverse change, or any development that would be reasonably expected
to
result in a material adverse change, in the condition, financial or otherwise,
or in the earnings or business affairs of the Company and its subsidiaries
taken
as a whole, whether or not arising in the ordinary course of business (a
“Material Adverse Effect”), (B) there have been no transactions entered
into by the Company or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Company and its
subsidiaries taken as a whole, and (C) there
has
been no dividend or distribution of any kind declared, paid or made by the
Company on any class of its capital stock.
(iv) Good
Standing of the Company.
The
Company has been duly organized and is validly existing as a corporation
in good
standing under the laws of the State of Delaware and has full corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and
the
General Disclosure Package
and to
enter into and perform its obligations under this Agreement, the Escrow
Agreement, and the Purchase Agreements; and the Company is duly qualified
as a
foreign corporation to transact business and is in good standing in each
other
jurisdiction in which such qualification is required, whether by reason of
the
ownership or leasing of property or the conduct of business, except where
the
failure so to qualify or to be in good standing would not reasonably be expected
to result in a Material Adverse Effect.
(v) Good
Standing of Subsidiary.
Neurogen
Properties, LLC
(the
“Subsidiary”) has been duly formed and is validly existing as a limited
liability company in good standing under the laws of the jurisdiction of
its
formation, has limited liability company power and authority to own, lease
and
operate its properties and to conduct its business as described in the
Prospectus and the
General Disclosure Package,
and is
duly qualified as a foreign limited liability company to transact business
and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in good
standing would not reasonably be expected to result in a Material Adverse
Effect; except as otherwise disclosed in the Registration Statement,
the
General Disclosure Package and the Prospectus,
all of
the issued and outstanding membership interests of the Subsidiary have been
duly
authorized and validly issued, is fully paid and non-assessable and is owned
by
the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding membership interests of the Subsidiary were issued in violation
of
the preemptive or similar rights of any securityholder of the Subsidiary.
The
only subsidiary of the Company is the subsidiary listed on Exhibit 21.1 to
the
Company’s Annual Report on Form 10-K for the year ended December 31,
2005.
(vi) Capitalization.
The
authorized capital stock of the Company consists of 50,000,000 shares of
common
stock, par value $0.025 per share (the “Common Stock”), and 2,000,000 shares of
preferred stock, par value $0.025 per share (the “Preferred Stock”). After
giving effect to the transactions contemplated by this Agreement, as of the
date
hereof:
(A) The
issued
and outstanding capital stock of the Company will consist of 41,773,465 shares
of Common Stock and zero (0) shares of Preferred Stock; and
(B) The
Company will have (x) an aggregate of 5,276,367 shares of Common Stock reserved
for issuance upon the exercise of outstanding options granted under the
Company’s outstanding option plans and employee stock purchase programs
(collectively, the “Option Plans”), (y) zero (0) shares of Common Stock reserved
for issuance upon the exercise of outstanding warrants, and (z) zero (0)
shares
of Common Stock reserved for issuance upon conversion of its convertible
indebtedness.
All
of
the shares of issued and outstanding capital stock of the Company have been
duly
authorized and validly issued and are fully paid and non-assessable; none
of the
outstanding shares of capital stock of the Company was issued in violation
of
the preemptive or other similar rights of any securityholder of the
Company.
(vii) Authorization
of Agreement.
The
Company has full corporate power and authority to (a) enter into this Agreement,
the Escrow Agreement and the Purchase Agreements and to consummate the
transactions contemplated hereby and thereby, and (b) authorize, execute,
issue,
and deliver the Securities as contemplated by this Agreement, the Escrow
Agreement and the Purchase Agreements. This
Agreement, the Escrow Agreement, and
the
Purchase Agreements have been duly authorized, executed and delivered by
the
Company, and constitute legal and binding obligations of the Company,
enforceable in accordance with their terms, except to the extent that rights
to
indemnity hereunder may be limited by federal or state securities laws and
except as such enforceability may be limited by bankruptcy, fraudulent
conveyance, insolvency, reorganization or similar laws affecting the rights
of
creditors generally and subject to general principles of equity.
(viii) Authorization
and Description of Securities.
The
Securities to be purchased by the Investors from the Company have been duly
authorized for issuance and sale to the Investors pursuant to this Agreement
and, when issued and delivered by the Company pursuant to this Agreement
against
payment of the consideration set forth in the Purchase Agreements, will be
validly issued and fully paid and non-assessable; the Common Stock conforms
in
all material respects to all statements relating thereto contained in the
Prospectus and the
General Disclosure Package
and such
description conforms in all material respects to the rights set forth in
the
instruments defining the same; no holder of the Securities will be subject
to
personal liability by reason of being such a holder; and the issuance of
the
Securities is not subject to the preemptive or other similar rights of any
securityholder of the Company, with the exception of any such rights which
have
been waived by the holder thereof.
(ix) Absence
of Defaults and Conflicts.
Neither
the Company nor any of its subsidiaries is (A) in violation of its charter
or
by-laws, or (B) except
for such defaults that would not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Effect,
in
default in the performance or observance of any obligation, agreement, covenant
or condition contained in any material contract, indenture, mortgage, deed
of
trust, loan or credit agreement, note, lease or other agreement or instrument
to
which the Company or any of its subsidiaries is a party or by which it or
any of
them may be bound, or to which any of the property or assets of the Company
or
any subsidiary is subject (collectively, “Agreements and Instruments”) and the
execution, delivery and performance of this Agreement and the consummation
of
the transactions contemplated herein and in the Registration Statement,
the
General Disclosure Package and the Prospectus
(including the issuance and sale of the Securities and the use of the proceeds
from the sale of the Securities as described in the Prospectus under the
caption
“Use of Proceeds”) and compliance by the Company with its obligations hereunder,
have been duly authorized by all necessary corporate action and do not and
will
not, whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of,or
default or Repayment Event (as defined below) under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets
of
the Company or any subsidiary pursuant to, the Agreements and Instruments
(except for such conflicts, breaches, defaults or Repayment Events or liens,
charges or encumbrances that would not be reasonably likely to result in
a
Material Adverse Effect), nor will such action result in (C) any violation
of
the provisions of the charter or by-laws of the Company or any subsidiary
or (D)
except for such violations that would not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect, a violation
of
any applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their assets,
properties or operations. As used herein, a “Repayment Event” means any event or
condition which gives the holder of any note, debenture or other evidence
of
indebtedness (or any person acting on such holder’s behalf) the right to require
the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Company or any subsidiary of the Company.
(x) Absence
of Labor Dispute.
No
material labor dispute with the employees of the Company or any subsidiary
exists or, to the knowledge of the Company, is imminent, and the Company
is not
aware of any existing or imminent labor disturbance by the employees of any
of
its or any of its subsidiaries’ principal suppliers, manufacturers, customers or
contractors, which, in either case, would result in a Material Adverse
Effect.
(xi) Absence
of Proceedings.
There
is no claim, action, suit, proceeding, inquiry, audit, review or investigation
before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company, threatened against
the Company or any subsidiary of the Company, or, to the knowledge of the
Company, otherwise involving the Company or any subsidiary of the Company
which
is required to be disclosed in the Registration Statement (other than as
disclosed therein), or which would be
reasonably likely to
result
in a Material Adverse Effect, or which would be reasonably likely to materially
and adversely affect the consummation of the transactions contemplated in
this
Agreement or the performance by the Company of its obligations hereunder;
the
aggregate of all pending legal or governmental proceedings to which the Company
or any subsidiary is a party or of which any of their respective property
or
assets is the subject which are not described in the Registration Statement,
including ordinary routine litigation incidental to the Company’s conduct of its
business, would not be reasonably
likely to result
in
a Material Adverse Effect.
(xii) Absence
of Rulemaking or Similar Proceedings.
To the
Company’s knowledge, there are no rulemaking or similar proceedings before the
Food and Drug Administration, the Department of Health and Human Services,
the
Centers for Medicare and Medicaid Services or any other federal, state, local
or
foreign governmental bodies that regulate the Company’s or any of its
subsidiaries’ activities, which would reasonably be expected to have a Material
Adverse Effect.
(xiii) Accuracy
of Descriptions and Exhibits.
There
are no statutes, regulations, contracts or documents which are required to
be
described in the Registration Statement or the Prospectus or to be filed
as
exhibits thereto which have not been so described and filed as
required.
(xiv) Possession
of Intellectual Property.
The Company
and its subsidiaries own or license or have rights to use, make, sell, and
otherwise exploit, all Intellectual Property necessary for the conduct of
the
Company’s business as now conducted except as such failure to own or license
such rights would not have a Material Adverse Effect. To the knowledge of
theCompany,
there is no infringement, misappropriation or violation by other parties
of any
Intellectual Property described in the preceding sentence, except as such
infringement, misappropriation or violation would not reasonably be expected
to
have a Material Adverse Effect. There is no pending,
or,
to
the knowledge of the Company, threatened action, suit, proceeding or claim
by
others to which the Company or any of its subsidiaries is a party, or to
the
knowledge of the Company, otherwise challenging the Company’s or its
subsidiaries’ rights in or to, or exploitation of, any such Intellectual
Property, and the Company has
no
knowledge
of any
facts which would form a reasonable basis for any such claim. The Intellectual
Property owned by the Company and, to the knowledge of the Company, the
Intellectual Property licensed to the Company have not been adjudged invalid
or
unenforceable, in whole or in part, and there is no pending or, to
the
knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the validity or scope
of
any Intellectual Property, and the Company has
no
knowledge of
any
facts which would form a reasonable basis for any such claim. There is no
pending or to
the
knowledge of the Company, threatened
action, suit, proceeding or claim by others that the Company infringes,
misappropriates or otherwise violates any Intellectual Property or other
proprietary rights of others, and the Company has not received any written
notice of such claim and has no
knowledge
of any
other fact which would form a reasonable basis for any such claim. To the
Company’s knowledge, no employee or independent contractor of the Company is in
or
has
ever been in violation of any term
of
any employment contract, patent disclosure agreement, invention assignment
agreement, non-competition agreement, non-solicitation agreement, nondisclosure
agreement or any restrictive covenant to or with a former employer or
independent contractor where the basis of such violation relates to such
employee’s employment or independent contractor’s engagement with the Company or
actions undertaken while employed or engaged with the Company, except as
such
violation would not reasonably be expected to have a Material Adverse Effect.
“Intellectual
Property” shall mean all patents, patent rights, patent applications, trade and
service marks, trade and service ▇▇▇▇ registrations, trade names, copyrights,
licenses, inventions, trade secrets, technology, know-how and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures owned, licensed or used by the Company.
(xv) Absence
of Further Requirements.
No
filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is
necessary or required for the performance by the Company of its obligations
hereunder, in connection with the offering, issuance or sale of the Securities
hereunder or the consummation of the transactions contemplated by this
Agreement, except such as (i) have been already obtained or made, (ii) as
may be
required under the Act or the Rules and Regulations or state securities laws,
or
(iii) with respect to the listing of the Securities on the Nasdaq Global
Market
which will be made prior to the Closing.
(xvi) Absence
of Manipulation.
Neither
the Company nor, to the knowledge of the Company any affiliate of the Company
has taken, nor will the Company or, to the knowledge of the Company, any
affiliate take, directly or indirectly, any action which is designed to or
which
has constituted or which would be expected to cause or result in stabilization
or manipulation of the price of any security of the Company to facilitate
the
sale or resale of the Securities.
(xvii) Possession
of Licenses and Permits.
The
Company and its subsidiaries possess such regulatory and quasi-regulatory
permits, licenses, approvals, consents and other authorizations (collectively,
“Governmental Licenses”) issued by the appropriate federal, state, local or
foreign regulatory agencies or bodies necessary to conduct the business now
operated by them, except where the failure so to possess would not, singly
or in
the aggregate, reasonably
be expected to result
in
a Material Adverse Effect; the Company and its subsidiaries are incompliance
with the terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, reasonably
be expected to result
in
a Material Adverse Effect; all of the Governmental Licenses are valid and
in
full force and effect, except when the invalidity of such Governmental Licenses
or the failure of such Governmental Licenses to be in full force and effect
would not, singly or in the aggregate, reasonably
be expected to result
in
a Material Adverse Effect; and neither the Company nor any of its subsidiaries
has received notice of any proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would
reasonably
be expected to result
in
a Material Adverse Effect.
(xviii) Regulatory
Authorities.
Except
as described in the Prospectus, the
General Disclosure Package
and the
Registration Statement, each of the Company and its subsidiaries: (a) is
and at
all times has been in material compliance with all statutes, rules or
regulations applicable to the ownership, testing, development, manufacture,
packaging, processing, use, distribution, marketing, labeling, promotion,
sale,
offer for sale, storage, import, export or disposal of any product manufactured
or distributed by the Company (“Applicable Laws”); (b) has not received any FDA
Form 483, notice of adverse finding, warning letter, untitled letter or other
correspondence or notice from the U.S. Food and Drug Administration or any
other
federal, state or foreign governmental authority having authority over the
Company (“Governmental Authority”) alleging or asserting material noncompliance
with any Applicable Laws or any licenses, certificates, approvals, clearances,
authorizations, permits and supplements or amendments thereto required by
any
such Applicable Laws (“Authorizations”); (c) possesses all Authorizations
(except
as
would not reasonably be expected to have a Material Adverse Effect)
and such
Authorizations are valid and in full force and effect and are not in material
violation of any term of any such Authorizations (except
as
would not reasonably be expected to have a Material Adverse Effect);
(d) has
not received notice of any claim, action, suit, proceeding, hearing,
enforcement, investigation, arbitration or other action from any Governmental
Authority or third party alleging that any product, operation or activity
is in
violation of any Applicable Laws or Authorizations and have no knowledge
that
any such Governmental Authority or third party is considering any such claim,
litigation, arbitration, action, suit, investigation or proceeding; (e) has
not
received notice that any Governmental Authority has taken, is taking or intends
to take action to limit, suspend, modify or revoke any Authorizations and
has no
knowledge that any such Governmental Authority is considering such action;
and
(f) has filed, obtained, maintained or submitted all material reports,
documents, forms, notices, applications, records, claims, submissions and
supplements or amendments as required by any Applicable Laws or Authorizations
and that all such reports, documents, forms, notices, applications, records,
claims, submissions and supplements or amendments were materially complete
and
correct on the date filed (or were corrected or supplemented by a subsequent
submission).
The
studies, tests and preclinical and clinical trials conducted by or on behalf
of
the Company and each of its subsidiaries were and, if still pending, are
being
conducted in all material respects in accordance with experimental protocols,
procedures and controls pursuant to accepted professional scientific standards
and all Applicable Laws and Authorizations, including, without limitation,
the
Federal Food, Drug and Cosmetic Act and implementing regulations at 21 C.F.R.
Parts 50, 54, 56, 58 and 312; the descriptions of the results of such studies,
tests and trials contained in the Prospectus, the
General Disclosure Package
and the
Registration Statement are accurate and complete in all material respects
and
fairly present the data derived from such studies, tests and trials; except
to
the extent disclosed in the Prospectus, the
General Disclosure Package
and the
Registration Statement, the Company is not aware of any studies, tests or
trials
the results of which the Company believes reasonably call into question the
study, test, or trial results
described or referred to in the Prospectus, the
General Disclosure Package
and the
Registration Statement when viewed in the context in which such results are
described and the clinical state of development; and neither the Company
nor any
of its subsidiaries has received any notices or correspondence from any
Governmental Authority requiring the termination, suspension or material
modification of any studies, tests or preclinical or clinical trials after
they
were initiated and which were conducted by or on behalf of the Company or
any of
its subsidiaries.
(xix) Compliance
with Health Care Laws. Neither
the Company or any subsidiary, nor their respective officers, directors,
employees, agents and contractors (exercising their respective duties on
behalf
of the Company or any subsidiary), nor the Company’s or any subsidiary’s
business operations, is, or at any time has been, in violation of any Health
Care Laws, except where such violation would not reasonably be expected to
result in a Material Adverse Effect. “Health Care Laws” shall mean (i) the
federal Food, Drug and Cosmetic Act (21 U.S.C. § 321 et seq.), and the
regulations promulgated thereunder, (ii) all federal and state fraud and
abuse
laws, including, without limitation, the federal Anti-Kickback Statute (42
U.S.C. §1320a-7b(b)), the ▇▇▇▇▇ Law (42 U.S.C. § 1395nn), the Civil False Claims
Act (31 U.S.C. § 3729 et seq.), the Administrative False Claims Law (42 U.S.C. §
1320a-7b(a)), the Anti-Inducement Law (42 U.S.C. § 1320a-7a(a)(5)), Sections
1320a-7 and 1320a-7a of Title 42 of the United States Code and the regulations
promulgated pursuant to such statutes, (iii) the administrative simplification
provisions of the Health Insurance Portability and Accountability Act of
1996
(42 U.S.C. §§ 1320d-1320d-8), the regulations promulgated thereunder and
comparable state laws, (iv) the Controlled Substances Act (21 U.S.C. § 801 et
seq.), (v) Titles XVIII (42 U.S.C. § 1395 et seq.) and XIX (42 U.S.C. § 1396 et
seq.) of the Social Security Act and the regulations promulgated thereunder,
(vi) quality, safety and accreditation standards and requirements of all
applicable foreign or state laws or regulatory bodies, and (vii) any and
all
other applicable health care laws, regulations, manual provisions, policies
and
administrative guidance, each of (i) through (vii) as may be amended from
time
to time.
(xx) Title
to Property.
The
Company and its Subsidiary have good and marketable title to all real property
owned by the Company and its Subsidiary and good title to all other properties
owned by them, in each case, free and clear of all mortgages, pledges, liens,
security interests, claims, restrictions or encumbrances of any kind except
such
as (a) are described in the Prospectus and the
General Disclosure Package
or (b)
would not, singly or in the aggregate, materially adversely affect the value
of
such property, and do not interfere with the use made and proposed to be
made of
such property by the Company or any of its subsidiaries; and, except as
described in the Prospectus, all of the leases and subleases material to
the
business of the Company and its subsidiaries, taken as a whole, and under
which
the Company or any of its subsidiaries holds properties described in the
Prospectus and the
General Disclosure Package,
are in
full force and effect, and neither the Company nor any subsidiary has any
notice
of any material claim of any sort that has been asserted by anyone adverse
to
the rights of the Company or any subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company or
such
subsidiary to the continued possession of the leased or subleased premises
under
any such lease or sublease.
(xxi) Investment
Company Act.
The
Company is not required, and upon the issuance and sale of the Securities
as
herein contemplated and the application of the net proceeds therefrom as
described in the Prospectus and the
General Disclosure Package
will not
be required, to register as an “investment company” under the Investment Company
Act of 1940, as amended (the “1940 Act”).
(xxii) Environmental
Laws.
Except
as described in the Registration Statement, the
General Disclosure Package and the Prospectus
and
except as would not, singly or in the aggregate, reasonably
be expected to result
in
a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries
is in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial
or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of
human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products, asbestos-containing
materials or mold (collectively, “Hazardous Materials”) or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, “Environmental Laws”), (B) the
Company and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws (except
where the absence of such permits,
authorizations and approvals would
not
reasonably be expected to have a Material Adverse Effect)
and are
each in compliance with their requirements in all material respects, (C)
except
as described in the Prospectus, there are no pending or, to the knowledge
of the
Company, threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (D) except as described in the
Prospectus, and to the knowledge of the Company, there are no events or
circumstances that would reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private
party or governmental body or agency, against or affecting the Company or
any of
its subsidiaries relating to Hazardous Materials or any Environmental
Laws.
(xxiii) Registration
Rights.
There
are no persons with registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement or otherwise
registered by the Company under the Act, except under the Securities Purchase
Agreement by and between the Company and the Investors listed on the signature
pages thereto dated as of March 19, 2004, which rights have been
waived.
(xxiv) ERISA.
Each
employee benefit plan, within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), that is or has
been maintained, administered or contributed to by the Company or any
member of
any
group that includes or has included the Company (as determined under Section
414(b), (c), (m), or (o) of the Internal Revenue Code of 1986, as amended
(the
“Code”)) (a “Company Affiliate”) for their employees or former employees has
been maintained in compliance in all material respects with its terms and
the
requirements of any applicable statutes, orders, rules and regulations,
including but not limited to ERISA and the Code to the knowledge of the Company;
no prohibited transaction, within the meaning of Section 406 of ERISA or
Section
4975 of the Code, has occurred with respect to any such plan, excluding
transactions effected pursuant to a statutory or administrative exemption;
and
for each such plan that is subject to the funding rules of Section 412 of
the
Code or Section 302 of ERISA, there has not occurred any “accumulated funding
deficiency” within the meaning of Section 412 of the Code or Section 302 of
ERISA, respectively, whether or not waived, and the fair market value of
the
assets of each such plan (excluding for these purposes accrued but unpaid
contributions) exceeds the present value of all benefits accrued under such
plan
determined as of the plan’s most recent actuarial report using
the
actuarial assumptions set forth therein, and such actuarial assumptions are
reasonable in the aggregate. Neither the Company nor any Company Affiliate
has
incurred or is reasonably expected to incur any liability to any “multiemployer
plan” within the meaning of Section 3(37)or
4001(a)(3) of ERISA. Neither the Company nor any Company Affiliate has incurred
or is reasonably expected to incur any liability under any “welfare plan” within
the meaning of Section 3(1) of ERISA that provides benefits to retired or
terminated employees (other than as required by Section 4980B of the Code
or
Title I, Subtitle B, Part 6 of ERISA).
(xxv) Accounting
Controls.
The
Company and its subsidiaries maintain 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 value for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxvi) Insurance.
The
Company and its subsidiaries carry, or are covered by, insurance issued by
insurers in such amounts and covering such risks as the Company has determined
is reasonably adequate for the conduct of its business and the value of its
properties and as is customary for companies engaged in similar businesses
in
similar industries; and neither the Company nor any of its subsidiaries has
(i)
received written notice from any insurer or agent of such insurer that material
capital improvements or other material expenditures are required or necessary
to
be made in order to continue such insurance or (ii) any reason to believe
that
it will not be able to renew its existing insurance coverage as and when
such
coverage expires or to obtain similar coverage at reasonable cost from similar
insurers as may be necessary to continue its business. All such insurance
is
outstanding and duly in force on the date hereof (except
where failure would not reasonably be expected to have a Material Adverse
Effect).
(xxvii) Related
Party Transactions.
No
relationship, direct or indirect, exists between or among the Company or
any of
its subsidiaries, on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company or any of its subsidiaries, on the
other,
that is required by the Act to be described in the Registration Statement,
the
General Disclosure Package
and the
Prospectus and that is not so described therein.
(xxviii) Foreign
Corrupt Practices Act.
Neither
the Company nor any of its subsidiaries nor, to the knowledge of the Company,
any director, officer, agent, employee acting on behalf of the Company or
any of
its subsidiaries has (i) used any corporate funds for any unlawful contribution,
gift, entertainment or other unlawful expense relating to political activity;
(ii) made any direct or indirect unlawful payment to any foreign or domestic
government official or employee from corporate funds; (iii) violated or is
in
violation of any provision of the Foreign Corrupt Practices Act of 1977;
or (iv)
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment.
(xxix) Money
Laundering Laws.
The
operations of the Company and its subsidiaries are and have been conducted
at
all times in compliance with applicable financial recordkeeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as
amended, the money laundering statutes of all jurisdictions, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Money Laundering Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
(xxx) Statistical
and Market Data.
Nothing
has come to the attention of the Company that has caused the Company to believe
that the statistical and market-related data included in the Registration
Statement, the
General Disclosure Package
and the
Prospectus is not based on or derived from sources that are reliable and
accurate in all material respects.
(xxxi) ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act.
There
has been no failure on the part of the Company or to the knowledge of the
Company, on the part of any of the Company’s directors or officers, in their
capacities as such, to comply in all material respects with any applicable
provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act, including without limitation Section
402
related to loans.
(xxxii) Reports;
Aggregate Market Value.
The
Company (a) was subject to the requirements of Section 12 or 15(d) of the
Exchange Act and has filed all the material required to be filed pursuant
to
Section 13, 14 or 15(d) for a period of at least 36 calendar months immediately
preceding each of (1) the filing of the Registration Statement and (2) the
date
hereof and (b) filed in a timely manner all reports required to be filed
during
the twelve calendar months and any portion of a month immediately preceding
each
of (1) the filing of the Registration Statement and (2) the date hereof,
and if
the Company has used (during the twelve calendar months and any portion of
a
month immediately preceding each of (1) the filing of the Registration Statement
and (2) the date hereof) Rule 12b-25(b) under the Exchange Act with respect
to a
report or a portion of a report, that report or portion thereof has actually
been filed within the time period prescribed by that rule. The aggregate
market
value of the Company’s outstanding voting stock held be non-affiliates (using
the definition of “affiliate” provided in Securities Act Rule 405, as such rule
was in effect prior to October 21, 1992) of the Company, measured as of a
date
within 60 days prior to the date of filing of the Registration Statement,
was
$150 million or more. The
aggregate market value of the Company’s outstanding voting stock held by
non-affiliates (using the definition of “affiliate” provided in Securities Act
Rule 405, as such rule was in effect prior to October 21, 1992) of the Company,
measured as of a date within 60 days prior to the date hereof , was $100
million
or more and, as of the date hereof, the Company had an “annual trading volume”
of such stock of three million shares or more (“annual trading volume” shall be
the volume of shares traded in any continuous 12 month period ended within
60
days prior to the date hereof).
(xxxiii) ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇.
The
Company has a written ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ policy applicable to all officers and
directors of the Company. Unless the Placement Agents otherwise agree, in
their
sole discretion and in writing, prior to the 30th day following the Closing
Date, the Company will not fail to enforce the terms of its ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
policy.
(xxxiv) Certifications.
The
Chief Executive Officer and the Chief Operating Officer of the Company have
signed, and the Company has furnished to the Commission, all certifications
required by Sections 302 and 906 of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. Such certifications
contain no qualifications or exceptions to the matters certified therein
other
than such qualifications or exceptions as are part of the standard form of
certification promulgated by the Commission, and have not been modified or
withdrawn; and neither the Company nor any of its officers has received notice
from any governmental entity questioning or challenging the accuracy,
completeness, form or manner of filing or submission of such certifications.
The
Company is otherwise in compliance in all material respects with all applicable
provisions currently in effect of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the rules and
regulations issued thereunder by the Commission.
(xxxv) Taxes.
The
Company and each of its subsidiaries have timely filed all federal, state,
local
and foreign income and franchise tax returns required to be filed and is
not in
default in the payment of any taxes which were payable pursuant to said returns
or any assessments withrespect
thereto, other than any which the Company or any of its subsidiaries is
contesting in good faith or which are not material. There is no pending dispute
with any taxing authority relating to any of such returns and the Company
has no
knowledge of any proposed liability for any tax to be imposed upon the
properties or assets of the Company or any of its subsidiaries for which
there
is not an adequate reserve reflected in the Company’s financial statements
included in the Registration Statement.
(xxxvi) Stock
Options.
All
Company options have been appropriately authorized by the board of directors
of
the Company or an appropriate committee thereof, including approval of the
option exercise price or the methodology for determining the option exercise
price and the substantive option terms. All Company options reflect the fair
market value of the Company’s Common Stock as determined under Section 409A of
the Code on the date the option was granted (within the meaning of Treasury
Regulation §1.421-1(c)). No Company options have been retroactively granted, or
the exercise price of any Company option determined retroactively. All Company
options have been properly accounted for by the Company in accordance with
GAAP,
and no change is expected in respect of any prior Company Financial Statement
relating to expenses for stock compensation. There is no pending audit,
investigation or inquiry by any governmental agency or by the Company with
respect to the Company’s stock option granting practices or other equity
compensation practices.
(xxxvii) Listing
on Nasdaq Global Market. The
Common Stock of the Company is listed on the Nasdaq Global Market under the
ticker symbol “NRGN.” The Company has not received any notice that it is not in
compliance with the listing requirements of the Nasdaq Global Market. The
Company is, and has no reason to believe that it will not in the foreseeable
future continue to be (except as a result of minimum trading price
requirements), in compliance with all such listing requirements. There are
no
affiliations with the NASD among the Company’s officers or directors. A
registration statement relating to the Common Stock on Form 8-A or other
applicable form under the Exchange Act has become effective.
(b) Officer’s
Certificates.
Any
certificate signed by any officer of the Company or any of its subsidiaries
delivered to the Representative or to counsel for the Placement Agents shall
be
deemed a representation and warranty by the Company to each Placement Agent
as
to the matters covered thereby.
SECTION
3. Covenants
of the Company.
The
Company covenants with each Placement Agent as follows:
(a) Compliance
with Securities Regulations and Commission Requests.
The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A
or Rule 424, as applicable, and will notify the Representative promptly,
and
confirm the notice in writing, (i) when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the
Prospectus or any amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment
or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the
Registration Statement or of any order preventing or suspending the use of
the
Prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening
of any
proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it
deems
necessary to ascertain promptly whether the form ofprospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such
prospectus. The Company will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing
of Amendments.
The
Company will give the Representative notice of its intention to file or prepare
any amendment to the Registration Statement (including any filing under Rule
462(b)) or any amendment, supplement or revision to the Prospectus, will
furnish
the Representative with copies of any such documents a reasonable amount
of time
prior to such proposed filing or use, as the case may be, and will not file
or
use any such document to which the Placement Agents or counsel for the Placement
Agents shall reasonably object in writing, except as required pursuant to
legal
or administrative order or process.
(c) Delivery
of Registration Statements.
The
Company has furnished or will deliver to the Representative and counsel for
the
Placement Agents, without charge, signed copies of the Registration Statement
as
originally filed and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to the
Representative, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for
each of
the Placement Agents. The copies of the Registration Statement and each
amendment thereto furnished to the Placement Agents will be identical to
the
electronically transmitted copies thereof filed with the Commission pursuant
to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) Delivery
of Prospectuses.
The
Company will furnish to each Placement Agent, without charge, during the
period
when the Prospectus is required to be delivered under the Act (including
in
circumstances where such requirement may be satisfied pursuant to Rule 172),
such number of copies of the Prospectus (as amended or supplemented) as such
Placement Agent may reasonably request. The Prospectus and any amendments
or
supplements thereto furnished to the Placement Agents will be identical to
the
electronically transmitted copies thereof filed with the Commission pursuant
to
▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(e) Continued
Compliance with Securities Laws.
The
Company will comply with the Act and the Rules and Regulations so as to permit
the completion of its sale of the Securities as contemplated in this Agreement
and in the Prospectus. If at any time when a prospectus is required by the
Act
to be delivered in connection with sales of the Securities (including in
circumstances where such requirement may be satisfied pursuant to Rule 172),
any
event shall occur or condition shall exist as a result of which it is necessary
to amend the Registration Statement or amend or supplement the Prospectus
in
order that the Prospectus will not include any untrue statements of a material
fact or omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it
is delivered to an Investor, or if it shall be necessary at any such time
to
amend the Registration Statement or amend or supplement the Prospectus in
order
to comply with the requirements of the Act or the Rules and Regulations,
the
Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply
with
such requirements, and the Company will furnish to the Placement Agents such
number of copies of such amendment or supplement as the Placement Agents
may
reasonably request.
If at
any time following the issuance of an Issuer-Represented Free Writing Prospectus
there occurred or occurs an event or development as a result of which such
Issuer-Represented Free Writing Prospectus conflicted or would conflict with
the
information contained in theRegistration
Statement or included or would include an untrue statement of a material
fact or
omitted or would omit to state a material fact necessary in order to make
the
statements therein, in the light of the circumstances prevailing at that
subsequent time, not misleading, the Company will promptly notify the
Representative and will promptly amend or supplement, at its own expense,
such
Issuer-Represented Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
(f) Blue
Sky Qualifications.
The
Company shall cooperate with the Placement Agents to qualify the Securities
for
offering and sale under the applicable securities laws of such states and
other
domestic jurisdictions as the Placement Agents may designate and to maintain
such qualifications in effect for a period of not less than one year from
the
later of the effective date of the Registration Statement and any Rule 462(b)
Registration Statement; provided,
however,
that
the Company shall not be obligated to file any general consent to service
of
process or to qualify as a foreign corporation or as a dealer in securities
in
any jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not
otherwise so subject.
(g) Rule
158.
The
Company will timely file such reports pursuant to the Exchange Act as are
necessary in order to make generally available to its securityholders as
soon as
practicable an earnings statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a) of the
Act.
(h) Compliance
with Registration Statement. The
Company will comply with all the undertakings contained in the Registration
Statement.
(i) Press
Releases.
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 or any of its subsidiaries, the condition, financial or
otherwise, or the earnings or business affairs of any of them, or the offering
of the Securities without the prior consent of the Representative unless
in the
judgment of the Company and its counsel, and after reasonable notification
to
the Placement Agents (giving effect to the basis of such required disclosure),
such press release or communication is required by law.
(j) Use
of Proceeds.
The
Company will use the net proceeds received by it from the sale of the Securities
in the manner specified in the Prospectus under “Use of Proceeds”.
(k) Restriction
on Sale of Securities.
During
a period of thirty (30) days from the date of the Final Prospectus Supplement,
the Company will not, without the prior written consent of the Representative,
(i) directly or indirectly, offer, pledge, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell,
grant
any option, right or warrant to purchase or otherwise transfer or dispose
of any
share of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock or file any registration statement under the
Act
(other than on Form S-8 or any successor form) with respect to any of the
foregoing or (ii) enter into any swap or any other agreement or any transaction
that transfers, in whole or in part, directly or indirectly, the economic
consequence of ownership of the Common Stock, whether any such swap or
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Securities to be sold hereunder, (B)
any
shares of Common Stock issued by the Company upon the exercise of an option
or
warrant or the conversion of a security outstanding on the date hereof and
referred to in the Prospectus, (C) any shares of Common Stock issued or options
to purchase Common Stock granted pursuant to existingemployee
benefit plans of the Company or (D) any shares of Common Stock issued or
options
to purchase Common Stock granted pursuant to any non-employee director stock
plan or dividend reinvestment plan.
(l) Reporting
Requirements.
The
Company, during the period when the Prospectus is required to be delivered
under
the Act, will file all documents required to be filed with the Commission
pursuant to the Exchange
Act
within the time periods required by the Exchange Act and the rules and
regulations of the Commission thereunder.
(m) Listing.
The
Company will use its commercially reasonable efforts to effect and maintain
the
quotation of the Securities on the Nasdaq Global Market.
(n) Issuer
Free Writing Prospectuses.
The
Company represents and agrees that, unless it obtains the prior consent of
the
Placement Agents, it has not made and will not make any offer relating to
the
Securities that would constitute an “issuer free writing prospectus,” as defined
in Rule 433, or that would otherwise constitute a “free writing prospectus,” as
defined in Rule 405, required to be filed with the Commission. Any such free
writing prospectus consented to by the Company and the Placement Agents is
hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company
represents that it has treated or agrees that it will treat each Permitted
Free
Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule
433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely filing
with the Commission where required, legending and record keeping.
SECTION
4. Payment
of Expenses; Termination
(a) Expenses.
The
Company will pay or cause to be paid all expenses incident to the performance
of
its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements
and
exhibits) as originally filed and of each amendment thereto, (ii) the
preparation, issuance and delivery of the certificates for the Securities
to the
Investors, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Investors, (iv) the fees and disbursements of the Company’s counsel,
accountants and other advisors, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f)
hereof, including filing fees and the reasonable fees and disbursements of
counsel for the Placement Agents in connection therewith and in connection
with
the preparation of the Blue Sky Survey and any supplement thereto (not to
exceed
$10,000), (vi) the printing and delivery to the Placement Agents of copies
of the Prospectus and any amendments or supplements thereto and any Permitted
Free Writing Prospectus (including without limitation any costs associated
with
electronic delivery of these materials), (vii) the preparation, printing
and delivery to the Placement Agents of copies of the Blue Sky Survey and
any
supplement thereto, (viii) the fees and expenses of any transfer agent or
registrar for the Securities, (ix) the costs and expenses of the Company
relating to investor presentations and (x) the fees and expenses incurred
in
connection with the inclusion of the Securities in the Nasdaq Global Market.
(b) Termination
of Agreement.
If this
Agreement is terminated by the Placement Agents in accordance with the
provisions of Section 5(l), Section 9(a)(i) or Section 10 hereof, the Company
shall reimburse the Placement Agents for all of their reasonable out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for
the
Placement Agents, in each case as actually incurred by them in connection
with
this Agreement and the proposed sale of the Securities or in contemplation
of
their performance of their obligations hereunder.
(c) Conditions
of Placement Agents’ Obligations.
The
obligations of the several Placement Agents hereunder are subject to the
accuracy of the representations and warranties of the Company contained in
Section 2 hereof or in certificates of any officer of the Company or any
subsidiary of the Company pursuant to the provisions hereof, to the performance
by the Company in all material respects of its covenants and other obligations
hereunder required to be performed or satisfied prior to the Closing Date,
and
to the following further conditions:
(d) Effectiveness
of Registration Statement.
The
Registration Statement continues to be effective and at the Closing Date
no stop
order suspending the effectiveness of the Registration Statement shall have
been
issued under the Act or proceedings therefor initiated or threatened by the
Commission, and any request on the part of the Commission for additional
information shall have been complied with to the reasonable satisfaction
of
counsel to the Placement Agents. A prospectus shall have been filed with
the
Commission in accordance with Rule 424(b).
(e) Opinion
of Counsel for Company.
On the
Closing Date, the Representative shall have received the favorable opinion,
dated as of the Closing Date, of Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP,
counsel
for the Company, in form and substance satisfactory to counsel for the Placement
Agents, to the effect set forth in Exhibit C-1 hereto. On the Closing Date,
the
Representative shall have received the favorable opinion, dated as of the
Closing Date, of ▇▇▇▇▇▇▇
▇▇▇▇, Esq.,
chief
corporate counsel for the Company, in form and substance satisfactory to
counsel
for the Placement Agents, to the effect set forth in Exhibit C-2
hereto.
(f) Opinion
of Counsel for Placement Agents.
On the
Closing Date, the Representative shall have received the favorable opinion,
dated as of the Closing Date, of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel for the
Placement Agents, in form and substance satisfactory to the Placement
Agents.
(g) Accountant’s
Comfort Letter.
The
Representative shall have received from PricewaterhouseCoopers LLP a letter
dated the date of the execution of this Agreement, in form and substance
satisfactory to the Placement Agents, containing statements and information
of
the type ordinarily included in accountants’ “comfort letters” with respect to
the financial statements and certain financial information contained in or
incorporated by reference into the Registration Statement and the
Prospectus.
(h) Bring-down
Comfort Letter.
On the
Closing Date, the Representative shall have received from PricewaterhouseCoopers
LLP a letter, dated as of the Closing Date, to the effect that they reaffirm
the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the specified date referred to shall be a date not more
than three business days prior to the Closing Date.
(i) Lock-up
Agreements.
At the
date of this Agreement, the Representative shall have received an agreement
substantially in the form of Exhibit D hereto signed by the persons listed
on
Schedule
B
hereto.
(j) Officers’
Certificate.
On the
Closing Date, there shall not have been, since the date hereof or since the
respective dates as of which information is given in the Prospectus or the
General Disclosure Package, any material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Company
and its subsidiaries taken as a whole, whether or not arising in the ordinary
course of business, and the Representative shall have received a certificate
of
the President or a Vice President of the Company and of the chief financial
or
chief accounting officer of the Company, dated as of the Closing Date, to
the
effect that (i) there has been no such material adverse change,
(ii) therepresentations
and warranties in Section 2(a) hereof are true and correct with the same
force and effect as though expressly made at and as of the Closing Date,
(iii) the Company has complied in all material respects with all agreements
and satisfied all conditions on its part to be performed or satisfied at
or
prior to the Closing Date, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and, to their
knowledge, no proceedings for that purpose have been instituted or are
pending.
(k) Escrow
Agreement/Purchase Agreements.
The
Company shall have entered into the Escrow Agreement and one or more Investors
shall have entered into the Purchase Agreements and deposited funds into
the
Escrow Agreement in accordance with Section 1 above and the Escrow Agreement.
The Escrow Agent shall be prepared to release the fees due to the Placement
Agents from the Escrow Account.
(l) NASD
Matters.
The
NASD shall, if applicable, have confirmed that it has not raised any objection
with respect to the fairness and reasonableness of the placement agency terms
and arrangements.
(m) Nasdaq
Global Market Listing.
The
Securities shall have been approved for trading on Nasdaq Global Market,
and any
necessary filings with Nasdaq Global Market in connection therewith, including
any required notification form relating to the listing of additional shares,
shall have been made in compliance with time periods required by Nasdaq Global
Market.
(n) Additional
Information.
On or
prior to the Closing Date, the Representative and counsel to the Placement
Agents shall have been furnished with such information, certificates and
documents as they may reasonably require for the purpose of enabling them
to
pass upon the issuance and sale of the Securities as contemplated herein
and
related proceedings, or to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained,
or
otherwise in connection with the Offering contemplated hereby; and all opinions
and certificates mentioned above or elsewhere in this Agreement shall be
reasonably satisfactory in form and substance to the Placement Agents and
counsel for the Placement Agents.
The
Company will furnish the Placement Agents with such conformed copies of such
opinions, certificates, letters and other documents as they shall reasonably
request.
(o) Termination
of Agreement.
(i) If
any
condition specified in this Section shall not have been fulfilled when and
as
required to be fulfilled, this Agreement may be terminated by the Placement
Agents by written notice to the Company at any time at or prior to the Closing
Date, and such termination shall be without liability of any party to any
other
party except as provided in Section 4 and except that Sections 2, 6, 7 and
8
shall survive any such termination and remain in full force and effect.
(ii) If
none
of the Securities have been sold pursuant to the Purchase Agreements by the
date
which is thirty (30) days after the date of this Agreement solely due to
the
failure of the condition set forth in Section 5(g) or 5(h) above, this Agreement
may be terminated by the Company by written notice to the Representative,
and
such termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 6 and 7 shall survive
any such termination and remain in full force and effect.
SECTION
5. Indemnification.
SECTION
6. Indemnification
of Placement Agents.
The
Company agrees to indemnify
and hold harmless the each Placement Agent, its affiliates, as such term
is
defined in Rule 501(b) under the Act (each, an “Affiliate”), its employees and
agents and each person, if any, who controls any Placement Agent within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act as
follows:
(i) against
any and all loss, liability, claim, damage and expense whatsoever arising
out of
any untrue statement or alleged untrue statement of a material fact contained
in
the Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated therein
or
necessary to make the statements therein not misleading or arising out of
any
untrue statement or alleged untrue statement of a material fact included
in the
General Disclosure Package, any Issuer-Represented Free Writing Prospectus
or
the Prospectus (or any amendment or supplement thereto), or the omission
or
alleged omission therefrom of a material fact necessary in order to make
the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against
any and all loss, liability, claim, damage and expense whatsoever to the
extent
of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or
threatened, or of any claim whatsoever based upon any such untrue statement
or
omission, or any such alleged untrue statement or omission; provided that
(subject to Section 6(d) below) any such settlement is effected with the
written
consent of the Company; and
(iii) against
any and all expense whatsoever (including the fees and disbursements of counsel
chosen by the Placement Agents), reasonably incurred in investigating, preparing
or defending against any litigation, or any investigation or proceeding by
any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under
(i)
or (ii) above;
provided,
however,
that
this indemnity agreement shall not apply to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission
or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by any Placement Agent
through
the Representative expressly for use in the Registration Statement (or any
amendment thereto), any Issuer-Represented Free Writing Prospectus or the
Prospectus.
(b)
Indemnification
of Company, Director, Officers, Agents and Employees.
Each
Placement Agent severally agrees to indemnify and hold harmless the Company,
its
directors, each of its officers, agents and employees, and each person, if
any,
who controls the Company within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, against any and all loss, liability, claim, damage
and
expense described in the indemnity contained in subsection (a) of this Section,
but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto), or any Issuer-Represented Free Writing Prospectus or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity
with
written information furnished to the Company by such Placement Agent through the
Representative expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any amendment
or
supplement thereto).
(c) Actions
against Parties; Notification.
Each
indemnified party shall give notice as promptly as reasonably practicable
to
each indemnifying party of any action commenced against it in respect of
which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not
relieve such indemnifying party from any liability hereunder to the extent
it is
not materially prejudiced as a result thereof and in any event shall not
relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a)
above, the Company shall be entitled to assume the defense of any action
or
proceeding with counsel reasonably satisfactory to the indemnified party.
Upon
assumption by the Company of the defense of any such action or proceeding,
the
indemnified party shall have the right to participate in such action or
proceeding and to retain its own counsel but the Company shall not be liable
for
any legal expenses of such counsel retained by such indemnified party in
connection with the defense thereof unless (i) the Company has agreed to
pay
such fees and expenses, (ii) the Company shall have failed to employ counsel
reasonably satisfactory to the indemnified party in a timely manner, or (iii)
the indemnified party shall have been advised by counsel that there are actual
or potential conflicting interests between the Company and the indemnified
party, including situations in which there are one or more legal defenses
available to the indemnified party that are different from or additional
to
those available to the Company; provided,
however,
that
the Company shall not, in connection with any one such action or proceeding
or
separate but substantially similar actions or proceedings in the same
jurisdiction arising out of the same general allegations, be liable for the
fees
and expenses of more than one separate firm of attorneys at any time for
all
indemnified parties. The Company will not settle, compromise or consent to
the
entry of any judgment in any pending or threatened claim, action or proceeding
in respect of which indemnification could be sought under this Section 6
or 7
(whether or not any indemnified party is an actual or potential party to
such
claim, action or proceeding), unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action or proceeding. The Company shall not have
any
liability with respect to any settlement, compromise or consent to the entry
of
any judgment in any pending or threatened claim, action or proceeding entered
into or made by any indemnified party in respect of which indemnification
or
contribution could be sought under this Section 6 or 7 (whether or not the
any
indemnified party is an actual or potential party to such claim, action or
proceeding), without the prior written consent of the Company.
(d) Settlement
without Consent if Failure to Reimburse.
If at
any time an indemnified party shall have requested an indemnifying party
to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent
if
(i) such settlement is entered into more than 90 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party
shall
have received notice of the terms of such settlement at least 45 days prior
to
such settlement being entered into and (iii) such indemnifying party shall
not
have reimbursed such indemnified party in accordance with such request prior
to
the date of such settlement, unless there is a bona
fide
dispute
between such indemnifying party and indemnified party regarding such
reimbursement of such fees and expenses and the indemnifying party shall
have
fully reimbursed the indemnified party for all undisputed fees and
expenses.
(e) Placement
Agents’ Information.
The
parties hereto acknowledge and agree that the statements set forth in the
second
sentence of the third paragraph and the seventh and eighth paragraphs under
the
heading “Plan of Distribution” in the Prospectus Supplement constitute the only
written information relating to any Placement Agent furnished to the Company
by
any Placement Agent through the Representative expressly for use in the
Registration Statement (or any amendment thereto), Prospectus (or any amendment
or supplement thereto) and the General Disclosure Package, including for
purposes of Sections 2(a)(i), 6(a) and 6(b) hereof.
SECTION
7. Contribution.
SECTION
8. If
the
indemnification provided for in Section 6 hereof is for any reason
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, liabilities, claims, damages or expenses referred to therein,
then each indemnifying party shall contribute to the aggregate amount of
such
losses, liabilities, claims, damages and expenses incurred by such indemnified
party, as incurred, (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the Placement
Agents, on the other hand, from the offering of the Securities pursuant to
this
Agreement or (ii) if the allocation provided by clause (i) is not permitted
by
applicable law, in such proportion as is appropriate to reflect not only
the
relative benefits referred to in clause (i) above but also the relative fault
of
the Company on the one hand and of the Placement Agents on the other hand
in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The
relative benefits received by the Company on the one hand and the Placement
Agents on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as (x) the net proceeds from the offering of the Securities pursuant
to this Agreement received by the Company and (y) the
total
fees received by the Placement Agents pursuant to Section 1(b) hereof
bear
to
the sum of (x) and (y).
The
relative fault of the Company on the one hand and the Placement Agents on
the
other hand shall be determined by reference to, among other things, whether
any
such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied
by the
Company or by the Placement Agents and the parties’ relative intent, knowledge,
access to information and opportunity to correct or prevent such statement
or
omission.
The
Company and the Placement Agents agree that it would not be just and equitable
if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Placement Agents were treated as one entity for such
purpose) or by any other method of allocation which does not take account
of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed
to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or
any
investigation or proceeding by any governmental agency or body, commenced
or
threatened, or any claim whatsoever based upon any such untrue or alleged
untrue
statement or omission or alleged omission.
Notwithstanding
the provisions of this Section 7, no Placement Agent shall be required to
contribute any amount in excess of the total fee received by such Placement
Agent pursuant to Section 1(b) hereof.
No
person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of
the Act) shall be entitled to contribution from any person who was not guilty
of
such fraudulent misrepresentation.
For
purposes of this Section 7, each person, if any, who controls a Placement
Agent
within the meaning of Section 15 of the Act or Section 20 of the Exchange
Act
and each Placement Agent’s Affiliates, employees and agents shall have the same
rights to contribution as such Placement Agent, and each director, officer,
agent and employee of the Company, and each person, if any, who controls
the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as the Company.
Any
party
entitled to contribution will, promptly after receipt of notice of commencement
of any action, suit or proceeding against such party in respect of which
a claim
for contribution may be made against another party or parties under this
Section 7, notify such party or parties from whom contribution may
be
sought, but the omission so to notify such party or parties from whom
contribution may be sought shall not relieve the party or parties from whom
contribution may be sought from any other obligation it or they may have
hereunder or otherwise than under this Section 7. No party shall be liable
for contribution with respect to any action, suit, proceeding or claim settled
without its written consent. The Placement Agents’ obligations to contribute
pursuant to this Section 7 are several in proportion to their respective
amounts of placement agent fees each has actually received pursuant to this
Agreement and not joint.
SECTION
9. Representations and
Agreements to Survive Delivery.
All
representations, warranties, and agreements contained in this Agreement or
in
certificates of officers of the Company or any of its subsidiaries submitted
pursuant hereto shall remain operative and in full force and effect regardless
of (i) any investigation made by or on behalf of any Placement Agent or its
Affiliates or selling agents, any person controlling any Placement Agent,
its
officers or directors or any person controlling the Company, and (ii) delivery
of and payment for the Securities.
SECTION
10. Termination
of Agreement.
(a) Termination;
General.
The
Placement Agents may terminate this Agreement, by notice to the Company,
at any
time at or prior to the Closing Date (i) if there has been, since the time
of
execution of this Agreement or since the respective dates as of which
information is given in the Prospectus or the General Disclosure Package,
any
material adverse change in the condition, financial or otherwise, or in the
earnings or business affairs of the Company and its subsidiaries taken as
a
whole, whether or not arising in the ordinary course of business, so material
and adverse as to make it impractical or inadvisable to proceed with the
placement or (ii) if there has occurred any material adverse change in the
financial markets in the United States or the international financial markets,
any outbreak of hostilities or escalation thereof or other calamity or crisis
or
any change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Placement Agents,
impracticable or inadvisable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of
the Company has been suspended or materially limited by the Commission or
the
Nasdaq Global Market, or if trading generally on the New York Stock Exchange
or
in the Nasdaq Global Market has been suspended or materially limited, or
minimum
or maximum prices for trading have been fixed, or maximum ranges for prices
have
been required, by any of said exchanges or by such system or by order of
the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) a material disruption has occurred in
commercial banking or securities settlement or clearance services in the
United
States or (v) if a banking moratorium has been declared by either Federal
or New
York authorities. Notice of any termination of this Agreement shall be promptly
given to the Company by telecopy or telephone and shall be subsequently
confirmed by letter.
(b) Liabilities.
If this
Agreement is terminated pursuant to this Section, such termination shall
be
without liability of any party to any other party except as provided in Section
4 hereof, and provided further that Sections 2, 6, 7 and 8 shall survive
such
termination and remain in full force and effect.
SECTION
11. Default
by the Company.
If
the
Company shall fail at the Closing Date to sell the number of Securities that
it
is obligated to sell hereunder due exclusively to its failure to perform
its
obligations to deliver the Securities as contemplated hereunder against payment
therefore and no alternate delivery arrangements are arranged and
agreed between the Company and the Placement Agent, then this Agreement shall
terminate without any liability on the part of any nondefaulting party;
provided,
however,
that
the provisions of Sections 2, 4, 6, 7 and 8 shall remain in full force and
effect. No action taken pursuant to this Section shall relieve the Company
from
liability, if any, in respect of such default.
SECTION
12. Notices.
All
notices and other communications hereunder shall be in writing and shall
be
deemed to have been duly given if mailed or transmitted by any standard form
of
telecommunication. Notices to the Placement Agents shall be directed to
the
Representative at ▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
attention of ▇▇▇▇▇▇▇
▇▇▇▇▇▇;
notices
to the Company shall be directed to it at ▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, attention
of ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, Chief Operating Officer, with a copy to Milbank, Tweed, ▇▇▇▇▇▇
&
▇▇▇▇▇▇ LLP, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇
▇.
▇▇▇▇▇▇▇▇, Esq.
SECTION
13. Parties.
This
Agreement shall inure to the benefit of and be binding upon the Placement
Agents
and the Company and their respective successors. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person, firm
or
corporation, other than the Placement Agents, the Company and their respective
successors and the controlling persons and officers and directors referred
to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or
any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Placement
Agents, the Company and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation.
SECTION
14. GOVERNING
LAW.
THIS
AGREEMENT (INCLUDING ANY CLAIM OR CONTROVERSY ARISING OUT OF OR RELATING
TO THIS
AGREEMENT) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE
STATE OF NEW YORK, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THAT
WOULD RESULT IN THE APPLICATION OF ANY LAW OTHER THAN THE LAW OF THE STATE
OF
NEW YORK.
SECTION
15. TIME.
TIME
SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH
HEREIN,
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION
16. Counterparts.
This
Agreement may be executed (including by facsimile) in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
SECTION
17. Effect
of Headings.
The
Section headings herein are for convenience only and shall not affect the
construction hereof.
[Signature
Page Follows]
If
the
foregoing is in accordance with your understanding of our agreement, please
sign
and return to the Company a counterpart hereof, whereupon this instrument,
along
with all counterparts, will become a binding agreement among the Placement
Agent
and the Company in accordance with its terms.
Very
truly,
Neurogen
Corporation
By:
Name: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
Title: Chief
Operating Officer
Confirmed
as of the date first
above
mentioned.
Pacific
Growth Equities, LLC
By:
Name: ▇▇▇▇
▇▇▇▇▇▇
Title: Chairman
CIBC
World Markets Corp.
By:
Name:
Title:
Leerink
▇▇▇▇▇ & Company
By:
Name:
Title:
▇▇▇▇▇▇▇▇
Curhan Ford & Co.
By:
Name:
Title:
SCHEDULE
A
Warburg
▇▇▇▇▇▇
▇▇▇▇▇
Brothers Investments
▇▇▇▇▇▇
▇.
▇▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇▇
▇▇▇▇▇
▇.
▇▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇▇
▇▇▇▇
▇.
▇▇▇▇▇
SCHEDULE
B
▇▇▇▇▇
▇.
▇▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
▇▇▇▇
▇.
▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇.
▇▇▇▇▇▇
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SCHEDULE
C
| · |
Issuer
Free Writing Prospectus filed by the Company with the SEC pursuant
to Rule
433 on December 19, 2006.
|
EXHIBIT
A
FORM
OF ESCROW AGREEMENT
EXHIBIT
B
PURCHASE
AGREEMENT
Neurogen
Corporation
▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Ladies
and Gentlemen:
The
undersigned, __________________________________
(the
“Investor”),
hereby confirms its agreement with you as follows:
This
Purchase Agreement (the “Agreement”)
is
made as of December 18,
2006
between Neurogen Corporation, a Delaware corporation (the “Company”),
and
the Investor.
The
Company has authorized the sale and issuance of up to 6,993,000 shares
(the
“Securities”)
of
common stock, par value $0.025 per share (the “Common
Stock”),
of
the Company to certain investors (the “Offering”).
The
Offering and issuance of the Securities have been registered under the
Securities Act of 1933, as amended (the “Act”),
pursuant to the Company’s Registration Statement on Form S-3, initially
filed on August 16, 2002 (No. 333-98237), as amended (the “Registration
Statement”).
The
Company and the Investor agree that the Investor will purchase from the
Company
and the Company will issue and sell to the Investor ___________________
Securities, for a purchase price of $5.72 per share or an aggregate purchase
price of $ ________________,
pursuant to the Terms and Conditions for Purchase of Securities attached
hereto
as Annex
I
and
incorporated herein by reference as if fully set forth herein. The Investor
acknowledges that the offering is not being underwritten by the Placement
Agents
(as defined in the Placement Agency Agreement dated December 18, 2006,
between
the Company and the Placement Agents (the “Placement
Agency Agreement”))
and
that there is no minimum offering amount. Certificates representing the
shares
of Common Stock purchased by the Investor will not be issued to the Investor;
instead, such shares of Common Stock will be credited to the Investor using
customary procedures for book-entry transfer through the facilities of
The
Depository Trust Company (“DTC”).
This
offering will not clear directly through the Placement Agents acting in
such
capacity. Consequently, the Investor must instruct their individual broker
how
to settle the transaction.
The
Investor represents that, except as fully described on Annex
II
attached
hereto, (a) it has had no position, office or other material relationship
within the past three years with the Company or persons known to it to
be
affiliates of the Company, (b) neither it, nor any group of which it is a
member or to which it is related, beneficially owns (including the right
to
acquire or vote) any securities of the Company, (c) it has no direct or
indirect affiliation or association with any NASD member as of the date
hereof
and (d) after giving effect to the Offering, neither the undersigned Investor
nor any group of Investors (as identified in a public filing
made with the Commission) of which the undersigned Investor is a part,
in
connection with the offering of the Shares will acquire, or obtain the
right to
acquire, 20% or more of the Common Stock (or securities convertible or
exercisable for Common Stock) or the voting power of the Company.
The
Investor hereby consents to the receipt of the Company’s prospectus supplement,
dated December 18, 2006 (the “Prospectus
Supplement”)
and
the accompanying base prospectus, dated February 13, 2003 (the “Base
Prospectus”
and
together with the Prospectus Supplement, the “Prospectus”),
in
portable document format, or PDF, via electronic mail.
Your
attention is directed to the “Instruction Sheet for Investors” attached hereto
for directions regarding this Purchase Agreement.
[signatures
follow]
************
Please
confirm that the foregoing correctly sets forth the agreement between us
by
signing in the space provided below for that purpose.
Name
of
Investor:
By:
Title:
Address:
Tax
ID
No:
Contact
Name:
Telephone:
Name
in
which
book-entry
should
be
made
(if
different):
Name
of
Broker:
Broker’s
DTC No.:
Broker’s
ID No.: _________________________
Broker
Contact Name: ____________________
Broker
Telephone: _______________________
Number
of
Securities Purchased:
AGREED
AND ACCEPTED:
NEUROGEN
CORPORATION,
a
Delaware corporation
By:
Name:
Title:
ANNEX
I
TERMS
AND CONDITIONS FOR PURCHASE OF SECURITIES
1. Authorization
and Sale of Securities.
The
Company has authorized the sale of up to 6,993,000 Securities. The Company
reserves the right to increase or decrease this number in its sole discretion.
2. Agreement
to Sell and Purchase the Securities; Subscription Date.
2.1 Upon
the
terms and subject to the conditions hereinafter set forth, at the Closing
(as
defined in Section 3), the Company will sell to the Investor, and the
Investor will purchase from the Company, the number of Securities
set forth on the signature page hereto, at the purchase price set forth
in the
fourth paragraph of the Purchase Agreement to which this Annex
I
is
attached.
2.2 The
Company may enter into agreements similar to this Agreement with certain
other
investors (the “Other
Investors”)
and
expects to complete sales of Securities to them. (The Investor and the
Other
Investors are hereinafter sometimes collectively referred to as the
“Investors”,
and
this Agreement and the purchase agreements executed by the Other Investors
are
hereinafter sometimes collectively referred to as the “Agreements.”)
3. Delivery
of the Securities at Closing.
Concurrently with the execution and delivery of this Agreement, the Investor
shall deliver to American Stock Transfer & Trust Company (the “Escrow
Agent”),
pursuant to the wire instructions set forth on Annex
III
or as
otherwise directed by the Placement Agents, a wire transfer of immediately
available funds in the full amount of the purchase price for the Securities
being purchased hereunder as set forth in the fourth paragraph of the Purchase
Agreement to which this Annex
I
is
attached. The Escrow Agent will invest such funds in a non-interest bearing
account (the “Escrow
Account”)
in
accordance with Rule 15c2-4 under the Securities Exchange Act of 1934,
as
amended (the “Exchange
Act”).
The
Escrow Agent will not accept any Investor funds until the date of the Prospectus
Supplement. The Company will deposit the Securities with DTC upon receiving
notice from the Placement Agents. The Company or the Placement Agents may
accept
or reject any proposed purchase of Securities, in whole or in part, or
Agreements in their sole discretion. The completion of the purchase and
sale of
the Securities (the “Closing”)
shall
occur on December 21,
2006
(the “Closing
Date”)
or
such other time as shall be agreed upon by the Company and the Placement
Agents,
at the offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. At the Closing, and upon satisfaction of the conditions
set forth in this Agreement and the Placement Agency Agreement, the Company
shall deliver to the Investor, using customary book-entry procedures, the
number
of Securities set forth on the signature page hereto, and the Escrow Agent
will
disburse the funds from the Escrow Account to the Company and the Placement
Agents, by wire in federal (same day) funds,
4. as
provided in the escrow agreement between the Company and the Escrow Agent.
In
the event that (a) the Closing does not occur on or prior to December 21,
2006,
(b) the Company informs the Escrow Agent in writing that it has determined
that
the Closing is not likely to occur on or prior to December 21, 2006, (c)
the
Placement Agents have terminated the Placement Agency Agreement pursuant
to the
terms thereof or (d) the Placement Agents have determined that the
conditions to closing in the Placement Agency Agreement have not been satisfied,
such funds will be returned to the Investor.
The
Company’s obligation to issue and sell the Securities to the Investor shall be
subject to the following conditions, any one or more of which may be waived
by
the Company: (a) completion of the purchases and sales of Securities under
the Agreements that may be executed with the Other Investors; and (b) the
accuracy of the representations and warranties made by the Investors and
the
fulfillment of those undertakings of the Investors to be fulfilled prior
to the
Closing. If this Agreement is not executed and delivered by the Company
or the
Offering is terminated, this Agreement shall be of no further force and
effect.
The
Investor’s obligation to purchase the Securities shall be subject to the
condition that the Placement Agents shall not have (a) terminated the
Placement Agency Agreement pursuant to the terms thereof or (b) determined
that the conditions to closing in the Placement Agency Agreement have not
been
satisfied.
5. Representations,
Warranties and Covenants of the Company.
The
Company hereby represents and warrants to, and covenants with, the Investor,
as
follows:
5.1 The
Company has full corporate power and authority to (a) enter into the Placement
Agency Agreement and the Agreement and to consummate the transactions
contemplated hereby and thereby, including the sale of the Securities,
and (b)
authorize, execute, issue, and deliver the Securities as contemplated by
the
Placement Agency Agreement and the Agreement.
5.2 The
Placement Agency Agreement and the Agreement have been duly authorized,
executed
and delivered by the Company, and, assuming due authorization, execution
and
delivery by the Investor of the Agreement, constitute legal and binding
obligations of the Company, enforceable in accordance with their terms,
except
to the extent that rights to indemnity hereunder or under the Placement
Agency
Agreement may be limited by federal or state securities laws and except
as such
enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency,
reorganization or similar laws affecting the rights of creditors generally
and
subject to general principles of equity.
6. Representations,
Warranties and Covenants of the Investor.
The
Investor hereby represents and warrants to, and covenants with, the Company,
as
follows:
7. The
Investor, if outside the United States, will comply with all applicable
laws and
regulations in each foreign jurisdiction in which it purchases, offers,
sells or
delivers Securities or has in its possession or distributes any offering
material, in all cases at its own expense.
7.1 The
Investor has full power and authority to enter into this Agreement and
to
consummate the transactions contemplated hereby, including the purchase
of the
Securities as contemplated by this Agreement.
7.2 This
Agreement has been duly authorized, executed and delivered by the Investor,
and
constitutes a valid, legal and binding obligation of the Investor, enforceable
in accordance with its terms, except as such enforceability may be limited
by
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar
laws
affecting the rights of creditors generally and subject to general principles
of
equity.
7.3 The
Investor understands that nothing in the Prospectus, this Agreement or
any other
materials presented to the Investor in connection with the purchase and
sale of
the Securities constitutes legal, tax or investment advice. The Investor
has
consulted such legal, tax and investment advisors as it, in its sole discretion,
has deemed necessary or appropriate in connection with its purchase of
Securities.
7.4 The
making, execution and performance of this Agreement by the Investor and
the
consummation of the transactions contemplated herein will not conflict
with or
result in a breach or violation of any of the terms and provisions of,
or
constitute a default under, (i) the charter, bylaws or other organizational
documents of such Investor, as applicable, or (ii) any law, order, rule,
regulation, writ, injunction, judgment or decree of any court, administrative
agency, regulatory body, government or governmental agency or body, domestic
or
foreign, having jurisdiction over such Investor or its properties, except
for
any conflict, breach, violation or default which is not reasonably likely
to
have a material adverse effect on such Investor’s performance of its obligations
hereunder or the consummation of the transactions contemplated hereby.
7.5 The
Investor will maintain the confidentiality of all information acquired
as a
result of the transactions contemplated herein prior to the public disclosure
of
that information by the Company.
7.6 The
Investor will not, at any time, use any of the Securities acquired pursuant
to
this Agreement to cover any short position in the Common Stock if doing
so would
be in violation of applicable securities laws.
The
Investor (i) represents that on and from the date the Investor first became
aware of the offering of the Securities until the date hereof neither it
nor
anyone acting on its behalf has engaged in any hedging or other transaction
which was designed to or could reasonably be expected to lead to or result
in,
or be characterized as, a sale, an offer to sell, a solicitation of offers
to
buy, disposition of, loan, pledge or grant of any right with respect to
the
Common Stock of the Company by the Investor or any person or entity, in
each
case, in violation of applicable securities laws and (ii) covenants that
for
the
period
commencing on the date hereof
and ending on the earlier to occur of (A) the Company’s issuance of a press
release disclosing the transactions contemplated hereby and (B) the Company’s
filing of a Current Report on Form 8-K disclosing the transactions contemplated
hereby, neither it nor anyone acting on its behalf will, engage in any
hedging
or other transaction which is designed to or could reasonably be expected
to
lead to or result in, or be characterized as, a sale, an offer to sell,
a
solicitation of offers to buy, disposition of, loan, pledge or grant of
any
right with respect to the Common Stock of the Company by the Investor or
any
person or entity, in each case, in violation of applicable securities laws.
Such
prohibited hedging or other transaction would include without limitation
effecting any short sale or having in effect any short position (whether
or not
such sale or position is “against the box” and regardless of when such position
was entered into) or any purchase, sale or grant of any right (including
without
limitation any put or call option) with respect to the Common Stock of
the
Company or with respect to any security (other than a broad-based market
basket
or index) that includes, relates to or derives any significant part of
its value
from the Common Stock of the Company
8. Survival
of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement,
all
covenants, agreements, representations and warranties made by the Company
and
the Investor herein shall survive the execution of this Agreement, the
delivery
to the Investor of the Securities being purchased and the payment therefor.
9. Notices.
All
notices, requests, consents and other communications hereunder shall be
in
writing, shall be mailed (A) if within domestic United States by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, or by facsimile, or (B) if delivered from
outside the United States, by International Federal Express or facsimile,
and
shall be deemed given (i) if delivered by first-class registered or
certified mail domestic, three business days after so mailed, (ii) if
delivered by a nationally recognized overnight carrier, one business day
after
so mailed, (iii) if delivered by International Federal
10. Express,
two business days after so mailed, (iv) if delivered by facsimile, upon
electronic confirmation of receipt and shall be delivered as addressed
as
follows:
|
(a)
|
if
to the Company, to:
|
Neurogen
Corporation
▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
Telecopy
No.: (203) 488 - 4710
With
a
copy to:
|
Milbank,
Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
|
▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy
No.: (212) 822 - 5516
(b) if
to the
Investor, at its address on the signature page hereto, or at such other
address
or addresses as may have been furnished to the Company in writing.
11. Changes.
This
Agreement may not be modified or amended except pursuant to an instrument
in
writing signed by the Company and the Investor.
12. Headings.
The
headings of the various sections of this Agreement have been inserted for
convenience or reference only and shall not be deemed to be part of this
Agreement.
13. Severability.
In case
any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability
of the
remaining provisions contained herein shall not in any way be affected
or
impaired thereby.
14. GOVERNING
LAW.
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES
OF
CONFLICTS OF LAW.
15. TIME.
TIME
SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH
HEREIN,
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
16. Counterparts.
This
Agreement may be executed (including by facsimile) in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument, and shall become effective
when
one or more counterparts have been signed by each party hereto and delivered
to
the other parties.
17. Confidentiality.
Each
Investor acknowledges and agrees that any information or data it has acquired
from the Company, not otherwise properly in the public domain, was
18. received
in confidence. Except to the extent authorized by the Company and required
by
any federal or state law, the Investor agrees that it will refrain from
disclosing any such information to any person or entity other than to any
agents, attorneys, accountants, employees, officers and directors of the
Investor who need to know such information in connection with the Investor’s
purchase of the Securities and who agree to be bound by the confidentiality
provisions of this Agreement. In the event that the Investor or its agents,
attorneys, accountants, employees officers or directors are required by
law,
rule or regulation or any decision or order of any court or regulatory
authority
to release such information, it shall give the Company sufficient prior
notice
so that the Company may seek a stay or other release or waiver from disclosing
such information. Each Investor agrees not to use to the detriment of the
Company or for the benefit of any other person or entity, or misuse in
any way,
any confidential information of the Company.
ANNEX
II
EXCEPTIONS
TO NASD REPRESENTATIONS IN THE PURCHASE AGREEMENT
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
ANNEX
III
WIRE
INSTRUCTIONS
▇▇
▇▇▇▇▇▇
CHASE BANK
ABA#:
021
000
021
|
Account
Name:
|
AMERICAN
STOCK TRANSFER AND TRUST COMPANY AS ESCROW AGENT FOR NEUROGEN
CORPORATION
|
Account
#: 323-838685
IMPORTANT: Please
clearly indicate on the wire (1) the name of the originator (i.e., the
Investor)
and (2) the beneficiary, Neurogen Corporation.
INSTRUCTION
SHEET FOR INVESTOR
(to
be
read in conjunction with the Purchase Agreement)
In
order
to participate in the Offering:
|
1.
|
Complete
the Purchase Agreement, and have the Purchase Agreement executed
by an
individual authorized to bind the
Investor.
|
|
2.
|
Provide
the information regarding the investor requested on (i) the signature
page
to the Purchase Agreement and (ii) if applicable, Annex II
thereto.
|
|
3.
|
By
the CLOSE
OF BUSINESS
on
MONDAY, DECEMBER 18, 2006, return
VIA
FACSIMILE signed
copies of the completed Purchase Agreement
to:
|
Pacific
Growth Equities, LLC
Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇
Fascimile:
(▇▇▇) ▇▇▇-▇▇▇▇
Phone:
(▇▇▇) ▇▇▇-▇▇▇▇
|
4.
|
Please
also deliver the ORIGINALLY
SIGNED DOCUMENTS
to
Pacific Growth Equities, LLC at the address included BELOW
VIA OVERNIGHT DELIVERY:
|
Pacific
Growth Equities, LLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:
▇▇▇▇▇▇ ▇▇▇▇▇▇
A
copy of
the Purchase Agreement signed by the Company will be delivered to the Investor
at a later date.
|
5.
|
By
12
NOON NEW
YORK CITY TIME on
WEDNESDAY, DECEMBER 20, 2006, the
Investor shall wire the purchase price for the Shares it is purchasing
to
the trust account of American Stock Transfer & Trust Company, as
Escrow Agent, pursuant to the Wire Instructions included as Annex
III to
the Purchase Agreement.
|
EXHIBIT
C-1
FORM
OF OPINION OF MILBANK,
TWEED, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
COUNSEL
TO THE COMPANY
EXHIBIT
C-2
FORM
OF OPINION OF ▇▇▇▇▇▇▇
▇▇▇▇, ESQ.
CHIEF
CORPORATE COUNSEL TO THE COMPANY
EXHIBIT
D
FORM
OF LOCK-UP AGREEMENT
EXHIBIT
E
PRICING
INFORMATION ANNEX
|
Terms
and Conditions of Common Stock Offering
|
|
|
Number
of shares
|
6,993,000
shares
|
|
Public
offering price per share:
|
$5.72
|
|
Net
Proceeds to Neurogen Corporation (after fees paid to the Placement
Agents,
but before expenses):
|
$37,524,962.40
|
|
Use
of proceeds:
|
Clinical
and preclinical development of existing product candidates,
discovery of
additional product candidates, capital expenditures and other
general
corporate purposes.
|
|
Additional
risk factor included below:
|
|
Limitation
on the Use of Net Operating Loss Carryforwards (“NOLs”) and Tax
Credits
As
previously disclosed, the Company’s ability to utilize its NOLs and tax credits
may be limited if it undergoes or has undergone an ownership change,
as defined
in section 382 of the Internal Revenue Code, as a result of changes in
the
ownership of outstanding stock. An ownership change generally occurs
if the
percentage of stock owned by one or more stockholders who own, directly
or
indirectly, 5% or more of the value of the Company’s outstanding stock (or are
otherwise treated as 5% stockholders under section 382 and the regulations
promulgated thereunder) has increased by more than 50 percentage points
over the
lowest percentage of the Company’s outstanding stock owned by these stockholders
at any time during the testing period, which is generally the three-year
period
preceding the potential ownership change. In the event of an ownership
change,
section 382 imposes an annual limitation on the amount of post-ownership
change
taxable income a corporation may offset with pre-ownership change NOLs.
In
2006,
the Company reviewed its changes in ownership through a testing date
of December
31, 2005, and determined that an ownership change occurred in 2005. The
Company
is currently reviewing the impact of the change of ownership on the utilization
of its NOLs and tax credits but has not completed its analysis. However,
the
change of ownership could have the effect of reducing the amount of NOLs
and tax
credits existing at the date of the ownership change that the Company
may
utilize to offset taxable income in the taxable years following the ownership
change.