12,874,547 Shares Warrants to Purchase 2,574,911 Shares Genelabs Technologies, Inc. Common Stock (No Par Value) PLACEMENT AGENCY AGREEMENT
Exhibit
99.1
EXECUTION
COPY
12,874,547
Shares
Warrants
to Purchase 2,574,911 Shares
Genelabs
Technologies, Inc.
Common
Stock
(No
Par
Value)
September
26, 2007
Deutsche
Bank Securities Inc.
▇▇
▇▇▇▇
▇▇▇▇▇▇, 4th
Floor
New
York,
New York 10005
Ladies
and Gentlemen:
Genelabs
Technologies, Inc., a California corporation (the “Company”), proposes, subject
to the terms and conditions stated in this Placement Agency Agreement (this
“Agreement”) and the Subscription Agreements in the form of Exhibit
A
attached
hereto (the “Subscription Agreements”) entered into with the investors
identified therein (each, an “Investor” and collectively, the “Investors”),
to
issue
and sell
up to an
aggregate of 12,874,547 shares (the “Shares”) of the Company’s common stock, no
par value per share (the “Common Stock”) and warrants to purchase up to
2,574,911 shares of Common Stock (the “Warrants” and, together with the Shares,
the “Securities”) in the form attached hereto as Exhibit
B.
The
shares of Common Stock issuable upon exercise of the Warrants are hereinafter
referred to as the “Warrant Shares.” The Company hereby confirms its agreement
with Deutsche Bank Securities Inc. (the “Placement Agent”), as set forth below.
The Securities are more fully described in the Registration Statement (as
defined herein).
AGREEMENT
TO ACT AS PLACEMENT AGENT; DELIVERY AND PAYMENT.
On
the
basis of the representations, warranties and agreements of the Company herein
contained, and subject to the terms and conditions set forth in this
Agreement:
The
Company hereby authorizes the Placement Agent to act as its exclusive agent
in
connection with the issuance and sale, by the Company, of Securities (the
“Offering”) to the Investors and the Placement Agent hereby agrees, as agent of
the Company, to use its commercially reasonable efforts to solicit offers to
purchase all or part of the Securities from the Company upon the terms and
conditions set forth in the Prospectus (as defined below). The Placement Agent
shall make commercially reasonable efforts to assist the Company in obtaining
performance by each Investor whose offer to purchase Securities has been
solicited by the Placement Agent and accepted by the Company, but the Placement
Agent shall not, except as otherwise provided in this Agreement, have any
liability to the Company in the event any such purchase is not consummated
for
any reason. Under no circumstances will the Placement Agent or any of its
affiliates be obligated to underwrite or purchase any of the Securities for
its
own account or otherwise provide any financing. The Placement Agent shall act
solely as the Company’s agent and not as principal. The Placement Agent shall
have no authority to bind the Company with respect to any prospective offer
to
purchase Securities and the Company shall have the sole right to accept offers
to purchase Securities and may reject any such offer, in whole or in part.
As
compensation for services rendered, on the Closing Date, the Company shall
pay
or cause to be paid to the Placement Agent by wire transfer of immediately
available funds to an account or accounts designated by the Placement Agent
an
aggregate amount equal to eight percent (8.0%) of the gross proceeds received
by
the Company from its sale of the Securities on such Closing Date, without taking
into account any proceeds from the exercise of the warrants (the “Agency
Fee”).
The
purchases of Securities by the Investors shall be evidenced by the execution
of
the Subscription Agreements by each of the parties thereto in the form attached
hereto as Exhibit
A.
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 written consent of the
Placement Agent, solicit or accept offers to purchase Securities of the Company
(other than pursuant to the exercise of options or warrants to purchase shares
of Common Stock that are outstanding at the date hereof) otherwise than through
the Placement Agent in accordance herewith.
No
Securities which the Company has agreed to sell pursuant to this Agreement
shall
be deemed to have been purchased and paid for, or sold by the Company, until
such Securities shall have been delivered to the Investor purchasing such
Securities against payment by such Investor. If the Company shall default
in its obligations to deliver Securities to an Investor whose offer it has
accepted, the Company shall indemnify and hold the Placement Agent harmless
against any loss, claim, damage or liability directly or indirectly arising
from
or as a result of such default by the Company.
Payment
of the purchase price for, and delivery of, the Securities shall be made at
a
closing (the “Closing”) at the offices of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ &
▇▇▇▇ LLP, counsel for the Company, located at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇,
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, at 10:00 a.m., local time, on October 1, 2007 or at
such
other time and date as the Placement Agent and the Company determine pursuant
to
Rule 15c6-1(a) under the Exchange Act (such date of payment and delivery being
herein referred to as the “Closing Date”). The Company, the Placement Agent and
JPMorganChase Bank, as escrow agent (the “Escrow Agent”), have entered into an
escrow agreement, dated as of the date hereof (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”). Subject to
the terms hereof and of the Escrow Agreement,
payment
of the purchase price for the Securities shall be made to the Company in the
manner set forth below by Federal Funds wire transfer, against delivery of
the
Securities to such persons and
shall
be registered in the name or names and shall be in such denominations as the
Placement Agent may request at least one business day before the Closing Date.
Payment of the purchase price for the Securities to be purchased by Investors
shall be made by such Investors directly to the Escrow Agent and the Escrow
Agent agrees to hold such purchase price in escrow in accordance with the terms
of the Escrow Agreement. Subject to the terms and conditions hereof and of
the
Subscription Agreements and the Escrow Agreement, the Escrow Agent shall, on
the
Closing Date, deliver to the Company, by Federal Funds wire transfer, the
aggregate purchase price so held by such person in escrow, reduced by an amount
equal to the sum of the aggregate Agency Fee payable to the Placement Agent.
Thereafter, the Escrow Agent’s obligations with respect to the escrow of the
purchase price so held by it shall cease. Each of the Company and the Placement
Agent hereby agree to deliver to the Escrow Agent a Closing Notice in the form
attached as Exhibit C
to the
Escrow Agreement at least one day prior to the Closing Date.
2
Any
Investor not settling its purchase of Securities pursuant to Section 1(f) above
shall deposit its respective Purchase Amount into an account or accounts
established with the Placement Agent. On the Closing Date, the Placement Agent
shall, with respect to each such Investor, cause the Purchase Amount for such
Securities to be wired from such accounts to an account designated by the
Company in exchange for the release of such Investor’s Securities.
2. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY.
The
Company represents and warrants to the Placement Agent as follows:
(a) A
“shelf”
registration statement on Form S-3 (File No. 333-145497)
with
respect to the Securities has been prepared by the Company in conformity with
the requirements of the Securities Act of 1933, as amended (the “Act”), and the
rules and regulations (the “Rules and Regulations”) of the Securities and
Exchange Commission (the “Commission”) thereunder and has been filed with the
Commission and has become effective. The Company and the transactions
contemplated by this Agreement meet the requirements and comply with the
conditions for the use of Form S-3. The Registration Statement meets the
requirements of Rule 415(a)(1)(x) under the Act and complies in all material
respects with said rule. Copies of such registration statement, including any
amendments thereto, the base prospectus (meeting the requirements of the Rules
and Regulations) contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been delivered by
the
Company to the Placement Agent. Such registration statement, together with
any
registration statement filed by the Company pursuant to Rule 462(b) under the
Act, is herein referred to as the “Registration Statement,” which shall be
deemed to include all information omitted therefrom in reliance upon Rules
430B
or 430C under the Act and contained in the Prospectus referred to below. No
post-effective amendment to the Registration Statement has been filed as of
the
date of this Agreement. The term “Prospectus” as used in this Agreement means
the form of base prospectus together with the final prospectus supplement first
filed with the Commission pursuant to and within the time limits described
in
Rule 424(b) under the Act. Any preliminary prospectus relating to the Securities
prior of the date hereof is referred to as a “Preliminary Prospectus.” Any
reference herein to the Registration Statement, any Preliminary Prospectus
or
the Prospectus or to any amendment or supplement to any of the foregoing
documents shall be deemed to refer to and include any documents incorporated
by
reference therein, and, in the case of any reference herein to the Prospectus,
also shall be deemed to include any documents incorporated by reference therein,
and any supplements or amendments thereto, filed with the Commission after
the
date of filing of the Prospectus Supplement under Rule 424(b) under the Act,
and
prior to the termination of the offering of the Securities by the Placement
Agent.
(b)
As
of the
Applicable Time (as defined below) and as of the Closing Date, neither (i)
the
General Use Free Writing Prospectus(es) (as defined below) issued at or prior
to
the Applicable Time, the Statutory Prospectus (as defined below) and the
information included on Exhibit
E
hereto,
all considered together (collectively, the “General Disclosure Package”), nor
(ii) any individual Limited Use Free Writing Prospectus (as defined below),
when
considered together with the General Disclosure Package, included or will
include any untrue statement of a material fact or omitted or will omit to
state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however,
that
the Company makes no representations or warranties as to information contained
in or omitted from the General Disclosure Package or any Issuer Free Writing
Prospectus, in reliance upon, and in conformity with, written information
furnished to the Company by the Placement Agent, specifically for use therein,
it being understood and agreed that the only such information is that described
in Section 11 herein. As used in this subsection and elsewhere in this
Agreement:
3
“Applicable
Time” means 8:00 a.m. (New York City time) on the date of this Agreement or such
other time as agreed to by the Company and the Placement Agent.
“Statutory
Prospectus” as of any time means the Preliminary Prospectus relating to the
Securities that is included in the Registration Statement immediately prior
to
that time.
“Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 under the Act, relating to the Securities 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)
under the Act.
“General
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
identified on Schedule
I
to this
Agreement.
“Limited
Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is
not a General Use Free Writing Prospectus.
(c) The
Company has been duly organized and is validly existing as a corporation in
good
standing under the laws of the State of California, with full corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement, the General Disclosure Package and
the
Prospectus. The Company has no significant subsidiaries (as such term is defined
in Rule 1-02 of Regulation S-X promulgated by the Commission) other than as
listed on Schedule
II
hereto
(collectively, the “Subsidiaries”). Each of the Subsidiaries has been duly
organized and is validly existing as an entity in good standing under the laws
of the jurisdiction of its organization, with corporate power and authority
to
own or lease its properties and conduct its business as described in the
Registration Statement, the General Disclosure Package and the Prospectus.
The
Subsidiaries are the only subsidiaries, direct or indirect, of the Company.
The
Company and each of the Subsidiaries are duly qualified to transact business
in
all jurisdictions in which the conduct of their business requires such
qualification, except where the failure to be so qualified could not reasonably
be expected to (i) result in any material adverse change, or any development
involving a prospective material adverse change, in or affecting the earnings,
business, management, properties, prospects, assets, rights, operations, or
condition (financial or otherwise) of the Company and of the Subsidiaries taken
as a whole, or (ii) prevent, burden or impair the consummation of the
transactions contemplated by this Agreement (collectively a “Material Adverse
Effect”). The outstanding shares of capital stock of each of the Subsidiaries
have been duly authorized and validly issued, are fully paid and non-assessable
and are owned by the Company or another Subsidiary free and clear of all liens,
encumbrances and equities and claims; and no options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights to convert
any obligations into shares of capital stock or ownership interests in the
Subsidiaries are outstanding.
(d)
The
outstanding shares of Common Stock of the Company have been duly authorized
and
validly issued and are fully paid and non-assessable, have been issued in
compliance with all federal and state securities laws, were not issued in
violation of or subject to any preemptive rights or other rights to subscribe
for or purchase or acquire any securities of the Company that have not been
waived in writing. The Shares to be issued and sold by the Company have been
duly authorized and when issued and paid for as contemplated herein and in
the
Subscription Agreements, will be validly issued, fully paid and non-assessable;
and no preemptive rights of stockholders exist with respect to any of the Shares
or the issue and sale thereof. The Warrants conform,
or when issued will conform, to the description thereof contained in the General
Disclosure Package and the Prospectus and have
been
duly authorized and when issued and paid for as contemplated herein and in
the
Subscription Agreements, will
be
valid and binding obligations of the Company, enforceable in accordance with
their terms, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the rights
and
remedies of creditors generally or subject to general principles of equity.
The
Warrant Shares initially issuable upon exercise of the Warrants conform, or
when
issued will conform, to the description thereof contained in the General
Disclosure Package and the Prospectus and have been duly authorized and reserved
for issuance and when issued in accordance with the terms thereof will be
validly issued, fully paid and nonassessable. Neither
the filing of the Registration Statement nor the offering or sale of the
Securities as contemplated by this Agreement gives rise to any rights, other
than those which have been waived or satisfied, for or relating to the
registration of any shares of Common Stock.
4
(e)
The
information set forth under the caption “Description of the Common Stock and
Preferred Stock We May Offer” in the Registration Statement and the Prospectus
(and any similar section or information contained in the General Disclosure
Package) is true and correct. All of the Securities conform to the description
thereof contained in the Registration Statement, the General Disclosure Package
and the Prospectus. The form of certificates for the Securities conforms to
the
corporate law of the jurisdiction of the Company’s incorporation.
(f)
The
Commission has not issued an order preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the Prospectus
relating to the proposed offering of the Securities, and no proceeding for
that
purpose or pursuant to Section 8A of the Act has been instituted or, to the
Company’s knowledge, threatened by the Commission. The Registration Statement,
as of its effective date, contained and as of the date hereof, contains, and
the
Prospectus, as of its date, contained and any amendments or supplements thereto
will contain, all statements which are required to be stated therein by, and
will conform to, the requirements of the Act and the Rules and Regulations.
The
documents incorporated, or to be incorporated, by reference in the Prospectus,
at the time filed with the Commission conformed or will conform, in all respects
to the requirements of the Securities Exchange Act of 1934 (“Exchange Act”) or
the Act, as applicable, and the rules and regulations of the Commission
thereunder. The Registration Statement and any amendments thereto, as of its
effective date, the date hereof and the Closing Date, did not contain, do not
contain, and will not contain, any untrue statement of a material fact and
did
not omit, do not omit, and will not omit, to state a material fact required
to
be stated therein or necessary to make the statements therein not misleading.
The Prospectus and any amendments and supplements thereto, as of its date,
the
date hereof and the Closing Date, did not contain, do not contain, and will
not
contain, any untrue statement of a material fact; and did not omit, do not
omit,
and will not omit, to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided,
however,
that
the Company makes no representations or warranties as to information contained
in or omitted from the Registration Statement or the Prospectus, or any such
amendment or supplement, in reliance upon, and in conformity with, written
information furnished to the Company by the Placement Agent, specifically for
use therein, it being understood and agreed that the only such information
is
that described in Section 11 herein.
(g)
Each
Issuer Free Writing Prospectus, as of its issue date and at all subsequent
times
through the completion of the public offer and sale of the Securities or until
any earlier date that the Company notified or notifies the Placement Agent
as
described in the next sentence, did not, does not and will not include any
information that conflicted, conflicts or will conflict with the information
contained in the Registration Statement, any Statutory Prospectus or the
Prospectus, including any document incorporated by reference therein that has
not been superseded or modified. If
at any
time following issuance of an Issuer Free Writing Prospectus, there occurred
or
occurs an event or development as a result of which such Issuer Free Writing
Prospectus 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 light of the circumstances, not misleading, the Company
has notified or will notify promptly the Placement Agent so that any use of
such
Issuer Free Writing Prospectus may cease until it is amended or supplemented.
The foregoing two sentences do not apply to statements or omissions from any
Issuer Free Writing Prospectus based upon and in conformity with written
information furnished to the Company by the Placement Agent specifically for
use
therein.
5
(h)
The
Company has not, directly or indirectly, distributed and will not distribute
any
offering material in connection with the offering and sale of the Securities
other than any Preliminary Prospectus, the Prospectus, any Permitted Free
Writing Prospectus (defined below) and other materials, if any, permitted under
the Act and consistent with Section 3(b)(ii) below. The Company will file with
the Commission all Issuer Free Writing Prospectuses in the time required under
Rule 433(d) under the Act. The Company has satisfied or will satisfy the
conditions in Rule 433 under the Act to avoid a requirement to file with the
Commission any electronic road show.
(i) (i)
At
the time of filing the Registration Statement and (ii) as of the date hereof
(with such date being used as the determination date for purposes of this clause
(ii)), the Company was not and is not an “ineligible issuer” (as defined in Rule
405 under the Act, without taking into account any determination by the
Commission pursuant to Rule 405 under the Act that it is not necessary that
the
Company be considered an ineligible issuer), including, without limitation,
for
purposes of Rules 164 and 433 under the Act with respect to the offering of
the
Securities as contemplated by the Registration Statement.
(j)
The
consolidated financial statements of the Company and the Subsidiaries, together
with related notes and schedules as set forth or incorporated by reference
in
the Registration Statement, the General Disclosure Package and the Prospectus,
present fairly the financial position and the results of operations and cash
flows of the Company and the consolidated Subsidiaries, at the indicated dates
and for the indicated periods. Such financial statements and related schedules
have been prepared in accordance with generally accepted principles of
accounting (“GAAP”), consistently applied throughout the periods involved,
except as disclosed therein, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary and
selected consolidated financial and statistical data included or incorporated
by
reference in the Registration Statement, the General Disclosure Package and
the
Prospectus presents fairly the information shown therein and such data has
been
compiled on a basis consistent with the financial statements presented therein
and the books and records of the Company. All disclosures contained in the
Registration Statement, the General Disclosure Package and the Prospectus
regarding “non-GAAP financial measures” (as such term is defined by the Rules
and Regulations) comply with Regulation G of the Exchange Act and Item 10 of
Regulation S-K under the Act, to the extent applicable. The Company and the
Subsidiaries do not have any material liabilities or obligations, direct or
contingent (including any off-balance sheet obligations or any “variable
interest entities” within the meaning of Financial Accounting Standards Board
Interpretation No. 46), not disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus. There are no financial statements
(historical or pro forma) that are required to be included in the Registration
Statement, the General Disclosure Package or the Prospectus that are not
included as required.
(k)
Ernst
& Young LLP, who have certified certain of the financial statements filed
with the Commission as part of, or incorporated by reference in, the
Registration Statement, the General Disclosure Package and the Prospectus,
is an
independent registered public accounting firm with respect to the Company and
the Subsidiaries within the meaning of the Act and the applicable Rules and
Regulations and the
Public Company Accounting Oversight Board (United States) (the
“PCAOB”).
6
(l)
Except
as
disclosed in the
Registration Statement, the General Disclosure Package and the
Prospectus,
neither
the Company nor any of the Subsidiaries is aware of (i) any material weakness
in
its internal control over financial reporting or (ii) change in internal control
over financial reporting that has materially affected, or is reasonably likely
to materially affect, the Company’s internal control over financial
reporting.
(m)
Solely
to
the extent that the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended, and the rules and
regulations promulgated by the Commission and the Nasdaq Capital Market
thereunder (the “▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act”) has been applicable to the Company, there
is and has been no failure on the part of the Company to comply in all material
respects with any provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company has taken
all
necessary actions to ensure that it is in compliance with all provisions of
the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act that are in effect and with which the Company is required
to
comply and is actively taking steps to ensure that it will be in compliance
with
other provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act not currently in effect or which
will
become applicable to the Company.
(n)
There
is
no action, suit, claim or proceeding pending or, to the knowledge of the
Company, threatened against the Company or any of the Subsidiaries before any
court or administrative agency or otherwise which if determined adversely to
the
Company or any of the Subsidiaries would have, individually or in the aggregate,
a Material Adverse Effect, except as set forth in the Registration Statement,
the General Disclosure Package and the Prospectus.
(o)
The
Company and the Subsidiaries have good and marketable title to all of the
properties and assets reflected in the consolidated financial statements
hereinabove described or described in the Registration Statement, the General
Disclosure Package and the Prospectus, subject to no lien, mortgage, pledge,
charge or encumbrance of any kind except those reflected in such financial
statements or described in the Registration Statement, the General Disclosure
Package and the Prospectus or which are not material in amount or would not
materially interfere with the use to be made of such properties or assets.
The
Company and the Subsidiaries occupy their leased properties under valid and
binding leases conforming in all material respects to the description thereof
set forth in the Registration Statement, the General Disclosure Package and
the
Prospectus.
(p)
Except
as
would not have a Material Adverse Effect, the Company and the Subsidiaries
have
filed all Federal, State, local and foreign tax returns which have been required
to be filed and have paid all taxes indicated by such returns and all
assessments received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith and for which an adequate
reserve for accrual has been established in accordance with GAAP. All tax
liabilities have been adequately provided for in all material respects in the
financial statements of the Company, and the Company does not know of any actual
or proposed additional material tax assessments.
(q)
Since
the
respective dates as of which information is given in the Registration Statement,
the General Disclosure Package and the Prospectus, as each may be amended or
supplemented, there has not been any material adverse change or any development
involving a prospective material adverse change in or affecting the earnings,
business, management, properties, assets, rights, operations, condition
(financial or otherwise), or prospects of the Company and the Subsidiaries
taken
as a whole, whether or not occurring in the ordinary course of business, and
there has not been any material transaction entered into or any material
transaction that is probable of being entered into by the Company or the
Subsidiaries, other than transactions in the ordinary course of business and
changes and transactions described in the Registration Statement, the General
Disclosure Package and the Prospectus, as each may be amended or supplemented.
The Company and the Subsidiaries have no material contingent obligations which
are not disclosed in the Company’s financial statements which are included in
the Registration Statement, the General Disclosure Package and the
Prospectus.
7
(r)
Neither
the Company nor any of the Subsidiaries is or with the giving of notice or
lapse
of time or both, will be, (i) in violation of its certificate or articles of
incorporation, by-laws, certificate of formation, limited liability agreement,
partnership agreement or other organizational documents, (ii) in violation
of or
in default under any agreement, lease, contract, indenture or other instrument
or obligation to which it is a party or by which it, or any of its properties,
is bound, or (iii) in violation in
the
performance or observance of any statute, law, rule, regulation, ordinance,
judgment, order or decree of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over the
Company or any of its properties, as applicable (including, without limitation,
those administered by the Food and Drug Administration of the U.S. Department
of
Health and Human Services (the “FDA”)
or by
any foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA), except, with
respect to clauses (ii) and (iii) above and with respect to any of the Company's
Subsidiaries, also clause (i) above, to the extent any such contravention has
been waived or would not result in a Material Adverse Effect.
The
execution and delivery of this Agreement, each Subscription Agreement and the
Escrow Agreement and the consummation of the transactions herein contemplated
and the fulfillment of the terms hereof will not conflict with or result in
a
breach or violation of any of the terms or provisions of, or constitute a
default under, (i) any indenture, mortgage, deed of trust or other agreement
or
instrument to which the Company or any Subsidiary is a party or by which the
Company or any Subsidiary or any of their respective properties is bound except
as would not have a Material Adverse Effect, (ii) the certificate or articles
of
incorporation or by-laws of the Company or (iii) any law, order, rule or
regulation judgment, order, writ or decree applicable to the Company or any
Subsidiary of any court or of any government, regulatory body or administrative
agency or other governmental body having jurisdiction.
(s)
There
is
no document, contract or other agreement required to be described in the
Registration Statement, the General Disclosure Package or the Prospectus or
to
be filed as an exhibit to the Registration Statement which is not described
or
filed as required by the Act or the Rules and Regulations. Each description
of a
contract, document or other agreement in the Registration Statement and the
Prospectus accurately reflects in all material respects the terms of the
underlying contract, document or other agreement. Each contract, document or
other agreement described in the Registration Statement, the General Disclosure
Package and the Prospectus or listed in the exhibits to the Registration
Statement or incorporated by reference is in full force and effect and is valid
and enforceable by and against the Company in accordance with its terms (except
as rights to indemnity and contribution thereunder may be limited by federal
or
state securities laws and matter of public policy and except as the
enforceability thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principle). Neither the Company nor any
of
its Subsidiaries nor, to the Company’s knowledge, any other party is in default
in the observance or performance of any term or obligation to be performed
by it
under any such agreement or any other agreement or instrument to which the
Company or its Subsidiaries is a party or by which the Company or its
Subsidiaries or their respective properties or businesses may be bound, and
no
event has occurred which with notice or lapse of time or both would constitute
such a default, in any such case in which the default or event, individually
or
in the aggregate, would have a Material Adverse Effect.
(t) The
Company has the full right, power and authority to enter into this Agreement,
each of the Subscription Agreements and the Escrow Agreement, and to perform
and
discharge its obligations hereunder and thereunder; and each of this Agreement,
the Escrow Agreement and each Subscription Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid, legal and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as rights to indemnity hereunder may be limited by federal
or
state securities laws and except as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or similar laws affecting
the
rights of creditors generally and subject to general principles of
equity.
8
(u)
Each
approval, consent, order, authorization, designation, declaration or filing
by
or with any regulatory, administrative or other governmental body necessary
in
connection with the execution and delivery by the Company of this Agreement,
the
Subscription Agreements and the Escrow Agreement, and the consummation of the
transactions herein contemplated (except such additional steps as may be
required by (i) the Commission, (ii) any necessary qualification of the
Securities under the securities or blue sky laws of the various jurisdictions
in
which the Securities are being offered by the Placement Agent and (iii) the
Financial
Industry Regulatory Authority (“FINRA”))
has
been obtained or made and is in full force and effect.
(v)
Except
as
described in the Registration Statement or in any document incorporated by
reference therein, the Company and each of the Subsidiaries hold all material
licenses, certificates and permits from governmental authorities which are
necessary to the conduct of their businesses in the manner in which they are
being conducted; the Company and the Subsidiaries each own or possess the right
to use all patents, patent rights, trademarks, trade names, service marks,
service names, copyrights, license rights, know-how (including trade secrets
and
other unpatented and unpatentable proprietary or confidential information,
systems or procedures) and other intellectual property rights (“Intellectual
Property”) necessary to carry on their business in all material respects in the
manner in which it is being conducted; to the Company’s knowledge, neither the
Company nor any of the Subsidiaries has infringed, and none of the Company
or
the Subsidiaries have received notice of conflict with, any Intellectual
Property of any other person or entity. The Company has taken all steps
reasonably necessary to secure ownership interests in Intellectual Property
created for it by any contractors. There are no outstanding options, licenses
or
agreements of any kind relating to the Intellectual Property of the Company
that
are required to be described in the Registration Statement, the General
Disclosure Package and the Prospectus and are not described therein in all
material respects. The Company is not a party to or bound by any options,
licenses or agreements with respect to the Intellectual Property of any other
person or entity that are required to be set forth in the Prospectus and are
not
described therein in all material respects. To the Company's knowledge, none
of
the technology employed by the Company has been obtained or is being used by
the
Company in violation of any contractual obligation binding on the Company or
any
of its officers, directors or employees or otherwise in violation of the rights
of any persons. Except as disclosed in the Registration Statement, the General
Disclosure Package and the Prospectus, the Company has not received any written
communications alleging that the Company has violated, infringed upon or
conflicted with any of the Intellectual Property of any other person or entity.
The Company knows of no infringement by others of Intellectual Property owned
by
or licensed to the Company.
(w)
Since
the
respective dates as of which information is set forth in the Registration
Statement, the General Disclosure Package and the Prospectus, (i) all of the
descriptions of the Company’s legal and governmental proceedings and procedures
before the FDA or any other national, departmental, state or local governmental
body exercising comparable authority are true and correct in all material
respects, (ii) the studies, tests and preclinical and clinical trials conducted
by or on behalf of the Company and its Subsidiaries that are described in the
Registration Statement, the General Disclosure Package and the Prospectus were
and, if still pending, are (a) with respect to the foregoing conducted by
employees of the Company or any of its Subsidiaries (“Company Studies”), being
conducted in accordance with experimental protocols, procedures and controls
pursuant to, where applicable, accepted professional scientific standards,
in
each case in all necessary respects and in all material respects; and (b) with
respect to the foregoing conducted on behalf of the Company or independently
by
others using the Company’s or any of its Subsidiaries’ technologies, products or
product candidates (“Independent Studies”), to the Company’s knowledge, after
due inquiry, being conducted in accordance with experimental protocols,
procedures and controls pursuant to, where applicable, accepted professional
scientific standards, in each case in all necessary respects and in all material
respects; (iii) the descriptions of the results of the Company Studies, and,
to
the Company’s knowledge, after due inquiry, the Independent Studies, contained
in the Registration Statement, the General Disclosure Package and the Prospectus
are true and correct in all material respects; and (iv) except as disclosed
in
the Registration Statement, the General Disclosure Package and the Prospectus,
neither the Company nor its Subsidiaries have received any notices or
correspondence from the FDA, or any national, state or local governmental body
exercising comparable authority requiring the termination, suspension or
material modification of any of the Company Studies or Independent
Studies.
9
(x) Neither
the Company, nor to the Company’s knowledge, any of its affiliates, has taken or
may take, directly or indirectly, any action designed to cause or result in,
or
which has constituted or which might reasonably be expected to constitute,
the
stabilization or manipulation of the price of the shares of Common Stock to
facilitate the sale or resale of the Securities. The Company acknowledges that
the Placement Agent may engage in passive market making transactions in the
Securities on the Nasdaq Capital Market in accordance with Regulation M under
the Exchange Act.
(y)
Neither
the Company nor any Subsidiary is or, after giving effect to the offering and
sale of the Securities contemplated hereunder and the application of the net
proceeds from such sale as described in the Prospectus, will be an “investment
company” within the meaning of such term under the Investment Company Act of
1940 as amended (the “1940 Act”), and the rules and regulations of the
Commission thereunder.
(z)
The
Company and each of the Subsidiaries maintains a system of internal accounting
controls sufficient to provide reasonable assurances that (i) transactions
are
executed in accordance with management’s general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets
is
compared with existing assets at reasonable intervals and appropriate action
is
taken with respect to any differences.
(aa)
The
Company has established and maintains “disclosure controls and procedures” (as
defined in Rules 13a-14(c) and 15d-14(c) under the Exchange Act); the Company’s
“disclosure controls and procedures” are reasonably designed to ensure that all
information (both financial and non-financial) required to be disclosed by
the
Company in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the rules and regulations of the Exchange Act, and that all such information
is accumulated and communicated to the Company’s management as appropriate to
allow untimely decisions regarding required disclosure and to make the
certifications of the Chief Executive Officer and Chief Financial Officer of
the
Company required under the Exchange Act with respect to such
reports.
(bb)
The
statistical, industry-related and market-related data included in the
Registration Statement, the General Disclosure Package and the Prospectus are
based on or derived from sources which the Company reasonably and in good faith
believes are reliable and accurate, and such data agree with the sources from
which they are derived.
(cc)
The
operations of the Company and its subsidiaries are and have been conducted
at
all times in compliance with applicable financial record-keeping and reporting
requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as
amended, applicable money laundering statutes and applicable rules and
regulations thereunder (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 or its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
Company’s knowledge, threatened.
10
(dd)
Neither
the Company nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department (“OFAC”); and the Company will not directly or indirectly use the
proceeds of the offering, or lend, contribute or otherwise make available such
proceeds to any subsidiary, joint venture partner or other person or entity,
for
the purpose of financing the activities of any person currently subject to
any
U.S. sanctions administered by OFAC.
(ee)
The
Company and each of the Subsidiaries carry, or are covered by, insurance in
such
amounts and covering such risks as is adequate for the conduct of their
respective businesses and the value of their respective properties and as is
customary for companies engaged in similar businesses.
(ff)
The
Company and each Subsidiary is in compliance in all material respects with
all
presently applicable provisions of the Employee Retirement Income Security
Act
of 1974, as amended, including the regulations and published interpretations
thereunder (“ERISA”); no “reportable event” (as defined in ERISA) has occurred
with respect to any “pension plan” (as defined in ERISA) for which the Company
and each Subsidiary would have any liability; the Company and each Subsidiary
has not incurred and does not expect to incur liability under (i) Title IV
of
ERISA with respect to termination of, or withdrawal from, any “pension plan” or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the “Code”);
and each “pension plan” for which the Company or any Subsidiary would have any
liability that is intended to be qualified under Section 401(a) of the Code
is
so qualified in all material respects and nothing has occurred, whether by
action or by failure to act, which would cause the loss of such
qualification.
(gg)
To
the
Company’s knowledge, there are no affiliations or associations between any
member of FINRA and any of the Company’s officers, directors or 5% or greater
securityholders, except as set forth in the Registration Statement.
(hh)
Neither
the Company nor any of the Subsidiaries is in violation of any statute, rule,
regulation, decision or order of any governmental agency or body or any court,
domestic or foreign, relating to the use, disposal or release of hazardous
or
toxic substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively, “environmental
laws”), owns or operates any real property contaminated with any substance that
is subject to environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any claim
relating to any environmental laws, which violation, contamination, liability
or
claim would, individually or in the aggregate, have a Material Adverse Effect;
and the Company is not aware of any pending investigation which might lead
to
such a claim.
(ii)
The
Securities have been approved for listing subject to notice of issuance on
the
Nasdaq Capital Market.
(jj) The
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of the Common Stock under the Exchange Act or
the
quotation of the Common Stock on the Nasdaq Capital Market, nor, has the Company
received any notification that the Commission or the Nasdaq Capital Market
is
contemplating terminating such registration or quotation other than as disclosed
in the Registration Statement.
11
(kk)
There
are
no relationships or related-party transactions involving the Company or any
of
the Subsidiaries or any other person required to be described in the Prospectus
which have not been described as required.
(ll)
Neither
the Company nor any of the Subsidiaries has made any contribution or other
payment to any official of, or candidate for, any federal, state or foreign
office in violation of any law which violation is required to be disclosed
in
the Prospectus.
(mm) The
Company has not sold or issued any securities that would be integrated with
the
offering of the Securities contemplated by this Agreement pursuant to the Act,
the Rules and Regulations or the interpretations thereof by the
Commission.
(nn) Except
for this Agreement, neither the Company nor any of its Subsidiaries is a party
to any contract, agreement or understanding with any person that would give
rise
to a valid claim against the Company or the Placement Agent for a brokerage
commission, finder’s fee or like payment in connection with the offering and
sale of the Securities.
3. COVENANTS
OF THE COMPANY.
The
Company covenants and agrees with the Placement Agent that:
(a)
The
Company will (i) prepare and timely file with the Commission under Rule 424(b)
under the Act a Prospectus in a form approved by the Placement Agent containing
information previously omitted at the time of effectiveness of the Registration
Statement in reliance on Rules 430B or 430C under the Act, (ii) not file any
amendment to the Registration Statement or distribute an amendment or supplement
to the General Disclosure Package or the Prospectus or document incorporated
by
reference therein of which the Placement Agent shall not previously have been
advised and furnished with a copy or to which the Placement Agent shall have
reasonably objected in writing or which is not in compliance with the Rules
and
Regulations and (iii) file on a timely basis all reports and any definitive
proxy or information statements required to be filed by the Company with the
Commission subsequent to the date of the Prospectus and prior to the termination
of the offering of the Securities by the Placement Agent.
(b)
The
Company will (i) not make any offer relating to the Securities that would
constitute an Issuer Free Writing Prospectus or that would otherwise constitute
a “free writing prospectus” (as defined in Rule 405 under the Act) required to
be filed by the Company with the Commission under Rule 433 under the Act unless
the Placement Agent approves its use in writing prior to first use (each, a
“Permitted Free Writing Prospectus”); provided
that the
prior written consent of the Placement Agent hereto shall be deemed to have
been
given in respect of the Issuer Free Writing Prospectus(es) included in
Schedule
I
hereto,
(ii) treat each Permitted Free Writing Prospectus as an Issuer Free Writing
Prospectus, (iii) comply with the requirements of Rules 164 and 433 under the
Act applicable to any Issuer Free Writing Prospectus, including the requirements
relating to timely filing with the Commission, legending and record keeping
and
(iv) not take any action that would result in the Placement Agent or the Company
being required to file with the Commission pursuant to Rule 433(d) under the
Act
a free writing prospectus prepared by or on behalf of the Placement Agent that
such Placement Agent otherwise would not have been required to file thereunder.
The Company will satisfy the conditions in Rule 433 under the Act to avoid
a
requirement to file with the Commission any electronic road show.
12
(c)
The
Company will advise the Placement Agent promptly (i) when the Registration
Statement or any post-effective amendment thereto shall have become effective,
(ii) of receipt of any comments from the Commission, (iii) of any request of
the
Commission for amendment of the Registration Statement or for supplement to
the
General Disclosure Package or the Prospectus or for any additional information,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any order preventing or
suspending the use of any Preliminary Prospectus, any Issuer Free Writing
Prospectus or the Prospectus, or of the institution of any proceedings for
that
purpose or pursuant to Section 8A of the Act. The Company will use its best
efforts to prevent the issuance of any such order and to obtain as soon as
possible the lifting thereof, if issued.
(d)
The
Company will cooperate with the Placement Agent in endeavoring to qualify the
Securities for sale under the securities laws of such jurisdictions as the
Placement Agent may reasonably have designated in writing and will make such
applications, file such documents, and furnish such information as may be
reasonably required for that purpose, provided
the
Company shall not be required to qualify as a foreign corporation or to file
a
general consent to service of process in any jurisdiction where it is not now
so
qualified or required to file such a consent. The Company will, from time to
time, prepare and file such statements, reports, and other documents, as are
or
may be required to continue such qualifications in effect for so long a period
as the Placement Agent may reasonably request for distribution of the
Securities.
(e)
The
Company will deliver to, or upon the order of, the Placement Agent, from time
to
time, as many copies of any Preliminary Prospectus as the Placement Agent may
reasonably request. The Company will deliver to, or upon the order of, the
Placement Agent, from time to time, as many copies of any Issuer Free Writing
Prospectus as
the
Placement Agent may reasonably request. The Company will deliver to, or upon
the
order of, the Placement Agent during the period when delivery of a Prospectus
(or, in lieu thereof, the notice referred to under Rule 173(a) under the Act)
(the “Prospectus Delivery Period”) is required under the Act, as many copies of
the Prospectus in final form, or as thereafter amended or supplemented, as
the
Placement Agent may reasonably request. The Company will deliver to the
Placement Agent such number of copies of the Registration Statement (including
such number of copies of the exhibits filed therewith that may reasonably be
requested), including documents incorporated by reference therein, and of all
amendments thereto, as the Placement Agent may reasonably request.
(f)
The
Company will comply with the Act and the Rules and Regulations, and the Exchange
Act, and the rules and regulations of the Commission thereunder, so as to permit
the completion of the distribution of the Securities as contemplated in this
Agreement and the Prospectus. If during the period in which a prospectus (or,
in
lieu thereof, the notice referred to under Rule 173(a) under the Act) is
required by law to be delivered by an underwriter or dealer, any event shall
occur as a result of which, in the judgment of the Company or in the reasonable
opinion of the Placement Agent, it becomes necessary to amend or supplement
the
Prospectus in order to make the statements therein, in the light of the
circumstances existing at the time the Prospectus is delivered to a purchaser,
not misleading, or, if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will either (i) prepare
and file with the Commission an appropriate amendment to the Registration
Statement or supplement to the Prospectus or (ii) prepare and file with the
Commission an appropriate filing under the Exchange Act which shall be
incorporated by reference in the Prospectus so that the Prospectus as so amended
or supplemented will not, in the light of the circumstances when it is so
delivered, be misleading, or so that the Prospectus will comply with applicable
law.
(g)
If
the
General Disclosure Package is being used to solicit offers to buy the Securities
at a time when the Prospectus is not yet available to prospective purchasers
and
any event shall occur as a result of which, in the judgment of the Company
or in
the reasonable opinion of the Placement Agent, it becomes necessary to amend
or
supplement the General Disclosure Package in order to make the statements
therein, in the light of the circumstances, not misleading, or to make the
statements therein not conflict with the information contained in the
Registration Statement then on file, or if it is necessary at any time to amend
or supplement the General Disclosure Package to comply with any law, the Company
promptly will either (i) prepare, file with the Commission (if required) and
furnish to the Placement Agent an appropriate amendment or supplement to the
General Disclosure Package or (ii) prepare and file with the Commission an
appropriate filing under the Exchange Act which shall be incorporated by
reference in the General Disclosure Package so that the General Disclosure
Package as so amended or supplemented will not, in the light of the
circumstances, be misleading or conflict with the Registration Statement then
on
file, or so that the General Disclosure Package will comply with applicable
law.
13
(h)
The
Company will make generally available to its security holders, as soon as it
is
practicable to do so, but in any event not later than 15 months after the
effective date of the Registration Statement, an earnings statement (which
need
not be audited) in reasonable detail, covering a period of at least 12
consecutive months beginning after the effective date of the Registration
Statement, which earnings statement shall satisfy the requirements of Section
11(a) of the Act and Rule 158 under the Act and will advise the Placement Agent
in writing when such statement has been so made available.
(i)
Prior
to
the Closing Date, the Company will furnish to the Placement Agent, as soon
as
they have been prepared by or are available to the Company, a copy of any
unaudited interim financial statements of the Company for any period subsequent
to the period covered by the most recent financial statements appearing in
the
Registration Statement and the Prospectus.
(j) No
offering, sale, short sale or other disposition of any shares of Common Stock
of
the Company or other securities convertible into or exchangeable or exercisable
for shares of Common Stock or derivative of Common Stock (or agreement for
such)
will be made for a period of 60 days after the date of the Prospectus, directly
or indirectly, by the Company otherwise than hereunder or with the prior written
consent of the Placement Agent. Notwithstanding the foregoing, if (i) during
the
last 17 days of the 60-day restricted period, the Company issues an earnings
release or material news or a material event relating to the Company occurs;
or
(ii) prior to the expiration of the 60-day restricted period, the Company
announces that it will release earnings results during the 16-day period
following the last day of the 60-day restricted period, then in each case the
restrictions imposed by this Agreement shall continue to apply until the
expiration of the 18-day period beginning on the date of the release of the
earnings results or the occurrence of material news or a material event relating
to the Company, as the case may be, unless the Placement Agent waives, in
writing, such extension. Notwithstanding
the foregoing, the restrictions set forth above shall not apply to (a) the
issuance by the Company of shares of Common Stock upon the exercise of an option
or warrant or the conversion of a security outstanding on the date hereof or
the
granting or exercise of options or stock purchase rights pursuant to the
Company’s stock option and stock purchase plans, whenever granted; provided that
the underlying shares of Common Stock issued to any person who has delivered
a
Lockup Agreement shall continue to be subject to the restrictions contained
in
such Lockup Agreement, as applicable; (b) the issuance by the Company of shares
of Common Stock or options to purchase shares of Common Stock to, or the
repurchase by the Company of unvested shares of Common Stock upon termination
of
service from, an employee, director, consultant other service provider, pursuant
to the Company’s stock option plans, stock purchase plans or agreements in
effect on the date hereof, or approved by the Board of Directors and/or
stockholders before the date hereof; provided that the shares of Common Stock
or
options to purchase shares of Common Stock issued to the Company’s directors and
executive officers shall be subject to the restrictions contained in their
Lockup Agreement.
(k)
The
Company will use its best efforts to list the Securities for quotation on the
Nasdaq Capital Market and maintain the listing of the Securities on the Nasdaq
Capital Market.
14
(l)
The
Company has caused each officer and director of the Company whose name is set
forth on Exhibit
D
hereto
to furnish to the Placement Agent, on or prior to the date of this Agreement,
a
letter or letters, substantially in the form attached hereto as Exhibit
C
(the
“Lockup Agreement”).
(m)
The
Company shall apply the net proceeds of its sale of the Securities as set forth
in the Registration Statement, General Disclosure Package and the
Prospectus.
(n)
The
Company shall not invest, or otherwise use the proceeds received by the Company
from its sale of the Securities in such a manner as would require the Company
or
any of the Subsidiaries to register as an investment company under the 1940
Act.
(o)
The
Company will maintain a transfer agent and, if necessary under the jurisdiction
of incorporation of the Company, a registrar for the Common Stock.
(p) The
Company will not take, directly or indirectly, any action designed to cause
or
result in, or that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any securities
of
the Company.
(q) Prior
to
the Closing Date, the Company will not issue any press release or other
communication directly or indirectly or hold any press conference with respect
to the Company, its condition, financial or otherwise, or its earnings,
business, operations or prospects, or the offering of the Securities, without
the prior written consent of the Placement Agent, unless in the reasonable
judgment of the Company and its counsel, and after notification to the Placement
Agent, such press release or communication is required by law or by Nasdaq
Capital Market rules, in which case the Company shall use its reasonable best
efforts to allow the Placement Agent reasonable time to comment on such release
or other communication in advance of such issuance.
(r) The
Company will not incur any liability for any finder’s or broker’s fee or agent’s
commission in connection with the execution and delivery of this Agreement
or
the consummation of the transactions contemplated hereby (other than as set
forth in this Agreement).
(s) The
Company shall reserve and keep available at all times a sufficient number of
shares of Common Stock for the purpose of enabling the Company to issue the
Warrant Shares.
4. COSTS
AND EXPENSES.
The
Company, whether or not the transactions contemplated hereunder are consummated
or this Agreement is terminated, will pay or reimburse if paid by the Placement
Agent all costs and expenses incident to the performance of the obligations
of
the Company under this Agreement and in connection with the transactions
contemplated hereby, including but not limited to costs and expenses of or
relating to (i) the
preparation, printing, filing, delivery and shipping of the Registration
Statement, any Issuer Free Writing Prospectus, each Statutory Prospectus, the
General Disclosure Package and the Prospectus, and any amendment or supplement
to any of the foregoing (including costs of mailing and shipment),
(ii)
the registration, issue, sale and delivery of the Securities including any
stock
or transfer taxes and stamp or similar duties payable upon the sale, issuance
or
delivery of the Securities and the printing, delivery, and shipping of the
certificates representing the Securities, (iii)
the
registration or qualification of the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Placement Agent shall
designate, and, if reasonably requested by the Placement Agent, the preparation
and printing and furnishing of copies of any blue sky surveys to the Placement
Agent,
(iv)
the fees and expenses of any transfer agent or registrar for the Securities,
(v)
any
filing fees required to be made by the Placement Agent or the Company with
FINRA,
(vi)
fees, disbursements and other charges of counsel to the Company (vii) listing
fees, if any, for the listing or quotation of the Securities on the Nasdaq
Capital Market, (viii) fees and disbursements of the Company’s auditor incurred
in delivering the letter(s) described in Section
5(e)
of this
Agreement, (ix) fees of the Escrow Agent, and (x) the
costs
and expenses of the Company and the Placement Agent in connection with the
marketing of the offering and the sale of the Securities
to
prospective investors including,
but not limited to, those related to any presentations or meetings undertaken
in
connection therewith including, without limitation, expenses associated with
the
production of road show slides and graphics, fees and expenses of any
consultants engaged with the written consent of the Company in connection with
the road show presentations, travel, lodging and other expenses incurred by
the
officers of the Company and any such consultants, and the cost of any aircraft
or other transportation chartered in connection with the road show with the
written consent of the Company. In
addition, if this Agreement shall not be consummated because the conditions
in
Section 5 hereof are not satisfied, or because this Agreement is terminated
by
the Placement Agent pursuant to Section 9 hereof, or by reason of any failure,
refusal or inability on the part of the Company to perform any undertaking
or
satisfy any condition of this Agreement or to comply with any of the terms
hereof on its part to be performed, unless such failure, refusal or inability
is
due primarily to the default or omission of the Placement Agent, the Company
shall reimburse the Placement Agent for reasonable out-of-pocket expenses,
including fees and disbursements of counsel, reasonably incurred in connection
with investigating, marketing and proposing to market the Securities or in
contemplation of performing their obligations hereunder; provided,
however,
that no
such reimbursement shall be required in the event that this Agreement is
terminated by the Placement Agent pursuant to Section 9(a)(ii)-(v) hereof.
15
5. CONDITIONS
OF OBLIGATIONS OF THE PLACEMENT AGENT.
The
obligations of the Placement Agent hereunder are subject to the accuracy, as
of
the Applicable Time or the Closing Date, as the case may be, of the
representations and warranties of the Company contained herein, and to the
performance by the Company of its covenants and obligations hereunder and to
the
following additional conditions:
(a)
The
Prospectus and each Issuer Free Writing Prospectus required shall have been
filed as required by Rules 424, 430B, 430C or 433 under the Act, as applicable,
within the time period prescribed by, and in compliance with, the Rules and
Regulations, and any request of the Commission for additional information (to
be
included in the Registration Statement or otherwise) shall have been disclosed
to the Placement Agent and complied with to its reasonable satisfaction. No
stop
order suspending the effectiveness of the Registration Statement, as amended
from time to time, shall have been issued and no proceedings for that purpose
or
pursuant to Section 8A under the Act shall have been taken or, to the knowledge
of the Company, shall be contemplated or threatened by the Commission and no
injunction, restraining order or order of any nature by a Federal or state
court
of competent jurisdiction shall have been issued as of the Closing Date which
would prevent the issuance of the Securities.
(b) No
Prospectus or amendment or supplement to the Registration Statement shall have
been filed to which the Placement Agent shall have objected in writing, which
objection shall not be unreasonable. The Placement Agent shall not have in
good
faith advised the Company on or prior to the Closing Date that the Registration
Statement or any amendment thereof or supplement thereto contains an untrue
statement of fact which, in its opinion, is material, or omits to state a fact
which, in its opinion, is material and is required to be stated therein or
necessary to make the statements therein not misleading, or that the Disclosure
Package or any Issuer Free Writing Prospectus or the Prospectus or any amendment
thereof or supplement thereto contains an untrue statement of fact which, in
its
opinion, is material, or omits to state a fact which, in its opinion, is
material and is required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
16
(c) Prior
to
the Closing, there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or
in
the earnings, business, operations or prospects of the Company, taken as a
whole, from that set forth in the Disclosure Package and the Prospectus that,
in
the Placement Agent’s judgment, is material and adverse and that makes it, in
the Placement Agent’s judgment, impracticable to market the Securities on the
terms and in the manner contemplated in the Disclosure Package.
(d)
The
Placement Agent shall have received on the Closing Date the opinion of ▇▇▇▇▇▇▇,
Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP counsel for the Company, dated the Closing
Date, addressed to the Placement Agent (and stating that it may be relied upon
by counsel to the Placement Agent) in such form as shall be agreed to with
the
Placement Agent.
(e)
The
Placement Agent shall have received on the Closing Date the opinion of ▇▇▇▇▇
& ▇▇▇▇▇▇▇ LLP, Patent Attorney to the Company, in his capacity as such,
dated the Closing Date, addressed to the Placement Agent (and stating that
it
may be relied upon by counsel to the Placement Agent) in such form as shall
be
agreed to with the Placement Agent.
(f) The
Placement Agent shall have received from ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC, counsel for
the
Placement Agent, an opinion dated the Closing Date, in such form as shall be
agreed to with the Placement Agent.
(g)
The
Placement Agent shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof and the Closing Date, as the case may
be,
in form and substance satisfactory to the Placement Agent, of Ernst & Young
LLP confirming that they are an independent registered public accounting firm
with respect to the Company and the Subsidiaries within the meaning of the
Act
and the applicable Rules and Regulations and the PCAOB and stating that in
their
opinion the financial statements and schedules examined by them and included
or
incorporated by reference in the Registration Statement, the General Disclosure
Package and the Prospectus comply in form in all material respects with the
applicable accounting requirements of the Act and the related Rules and
Regulations; and containing such other statements and information as is
ordinarily included in accountants’ “comfort letters” to the Placement Agent
with respect to the financial statements and certain financial and statistical
information contained in the Registration Statement, the General Disclosure
Package and the Prospectus.
(h)
The
Placement Agent shall have received on the Closing Date a certificate or
certificates of the Chief Executive Officer of the Company to the effect that,
as of the Closing Date each of them severally represents as
follows:
(i)
The
Registration Statement has become effective under the Act and no stop order
suspending the effectiveness of the Registration Statement or no order
preventing or suspending the use of any Preliminary Prospectus, any Issuer
Free
Writing Prospectus or the Prospectus has been issued, and no proceedings for
such purpose or pursuant to Section 8A of the Act have been taken or are, to
his
or her knowledge, contemplated or threatened by the Commission;
(ii)
The
representations and warranties of the Company contained in Section 2 hereof
are
true and correct as of the Closing Date in all material respects except for
those representations and warranties which are qualified as to materiality
which
shall be true and correct in all respects;
(iii)
All
filings required to have been made pursuant to Rules 424, 430B or 430C under
the
Act have been made as and when required by such rules;
17
(iv)
He
or she
has carefully examined the General Disclosure Package and any individual Limited
Use Free Writing Prospectus, if any are used in connection with the Offering,
and, in his or her opinion, as of the Applicable Time, the statements contained
in the General Disclosure Package and any such individual Limited Use Free
Writing Prospectus did not contain any untrue statement of a material fact,
and
such General Disclosure Package and any individual Limited Use Free Writing
Prospectus, when considered together with the General Disclosure Package, did
not omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided,
however,
that
such certificate or certificates need not refer to the information provided
by
the Placement Agent, as described in Section 11 of this Agreement;
(v)
He
or she
has carefully examined the Registration Statement and, in his or her opinion,
as
of the effective date of the Registration Statement, the Registration Statement
and any amendments thereto did not contain any untrue statement of a material
fact and did not omit to state a material fact necessary in order to make the
statements therein not misleading, and since the effective date of the
Registration Statement, no event has occurred which should have been set forth
in a supplement to or an amendment of the Prospectus which has not been so
set
forth in such supplement or amendment; provided,
however,
that
such certificate or certificates need not refer to the information provided
by
the Placement Agent, as described in Section 11 of this Agreement;
(vi)
He
or she
has carefully examined the Prospectus and, in his or her opinion, as of its
date
and the Closing Date the Prospectus and any amendments and supplements thereto
did not contain any untrue statement of a material fact and did not omit to
state a material fact necessary in order to make the statements therein, in
the
light of the circumstances under which they were made, not misleading;
and
(vii)
Since
the
respective dates as of which information is given in the Registration Statement,
the General Disclosure Package and Prospectus, there has not been any material
adverse change or any development involving a prospective material adverse
change in or affecting the business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the Company
and
the Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business.
(i)
On
the
Closing Date, the Company shall have furnished to the Placement Agent a
Secretary’s Certificate of the Company.
(j) The
Company shall have furnished to the Placement Agent such further certificates
and documents confirming the representations and warranties, covenants and
conditions contained herein and related matters as the Placement Agent may
reasonably have requested.
(k)
The
Shares have been approved for quotation upon notice of issuance on the Nasdaq
Capital Market.
(l)
The
Lockup Agreements described in Section 3(l) are in full force and
effect.
(m) FINRA
shall not have raised any unresolved objection with respect to the fairness
and
reasonableness of the placement agency terms and arrangements relating to the
issuance and sale of the Securities.
18
(n) The
Placement Agent shall have received copies of the executed Lock-Up Agreements
executed by each person listed on Exhibit
D
hereto,
and such Lock-Up Agreements shall be in full force and effect on the Closing
Date.
(o) The
Placement Agent shall have entered into the Subscription Agreements with each
of
the Investors, and such agreements shall be in full force and effect on the
Closing Date.
(p) The
Placement Agent shall have entered into the Escrow Agreement, and such agreement
shall be in full force and effect on the Closing Date.
The
opinions and certificates mentioned in this Agreement shall be deemed to be
in
compliance with the provisions hereof only if, in the exercise of their
reasonable judgment, they are in all material respects satisfactory to the
Placement Agent and to ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC, counsel for the Placement
Agent.
If
any of
the conditions hereinabove provided for in this Section 5 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, the
obligations of the Placement Agent hereunder may be terminated by the Placement
Agent by notifying the Company of such termination in writing or by telegram
at
or prior to the Closing Date.
In
such
event, the Company and the Placement Agent shall not be under any obligation
to
each other (except to the extent provided in Sections 4 and 7
hereof).
6. CONDITIONS
OF THE OBLIGATIONS OF THE COMPANY.
The
obligations of the Company to sell and deliver the portion of the Securities
required to be delivered as and when specified in this Agreement are subject
to
the conditions that at the Closing Date no stop order suspending the
effectiveness of the Registration Statement shall have been issued and in effect
or proceedings therefor initiated or threatened.
7. INDEMNIFICATION.
(a)
The
Company agrees:
(i) to
indemnify and hold harmless the Placement Agent and each person, if any, who
controls the Placement Agent within the meaning of either Section 15 of the
Act
or Section 20 of the Exchange Act, against any losses, claims, damages or
liabilities to which the Placement Agent or any such controlling person may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) arise
out
of or are based upon (A) any untrue statement or alleged untrue statement of
any
material fact contained in the Registration Statement, any Preliminary
Prospectus, any Issuer Free Writing Prospectus the Prospectus or any amendment
or supplement thereto or (B) the omission or alleged omission to state therein
a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made; provided,
however,
that
the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission made
in
the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing
Prospectus, the Prospectus, or such amendment or supplement, in reliance upon
and in conformity with written information furnished to the Company by the
Placement Agent specifically for use therein, it being understood and agreed
that the only such information furnished by the Placement Agent consists of
the
information described as such in Section 11 herein; and
19
(ii)
to
reimburse the Placement Agent and each such controlling person upon demand
for
any legal or other out-of-pocket expenses reasonably incurred by the Placement
Agent or such controlling person in connection with investigating or defending
any such loss, claim, damage or liability, action or proceeding or in responding
to a subpoena or governmental inquiry related to the offering of the Securities,
whether or not the Placement Agent or controlling person is a party to any
action or proceeding. In the event that it is finally judicially determined
that
the Placement Agent was not entitled to receive payments for legal and other
expenses pursuant to this subparagraph, the Placement Agent will promptly return
all sums that had been advanced pursuant hereto.
(b)
The
Placement Agent will indemnify and hold harmless the Company, each of its
directors, each of its officers who have signed the Registration Statement,
and
each person, if any, who controls the Company within the meaning of the Act,
against any losses, claims, damages or liabilities to which the Company or
any
such director, officer, or controlling person may become subject under the
Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of or are based upon (i) any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, any Preliminary Prospectus, any Issuer Free Writing
Prospectus, the Prospectus or any amendment or supplement thereto, or (ii)
the
omission or the alleged omission to state therein a material fact required
to be
stated therein or necessary to make the statements therein not misleading in
the
light of the circumstances under which they were made; and will reimburse any
legal or other expenses reasonably incurred by the Company or any such director,
officer, or controlling person in connection with investigating or defending
any
such loss, claim, damage, liability, action or proceeding; provided,
however,
that
the Placement Agent will be liable in each case to the extent, but only to
the
extent, that such untrue statement or alleged untrue statement or omission
or
alleged omission has been made in the Registration Statement, any Preliminary
Prospectus, any Issuer Free Writing Prospectus,
the
Prospectus or such amendment or supplement, in reliance upon and in conformity
with written information furnished to the Company by the Placement Agent
specifically for use therein, it being understood and agreed that the only
such
information furnished by the Placement Agent consists of the information
described as such in Section 11 herein. This indemnity agreement will be in
addition to any liability which the Placement Agent may otherwise
have.
(c)
In
case
any proceeding (including any governmental investigation) shall be instituted
involving any person in respect of which indemnity may be sought pursuant to
this Section 7, such person (the “indemnified party”) shall promptly notify the
person against whom such indemnity may be sought (the “indemnifying party”) in
writing. No indemnification provided for in Section 7(a) or (b) shall be
available to any party who shall fail to give notice as provided in this Section
7(c) if the party to whom notice was not given was unaware of the proceeding
to
which such notice would have related and was materially prejudiced by the
failure to give such notice, but the failure to give such notice shall not
relieve the indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of the provisions of Section 7(a) or (b). In case any such proceeding shall
be
brought against any indemnified party and it shall notify the indemnifying
party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with
counsel satisfactory to such indemnified party and shall pay as incurred the
fees and disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own counsel
at its own expense. Notwithstanding the foregoing, the indemnifying party shall
pay as incurred (or within 30 days of presentation) the fees and expenses of
the
counsel retained by the indemnified party in the event (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention
of
such counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party
and representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them or (iii) the
indemnifying party shall have failed to assume the defense and employ counsel
acceptable to the indemnified party within a reasonable period of time after
notice of commencement of the action. It is understood that the indemnifying
party shall not, in connection with any proceeding or related proceedings in
the
same jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm for all such indemnified parties. Such firm shall be
designated in writing by the Placement Agent in the case of parties indemnified
pursuant to Section 7(a) and by the Company in the case of parties indemnified
pursuant to Section 7(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. In addition,
the
indemnifying party will not, without the prior written consent of the
indemnified party, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action or proceeding of which
indemnification may be sought hereunder (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.
20
(d)
To
the
extent the indemnification provided for in this Section 7 is unavailable to
or
insufficient to hold harmless an indemnified party under Section 7(a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions
or
proceedings in respect thereof) referred to therein, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities (or actions or
proceedings in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and the Placement
Agent on the other from the offering of the Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted
by
applicable law then each indemnifying party shall contribute to such amount
paid
or payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the Placement Agent on the other in connection
with
the statements or omissions which resulted in such losses, claims, damages
or
liabilities (or actions or proceedings in respect thereof), as well as any
other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the Placement Agent on the other shall be deemed to be
in
the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total fees received
by
the Placement Agent, in each case as set forth in the table on the cover page
of
the Prospectus. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Placement Agent
on
the other and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The
Company and the Placement Agent agree that it would not be just and equitable
if
contributions pursuant to this Section 7(d) were determined by pro rata
allocation or by any other method of allocation which does not take account
of
the equitable considerations referred to above in this Section 7(d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions or proceedings in respect thereof) referred
to above in this Section 7(d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), (i) the Placement Agent shall not be required
to contribute any amount in excess of the fees and commissions applicable to
the
Securities placed by the Placement Agent and (ii) 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.
21
(e)
In
any
proceeding relating to the Registration Statement, any Preliminary Prospectus,
any Issuer Free Writing Prospectus, the
Prospectus or any supplement or amendment thereto, each party against whom
contribution may be sought under this Section 7 hereby consents to the
jurisdiction of any court having jurisdiction over any other contributing party,
agrees that process issuing from such court may be served upon it by any other
contributing party and consents to the service of such process and agrees that
any other contributing party may join it as an additional defendant in any
such
proceeding in which such other contributing party is a party.
(f)
Any
losses, claims, damages, liabilities or expenses for which an indemnified party
is entitled to indemnification or contribution under this Section 7 shall be
paid by the indemnifying party to the indemnified party as such losses, claims,
damages, liabilities or expenses are incurred. The indemnity and contribution
agreements contained in this Section 7 and the representations and warranties
of
the Company set forth in this Agreement shall remain operative and in full
force
and effect, regardless of (i) any investigation made by or on behalf of the
Placement Agent or any person controlling the Placement Agent, the Company,
its
directors or officers or any persons controlling the Company, (ii) acceptance
of
any Securities and payment therefor hereunder, and (iii) any termination of
this
Agreement. A successor to the Placement Agent, or any person controlling the
Placement Agent, or to the Company, its directors or officers, or any person
controlling the Company, shall be entitled to the benefits of the indemnity,
contribution and reimbursement agreements contained in this Section
7.
8. NOTICES.
All
communications hereunder shall be in writing and, except as otherwise provided
herein, will be mailed, delivered, telecopied or telegraphed and confirmed
as
follows: (a) if to the Placement Agent, to Deutsche Bank Securities Inc., ▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, with a copy to Deutsche
Bank Securities Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
General Counsel, and with a copy to (which shall not constitute notice)
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PC, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; and (b) if to the Company, to Genelabs
Technologies Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇;
Attention: ▇▇▇▇▇ A.D. ▇▇▇▇▇, with a copy to (which shall not constitute notice)
▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
9. TERMINATION.
This
Agreement may be terminated by the Placement Agent by notice to the Company:
(a)
at
any
time prior to the Closing Date if any of the following has occurred: (i) since
the respective dates as of which information is given in the Registration
Statement, the General Disclosure Package and the Prospectus, any material
adverse change or any development involving a prospective material adverse
change in or affecting the earnings, business, management, properties, assets,
rights, operations, condition (financial or otherwise) or prospects of the
Company and the Subsidiaries taken as a whole, whether or not arising in the
ordinary course of business, (ii) any outbreak or escalation of hostilities
or
declaration of war or national emergency or other national or international
calamity or crisis or change in economic or political conditions if the effect
of such outbreak, escalation, declaration, emergency, calamity, crisis or change
on the financial markets of the United States would, in the Placement Agent’s
judgment, make it impracticable or inadvisable to market the Securities or
to
enforce contracts for the sale of the Securities, (iii) suspension of trading
in
securities generally on the New York Stock Exchange, the American Stock Exchange
or the Nasdaq Global Market or limitation on prices (other than limitations
on
hours or numbers of days of trading) for securities on any such trading market,
(iv) the enactment, publication, decree or other promulgation of any statute,
regulation, rule or order of any court or other governmental authority which
in
the Placement Agent’s opinion materially and adversely affects or may materially
and adversely affect the business or operations of the Company, (v) the
declaration of a banking moratorium by United States or New York State
authorities, or (vi) the suspension of trading of the Company’s common stock by
the Nasdaq Capital Market, the Commission, or any other governmental authority;
or
22
(b)
as
provided in Section 5 of this Agreement.
10. PERSONS
ENTITLED TO BENEFIT OF AGREEMENT; SUCCESSORS.
This
Agreement shall inure to the benefit of and shall be binding upon the Placement
Agent, the Company and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed
to
give any person other than the persons mentioned in the preceding sentence,
any
legal or equitable right, remedy or claim under or in respect of this Agreement,
or any provisions herein contained, except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the controlling persons, officers and directors
referred to in Section
7(a)
and the
indemnities of the Placement Agent shall also be for the benefit of the
controlling persons, officers and directors referred to in Section
7(b).
The
term “successors and assigns” as herein used shall not include any purchaser of
the Securities by reason merely of such purchase.
11. INFORMATION
PROVIDED BY PLACEMENT AGENT.
The
Company and the Placement Agent acknowledge and agree that the only information
furnished or to be furnished by the Placement Agent to the Company for inclusion
in the Registration Statement, any Preliminary Prospectus, any Issuer Free
Writing Prospectus or the Prospectus consists of the information set forth
in
the sixth and tenth paragraphs under the caption “Plan of Distribution” in the
Prospectus.
12. MISCELLANEOUS.
(a) The
reimbursement, indemnification and contribution agreements contained in this
Agreement and the representations, warranties and covenants in this Agreement
shall remain in full force and effect regardless of (i) any termination of
this
Agreement, (ii) any investigation made by or on behalf of the Placement Agent
or
controlling person thereof, or by or on behalf of the Company or its directors
or officers and (iii) delivery of and payment for the Securities under this
Agreement.
(b) The
Company acknowledges and agrees that the Placement Agent, in providing
investment banking services to the Company in connection with the offering,
including in acting pursuant to the terms of this Agreement, has acted and
is
acting as an independent contractor and not as a fiduciary and the Company
does
not intend such Placement Agent to act in any capacity other than as an
independent contractor, including as a fiduciary or in any other position of
higher trust.
(c) This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
(d) This
Agreement shall be governed by, and construed in accordance with, the law of
the
State of New York, including, without limitation, Section 5-1401 of the New
York
General Obligations Law.
(e) This
Agreement constitutes the entire agreement of the parties to this Agreement
and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter
hereof.
23
If
the
foregoing is in accordance with your understanding of our agreement, please
sign
and return to us the enclosed duplicates hereof, whereupon it will become a
binding agreement among the Company and the Placement Agent in accordance with
its terms.
|
Very
truly yours,
|
||
|
GENELABS
TECHNOLOGIES, INC.
|
||
| |
|
|
| By | /s/ | |
|
|
||
The
foregoing Placement Agency Agreement
is
▇▇▇▇▇▇
confirmed and accepted as
of
the
date first above written.
DEUTSCHE
BANK SECURITIES INC.
By
/s/
Authorized
Officer
By
/s/
Authorized
Officer
Schedules
and Exhibits
|
Schedule
I:
|
Permitted
Free Writing Prospectuses
|
|
|
Schedule
II:
|
Subsidiaries
|
|
|
Exhibit
A:
|
Form
of Subscription Agreement
|
|
|
Exhibit
B:
|
Form
of Warrant
|
|
|
Exhibit
C:
|
Form
of Lock-Up Agreement
|
|
|
Exhibit
D:
|
List
of Directors and Executive Officers Executing Lock-Up
Agreements
|
|
|
Exhibit
E:
|
Pricing
Information
|
SCHEDULE
I
ISSUER
FREE WRITING PROSPECTUSES
Term
Sheet
SCHEDULE
II
SUBSIDIARIES
|
Accelerated
Clinical Research Organization, Inc.
|
||||
|
Genelabs
Diagnostic, Inc.
|
||||
|
Genelabs
Europe B.V
|
EXHIBIT
A
FORM
OF SUBSCRIPTION AGREEMENT
EXHIBIT
B
FORM
OF WARRANT
EXHIBIT
C
FORM
OF LOCK-UP AGREEMENT
[Date]
Deutsche
Bank Securities Inc.
▇▇
▇▇▇▇
▇▇▇▇▇▇, 4th
Floor
New
York,
New York 10005
Ladies
and Gentlemen:
The
undersigned understands that Deutsche Bank Securities Inc., as placement agent
(the “Placement Agent”), proposes to enter into a Placement Agency Agreement
(the “Agreement”) with Genelabs Technologies Inc. (the “Company”), providing for
the public offering by the Placement Agent, of shares (the “Shares”) of common
stock, no par value (the “Common Stock”) and warrants to purchase shares of
Common Stock (the “Warrants” and, together with the Shares, the “Securities”),
of the Company (the “Public Offering”).
To
induce
the Placement Agent to continue its efforts in connection with the Public
Offering, the undersigned agrees that, without the prior written consent of
the
Placement Agent, the undersigned will not, directly or indirectly, offer, sell,
pledge, contract to sell (including any short sale), grant any option to
purchase or otherwise dispose of any shares of Common Stock (including, without
limitation, shares of Common Stock of the Company which may be deemed to be
beneficially owned by the undersigned on the date hereof in accordance with
the
rules and regulations of the Securities and Exchange Commission, shares of
Common Stock which may be issued upon exercise of a stock option or warrant
and
any other security convertible into or exchangeable for Common Stock) or enter
into any Hedging Transaction (as defined below) relating to the Common Stock
(each of the foregoing referred to as a “Disposition”) during the period
specified in the following paragraph (the “Lock-Up Period”). The foregoing
restriction is expressly intended to preclude the undersigned from engaging
in
any Hedging Transaction or other transaction which is designed to or reasonably
expected to lead to or result in a Disposition during the Lock-Up Period even
if
the securities would be disposed of by someone other than the undersigned.
“Hedging Transaction” means any short sale (whether or not against the box) or
any purchase, sale or grant of any right (including, without limitation, any
put
or call option) 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.
The
initial Lock-Up Period will commence on the date hereof and continue until,
and
include, the date that is 60 days after the date of the final prospectus
relating to the Public Offering (the “Initial Lock-Up Period”); provided,
however,
that if
(1) during the last 17 days of the Initial Lock-Up Period, (A) the Company
releases earnings results or (B) material news or a material event relating
to
the Company occurs, or (2) prior to the expiration of the Initial Lock-Up
Period, the Company announces that it will release earnings results during
the
16-day period following the last day of the Initial Lock-Up Period, then in
each
case the Lock-Up Period will be extended until the expiration of the 18-day
period beginning on the date of the release of the earnings results or the
occurrence of material news or a material event relating to the Company, as
the
case may be, unless the Placement Agent waives, in writing, such
extension.
Notwithstanding
the foregoing, the undersigned may transfer (a) shares of Common Stock acquired
in open market transactions by the undersigned after the completion of the
Public Offering, (b) shares of Common Stock sold under any Rule 10b5-1 trading
plan established prior to the date hereof, and (c) any or all of the shares
of
Common Stock or other Company securities if the transfer is by (i) gift, will
or
intestacy, or (ii) distribution to partners, members or shareholders of the
undersigned; provided,
however,
that in
the case of a transfer pursuant to clause (b) above, it shall be a condition
to
the transfer that the transferee execute an agreement stating that the
transferee is receiving and holding the securities subject to the provisions
of
this Lock-Up Agreement.
The
undersigned agrees that the Company may, and that the undersigned will, (i)
with
respect to any shares of Common Stock or other Company securities for which
the
undersigned is the record holder, cause the transfer agent for the Company
to
note stop transfer instructions with respect to such securities on the transfer
books and records of the Company and (ii) with respect to any shares of Common
Stock or other Company securities for which the undersigned is the beneficial
holder but not the record holder, cause the record holder of such securities
to
cause the transfer agent for the Company to note stop transfer instructions
with
respect to such securities on the transfer books and records of the
Company.
In
addition, the undersigned hereby waives any and all notice requirements and
rights with respect to registration of securities pursuant to any agreement,
understanding or otherwise setting forth the terms of any security of the
Company held by the undersigned, including any registration rights agreement
to
which the undersigned and the Company may be party; provided
that
such waiver shall apply only to the proposed Public Offering, and any other
action taken by the Company in connection with the proposed Public
Offering.
The
undersigned hereby agrees that, to the extent that the terms of this Lock-Up
Agreement conflict with or are in any way inconsistent with any registration
rights agreement to which the undersigned and the Company may be a party, this
Lock-Up Agreement supersedes such registration rights agreement.
The
undersigned hereby represents and warrants that the undersigned has full power
and authority to enter into this Lock-Up Agreement. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of
the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors and assigns of the
undersigned.
Notwithstanding
anything herein to the contrary, if the closing of the Public Offering has
not
occurred prior to October 15, 2007, this agreement shall be of no further force
or effect.
| Signature: ________________________________ | ||
| Print Name: ______________________________ | ||
|
Number
of shares owned
subject
to warrants, options
or
convertible securities:
_______________________
_______________________
|
Certificate
numbers:
_______________________
_______________________
|
EXHIBIT
D
LIST
OF
DIRECTORS AND OFFICERS EXECUTING LOCK-UP AGREEMENTS
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▇▇▇▇▇▇, PhD.
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▇▇▇▇, PhD.
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A.D. ▇▇▇▇▇
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▇▇▇▇▇▇▇▇, PhD.
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▇▇▇▇▇ ▇▇▇▇▇▇
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▇. ▇▇▇▇▇▇▇▇, M.D.
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EXHIBIT
E
PRICING
INFORMATION
Number
of
Shares to be Issued: 12,874,547
Offering
Price: $1.84
Number
of
Warrants to be Issued: 2,574,911
Exercise
Price of Warrants: $2.08
Aggregate
Placement Agency Fees: $1,895,133
Estimated
Net Proceeds to the Company (exclusive of estimated expenses of the Company):
$23,689,166.48