EXHIBIT 1.1
5,134,100 SHARES
SPECTRUM PHARMACEUTICALS, INC.
SHARES OF COMMON STOCK
(PAR VALUE $0.001 PER SHARE)
PLACEMENT AGENT AGREEMENT
May 4, 2007
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
Lazard Capital Markets LLC
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC
ThinkEquity Partners, LLC
c/o Oppenheimer & Co. Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
Spectrum Pharmaceuticals, Inc., a Delaware corporation (the "COMPANY"),
proposes to sell to the Purchasers, pursuant to the terms of this Placement
Agent Agreement (this "AGREEMENT") and the Subscription Agreements in the form
of Exhibit A attached hereto (the "SUBSCRIPTION AGREEMENTS") entered into with
the Purchasers identified therein (each a "PURCHASER" and, collectively, the
"PURCHASERS"), up to an aggregate of 5,134,100 shares (the "SHARES") of the
Company's common stock, par value $0.001 per share (the "COMMON STOCK"). The
Company hereby confirms its agreement with the placement agents named on
Schedule I attached hereto (the "PLACEMENT AGENTS") as set forth below.
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. ("OPPENHEIMER") is acting as the representative of the
Placement Agents and in such capacity is hereinafter referred to as the
"REPRESENTATIVE." Certain terms used herein are defined in Section 14 hereof:
1. AGREEMENT TO ACT AS PLACEMENT AGENT; PLACEMENT OF SECURITIES. On the basis of
the representations, warranties and agreements of the Company herein contained,
and subject to all the terms and conditions of this Agreement:
(a) The Company hereby authorizes the Placement Agents to act as its
exclusive agents to solicit offers for the purchase of all or part of
the Shares from the Company in connection with the proposed offering of
the Shares (the "OFFERING"). Until the Closing Date (as defined in
Section 3 hereof) or upon the termination of the Offering, the Company
shall not, without the prior written consent of the Representative,
solicit or accept offers to purchase the Shares otherwise than through
the Placement Agents. Lazard Capital Markets LLC ("LCM") may utilize the
expertise of Lazard Freres & Co. LLC in connection with LCM's placement
agent activities.
(b) The Placement Agents agree, as agents of the Company, to use their
reasonable best efforts to solicit offers to purchase the Shares from
the Company on the terms and subject to the conditions set forth in the
Prospectus (as defined below). The Placement Agents shall make
commercial reasonable efforts to assist the Company in obtaining
performance by each Purchaser whose offer to purchase Shares has been
solicited by the Placement Agents and accepted by the Company, but the
Placement Agents shall not, except as otherwise provided in this
Agreement, be obligated to disclose the identity of any potential
purchaser or have any liability to the Company in the event any such
purchase is not consummated for any reason. Under no circumstances will
the Placement Agents be obligated to purchase any Shares for their own
account and, in soliciting purchases of Shares, the Placement Agents
shall act solely as the Company's agents and not as principals.
Notwithstanding the foregoing and except as otherwise provided in
Section 1(c), it is understood and agreed that the Placement Agents (or
their affiliates) may, solely at their discretion and without any
obligation to do so, purchase Shares as principals, provided, however,
that any such purchases by the Placement Agents shall be subject to the
prior approval of the Company, in its sole discretion, and that such
purchases are properly disclosed in the General Disclosure Package if
required under the securities laws.
(c) Subject to the provisions of this Section 1, offers for the purchase
of Shares may be solicited by the Placement Agents as agents for the
Company at such times and in such amounts as the Placement Agents deem
advisable. Each Placement Agent shall communicate to the Company, orally
or in writing, each reasonable offer to purchase Shares received by it
as agent of the Company. The Company shall have the sole and absolute
right to accept offers to purchase the Shares and may reject any such
offer, in whole or in part. Each Placement Agent shall have the right,
in its discretion reasonably exercised, without notice to the Company,
to reject any offer to purchase Shares received by it, in whole or in
part, and any such rejection shall not be deemed a breach of its
agreement contained herein.
(d) The purchases of the Shares by the Purchasers shall be evidenced by
the execution of the Subscription Agreements by each of the parties
thereto.
(e) As compensation for services rendered, on the Closing Date the
Company shall pay to the Placement Agents by wire transfer of
immediately available funds to an account or accounts designated by the
Representative, an amount equal to six percent (6%) of the gross
proceeds received by the Company from the sale of the Shares on such
Closing Date.
(f) No Share 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 Share shall have been delivered to the
Purchaser thereof against payment by such Purchaser. If the Company
shall default in its obligations to deliver any Shares to a Purchaser
whose offer it has accepted, the Company shall indemnify and hold the
Placement Agents harmless against any loss, claim or damage arising from
or as a result of such default by the Company in accordance with Section
7 of the Agreement.
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2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to, and agrees with, the Placement Agents that:
(a) The Company has prepared and filed in conformity with the
requirements of the Securities Act of 1933, as amended (the "SECURITIES
ACT"), and published rules and regulations thereunder (the "RULES AND
REGULATIONS") adopted by the Securities and Exchange Commission (the
"COMMISSION") a "shelf" Registration Statement (as hereinafter defined)
on Form S-3 as amended (No. 333-121612), which became effective on
January 24, 2005, (the "EFFECTIVE DATE"), including a base prospectus
relating to the Shares (the "BASE PROSPECTUS"), and such amendments and
supplements thereto as may have been required to the date of this
Agreement. The term "REGISTRATION STATEMENT" as used in this Agreement
means the registration statement (including all exhibits, financial
schedules and all documents and information deemed to be a part of the
Registration Statement pursuant to Rule 430A or 434(d) under the
Securities Act), as amended or supplemented to the date of this
Agreement, including the Base Prospectus. The Registration Statement is
effective under the Securities Act and no stop order preventing or
suspending the effectiveness of the Registration Statement or suspending
or preventing the use of the Prospectus has been issued by the
Commission and, to the knowledge of the Company, no proceedings for that
purpose have been instituted or are threatened by the Commission. The
Company, if required by the Rules and Regulations of the Commission,
proposes to file the Prospectus (as defined below), with the Commission
pursuant to Rule 424(b) of the Rules and Regulations. The term
"PROSPECTUS" as used in this Agreement means the Prospectus, in the form
in which it is to be filed with the Commission pursuant to Rule 424(b)
of the Rules and Regulations, or, if the Prospectus is not to be filed
with the Commission pursuant to Rule 424(b), the Prospectus in the form
included as part of the Registration Statement as of the Effective Date,
except that if any revised prospectus or prospectus supplement shall be
provided to the Placement Agents by the Company for use in connection
with the offering and sale of the Shares which differs from the
Prospectus (whether or not such revised prospectus or prospectus
supplement is required to be filed by the Company pursuant to Rule
424(b) of the Rules and Regulations), the term "PROSPECTUS" shall refer
to such revised prospectus or prospectus supplement, as the case may be,
from and after the time it is first provided to the Placement Agents for
such use. Any preliminary prospectus or prospectus subject to completion
included in the Registration Statement or filed with the Commission
pursuant to Rule 424 under the Securities Act is hereafter called a
"PRELIMINARY PROSPECTUS." Any reference herein to the Registration
Statement, any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 which were filed under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), on or before the
last to occur of the Effective Date, the date of the Preliminary
Prospectus, or the date of the Prospectus, and any reference herein to
the terms "amend," "amendment," or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include (i) the filing of any document
under the Exchange Act after the Effective Date, the date of such
Preliminary Prospectus or the date of the Prospectus, as the case may
be, which is incorporated by reference and (ii) any such document so
filed, but excluding any documents or information furnished to
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the Commission under Item 2.02 or Item 7.01 of any Current Report on
Form 8-K. If the Company has filed an abbreviated registration statement
to register additional Shares pursuant to Rule 462(b) under the Rules
(the "462(b) REGISTRATION STATEMENT"), then any reference herein to the
Registration Statement shall also be deemed to include such 462(b)
Registration Statement.
(b) As of the Applicable Time (as defined below) and as of the Closing
Date, neither (i) the Pricing Prospectus (as defined below) and any
information included on Schedule B hereto (the "PRICING INFORMATION")
and the General Use Free Writing Prospectus (as defined below), if any,
issued at or prior to the Applicable Time, all considered together
(collectively, the "GENERAL DISCLOSURE PACKAGE"), nor (ii) any
individual Limited Use Free Writing Prospectus (as defined below), if
any, 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 any Issuer Free Writing Prospectus, in reliance upon, and
in conformity with, written information furnished to the Company by the
Placement Agents specifically for inclusion therein, or information that
is not furnished to the Company by the Placement Agent but should have
been in order to make the Issuer Free Writing Prospectus not misleading,
which information the parties hereto agree is limited to the Placement
Agents' Information (as defined in Section 16). As used in this
paragraph (b) and elsewhere in this Agreement:
"APPLICABLE TIME" means 4:30 P.M., New York time, on the date of this
Agreement.
"PRICING PROSPECTUS" means the Preliminary Prospectus, if any, and the
Base Prospectus, each as amended and supplemented as of immediately
prior to the Applicable Time, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part
thereof.
"ISSUER FREE WRITING PROSPECTUS" means any "issuer free writing
prospectus," as defined in Rule 433 under the Securities Act relating to
the Shares 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 Securities Act.
"GENERAL USE FREE WRITING PROSPECTUS" means any Issuer Free Writing
Prospectus that is identified on Schedule A to this Agreement.
"LIMITED USE FREE WRITING PROSPECTUSES" means any Issuer Free Writing
Prospectus that is not a General Use Free Writing Prospectus.
(c) No 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 Shares has been issued by the
Commission, and, to the knowledge of the Company, no proceeding for that
purpose or pursuant to Section 8A of the
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Securities Act has been instituted or is threatened by the Commission,
and each Preliminary Prospectus, if any, at the time of filing thereof,
conformed in all material respects to the requirements of the Securities
Act and the Rules and Regulations, and did not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in 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 any
Preliminary Prospectus, in reliance upon, and in conformity with,
written information furnished to the Company by the Placement Agents
specifically for inclusion therein or information that is not furnished
to the Company by the Placement Agent but should have been in order to
make the Preliminary Prospectus not misleading, which information the
parties hereto agree is limited to the Placement Agents' Information (as
defined in Section 16).
(d) At the time the Registration Statement and any amendments thereto
became effective, at the date of this Agreement and at the Closing Date,
the Registration Statement and any amendments thereto conformed and will
conform in all material respects to the requirements of the Securities
Act and the Rules and Regulations and did not and will not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading; and the Pricing Prospectus and Prospectus and
any amendments or supplements thereto, at time the Pricing Prospectus
and Prospectus or any amendment or supplement thereto was issued and at
the Closing Date, conformed and will conform in all material respects to
the requirements of the Securities Act and the Rules and Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the foregoing representations and
warranties in this paragraph (d) shall not apply to information
contained in or omitted from the Registration Statement or the Pricing
Prospectus and Prospectus, or any amendment or supplement thereto, in
reliance upon, and in conformity with, written information furnished to
the Company by the Placement Agents specifically for inclusion therein,
or information that is not furnished to the Company by the Placement
Agent but should have been in order to make the Preliminary Prospectus
not misleading which information the parties hereto agree is limited to
the Placement Agents' Information (as defined in Section 16).
(e) Each Issuer Free Writing Prospectus, if any, as of its issue date
and at all subsequent times through the completion of the public offer
and sale of the Shares or until any earlier date that the Company
notified or notifies the Placement Agents as described in Section 4(e),
did not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement, Pricing Prospectus or the Prospectus, including
any document incorporated by reference therein and any prospectus
supplement deemed to be a part thereof that has not been superseded or
modified, or included or would include an untrue statement of a material
fact or omitted or would omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in
the light of the circumstances prevailing
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at the subsequent time, not misleading. The foregoing sentence does not
apply to statements in or omissions from any Issuer Free Writing
Prospectus in reliance upon, and in conformity with, written information
furnished to the Company by the Placement Agents specifically for
inclusion therein, or information that is not furnished to the Company
by the Placement Agent but should have been in order to make the Free
Writing Prospectus not misleading which information the parties hereto
agree is limited to the Placement Agents' Information (as defined in
Section 16).
(f) The documents incorporated by reference in the Registration
Statement, the Pricing Prospectus and the Prospectus, when they became
effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Securities
Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder and none of such documents contained any
untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and any further documents so filed and incorporated by
reference in the Registration Statement, the Pricing Prospectus and the
Prospectus, when such documents become effective or are filed with the
Commission , as the case may be, will conform in all material respects
to the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
they were made, not misleading.
(g) The Company has not, directly or indirectly, distributed and will
not distribute any offering material in connection with the offering and
sale of the Shares other than any Preliminary Prospectus, the Pricing
Prospectus and the Prospectus and other materials, if any, permitted
under the Securities Act and consistent with Section 4(b)) below. The
Company will file with the Commission all Issuer Free Writing
Prospectuses, if any, in the time and manner required under Rules
164(b)(2) and 433(d) under the Securities Act.
(h) The Company has been duly incorporated and is validly existing as a
corporation in good standing (or the equivalent thereof, if any) under
the laws of its jurisdiction of incorporation, is duly qualified to do
business and is in good standing (or the equivalent thereof, if any) as
a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, and has all power and authority necessary to own or hold
its properties and to conduct the business in which it is engaged,
except where the failure to be so qualified and in good standing or have
such power or authority would not have, individually or in the
aggregate, a material adverse effect on the financial condition, results
of operations, business or properties of the Company and its
subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT").
(i) The Shares to be issued and sold by the Company hereunder and under
the Subscription Agreements have been duly and validly authorized and,
when issued and delivered against payment therefor as provided herein,
will be duly and
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validly issued, fully paid and nonassessable and free of any preemptive
or similar rights. The Shares conform to the descriptions thereof
contained in the General Disclosure Package.
(j) The Company has an authorized capitalization as set forth in the
General Disclosure Package. All of the issued and outstanding shares of
capital stock of the Company have been duly and validly authorized and
issued, are fully paid and non-assessable, have been issued in
compliance with federal and state securities laws, and conform to the
description thereof contained in the General Disclosure Package. As of
April 24, 2007, there were 25,670,721 shares of Common Stock issued and
outstanding and 15,296,307 shares of Common Stock were issuable upon the
exercise of all options, warrants and convertible securities outstanding
as of such date. Since such date, the Company has not issued any
securities, other than Common Stock of the Company issued pursuant to
the exercise of stock options previously outstanding under the Company's
stock option plans or the issuance of restricted Common Stock pursuant
to employee stock purchase plans. None of the outstanding shares of
Common Stock was issued in violation of any preemptive rights, rights of
first refusal or other similar rights to subscribe for or purchase
securities of the Company. There are no authorized or outstanding shares
of capital stock, options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities
convertible into or exchangeable or exercisable for, any capital stock
of the Company or any of its subsidiaries other than those described
above or described in the General Disclosure Package. The description of
the Company's stock option, stock bonus and other stock plans or
arrangements, and the options or other rights granted thereunder, as
described in the General Disclosure Package, fairly presents, in all
material respects, the information required to be disclosed with respect
to such plans, arrangements, options and rights.
(k) The Company has the full right, power and authority to enter into
this Agreement, each of the Subscription Agreements and to perform and
to discharge its obligations hereunder and thereunder; and each of this
Agreement and each of the Subscription Agreements has been duly
authorized, executed and delivered by the Company, and constitutes a
valid and binding obligation of the Company enforceable in accordance
with its terms, except as limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general
application affecting the enforcement of creditors' rights generally and
(ii) general principles of equity, regardless of whether asserted in a
proceeding at equity or law, and except to the extent that the
indemnification and contribution provisions of Section 7 hereof may be
limited by federal or state securities laws and public policy
considerations in respect thereof.
(l) The execution, delivery and performance of this Agreement and the
Subscription Agreements by the Company and the consummation of the
transactions contemplated hereby and thereby will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company is a
party or by which the Company is bound or to which any of the property
or assets of the Company is subject except where any such breach or
violation would not have, individually or in the aggregate, a
7
Material Adverse Effect, nor will such actions result in any violation
of the provisions of the charter or by-laws of the Company or any
statute, law, rule or regulation or any judgment, order or decree of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties or assets.
(m) There is no franchise, contract, lease, instrument or other document
of a character required by the Securities Act or the Rules and
Regulations to be described in the General Disclosure Package, or to be
filed as an exhibit to the Registration Statement, which is not
described or filed as required; and all statements summarizing any such
franchises, contracts, leases, instruments or other documents contained
in the Registration Statement fairly present, in all material respects,
the information required to be shown with respect thereto. Other than as
described in the General Disclosure Package, no such franchise,
contract, lease, instrument or other document has been suspended or
terminated for convenience or default by the Company or any of the other
parties thereto, and other than as described in the General Disclosure
Package, the Company has not received notice or any other knowledge of
any such pending or threatened suspension, or termination, except for
such pending or threatened suspensions, or terminations that would not
reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect.
(n) [intentionally omitted].
(o) No consent, approval, authorization, filing with or order of or
registration with, any court or governmental agency or body is required
in connection with the transactions contemplated herein and in the
Subscription Agreements, except such as have been obtained or made under
the Securities Act or the Exchange Act or the listing standards and
other rules of the NASDAQ Stock Market and such as may be required under
the securities, or blue sky, laws of any jurisdiction in connection with
the offer and sale of the Shares by the Company in the manner
contemplated herein and in the General Disclosure Package.
(p) Except as described in the General Disclosure Package, (i) other
than the License and Collaboration Agreement for D-63153 dated as of
August 12, 2004 by and between Zentaris Gmbh and the Company, no person
has the right, contractual or otherwise, to cause the Company to issue
or sell to it any shares of Common Stock or shares of any other capital
stock or other equity interests of the Company, (ii) no person has any
preemptive rights, resale rights, rights of first refusal or other
rights to purchase any shares of Common Stock or shares of any other
capital stock or other securities of the Company, and (iii) except as
provided herein, no person has the right to act as an underwriter,
placement agent or financial advisor to the Company in connection with
and as a result of the offer and sale of the Shares, in the case of each
of the foregoing clauses (i), (ii) and (iii), whether as a result of the
filing or effectiveness of the Registration Statement or the sale of the
Shares as contemplated thereby or otherwise; no person has the right,
contractual or otherwise, to cause the Company to register under the
Securities Act any shares of Common Stock or shares of any other capital
stock or other securities of the Company, or to include any such shares
or interests in the Registration Statement or the offering contemplated
thereby, whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated thereby
or otherwise, except for persons and entities who
8
have expressly waived such right or who have been given timely and
proper notice and have failed to exercise such right within the time or
times required under the terms and conditions of such right, and the
Company is not required to file any registration statement for the
registration of any securities of any person or register any such
securities pursuant to any other registration statement filed by the
Company under the Securities Act for a period of at least 180 days after
the date hereof.
(q) The financial statements, together with the related notes and
schedules, of the Company included in the General Disclosure Package, or
the Registration Statement or incorporated by reference therein, as the
case may be, present fairly the financial condition, results of
operations and cash flows of the Company and its consolidated
subsidiaries and other consolidated entities as of the dates and for the
periods indicated, comply in all material respects with the Securities
Act and the Rules and Regulations thereunder, and have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis throughout the periods involved except as otherwise
stated in the General Disclosure Package or the Registration Statement
or incorporated by reference therein, as the case may be. No other
financial statements or supporting schedules or exhibits are required by
the Securities Act or the Rules and Regulations thereunder to be
included in the General Disclosure Package or the Registration Statement
or incorporated by reference therein, as the case may be.
(r) Except as set forth in the General Disclosure Package, there is no
legal or governmental proceeding pending to which the Company is a party
or of which any property or assets of the Company is the subject which
is required to be described in the General Disclosure Package and is not
described therein, or which, individually or in the aggregate, if
determined adversely to the Company, would have a Material Adverse
Effect or would prevent or adversely affect the ability of the Company
to perform its obligations under this Agreement; and to the best of the
Company's knowledge, no such proceedings are threatened or contemplated
by governmental authorities or threatened by others.
(s) The Company has good and marketable title to all property (real and
personal) described in the Registration Statement and the General
Disclosure Package as being owned by the Company, free and clear of all
claims, liens, encumbrances, security interests, defects or restrictions
upon voting or transfer or any other claims of any kind ("LIENS"),
except for Liens that do not materially interfere with the use made or
proposed to be made of such property by the Company or that would not
have a Material Adverse Effect; all the property described in the
Registration Statement and the General Disclosure Package as being held
under lease by the Company is held thereby under valid, subsisting and
enforceable leases except where the failure to be valid, subsisting or
enforceable would not have a Material Adverse Effect.
(t) The Company is not (i) in violation of any provision of its charter
or by-laws, (ii) in default in any respect, and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant, or
condition of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation,
condition, covenant or instrument to which it is a party or
9
by which it is bound or to which any of its property or assets is
subject, or (iii) in violation in any respect of any statute, law, rule,
regulation, ordinance, judgment, order or decree of any court,
regulatory body, administrative agency, governmental body, arbitrator or
other authority having jurisdiction over the Company or any of its
properties, as applicable (including, without limitation, those
administered by the Food and Drug Administration of the U.S. Department
of Health and Human Services (the "FDA") or by any foreign, federal,
state or local governmental or regulatory authority performing functions
similar to those performed by the FDA), except, with respect to clauses
(ii) and (iii), any violations or defaults which, individually or in the
aggregate, would not have a Material Adverse Effect.
(u) The contracts described in the Company's Form 10-K for the year
ended December 31, 2006 and any Forms 10-Q and 8-K filed subsequently to
such Form 10-K as filed by the Company with the Commission or
incorporated by reference therein that are material to the Company are
in full force and effect on the date hereof, and except as disclosed in
the General Disclosure Package, neither the Company nor, to the
Company's knowledge, any other party to such contracts is in breach of
or default under any of such contracts except any such breach or default
which, individually or in the aggregate, would not have a Material
Adverse Effect.
(v) The Company has fulfilled its obligations, if any, under the minimum
funding standards of ▇▇▇▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Employee
Retirement Income Security Act of 1974 ("ERISA") and the regulations and
published interpretations thereunder with respect to each "plan"(as
defined in Section 3(3) of ERISA and such regulations and published
interpretations) in which employees of the Company are eligible to
participate and each such plan is in compliance in all material respects
with the presently applicable provisions of ERISA and such regulations
and published interpretations. No non-exempt "prohibited transaction"(as
defined in Section 406 of ERISA, or Section 4975 of the Internal Revenue
Code of 1986, as amended from time to time (the "CODE")) has occurred
with respect to any employee benefit plan which would reasonably be
expected to have a Material Adverse Effect. The Company has not incurred
any unpaid liability to the Pension Benefit Guaranty Corporation (other
than for the payment of premiums in the ordinary course). Each "pension
plan"(as defined in ERISA) for which the Company would have any
liability that is intended to be qualified under Section 401 (a) of the
Code has received a timely determination letter from the IRS, and
nothing has occurred, whether by action or by failure to act, which
would reasonably be expected to cause the loss of such qualification.
(w) The Company carries, or is covered by, insurance in such amounts and
covering such risks as is adequate for the conduct of its businesses and
the value of its properties and as is customary for similar-sized
companies engaged in similar businesses in similar industries; all such
insurance is fully in force on the date hereof and will be fully in
force on the Closing Date.
(x) The Company has made all filings, applications and submissions
required by, and possesses all approvals, licenses, certificates,
certifications, clearances, consents, exemptions, marks, notifications,
orders, permits and other authorizations issued by, the appropriate
federal, state or foreign regulatory
10
authorities (including, without limitation, the FDA, and any other
foreign, federal, state or local government or regulatory authorities
performing functions similar to those performed by the FDA) necessary to
conduct its businesses as described in the General Disclosure Package
(collectively, "PERMITS"), except for such Permits which the failure to
obtain would not have a Material Adverse Effect (the "IMMATERIAL
PERMITS"), and is in compliance in all material respects with the terms
and conditions of all such Permits other than the Immaterial Permits
(the "REQUIRED PERMITS"); all of such Required Permits held by the
Company are valid and in full force and effect; there is no pending or,
to the Company's knowledge, threatened action, suit, claim or proceeding
which may cause any such Required Permit to be limited, revoked,
cancelled, suspended, modified or not renewed and the Company has not
received any notice of proceedings relating to the limitation,
revocation, cancellation, suspension, modification or non-renewal of any
such Required Permit which, individually or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a
Material Adverse Effect, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated by
the General Disclosure Package.
(y) ▇▇▇▇▇ & Company, who have certified certain financial statements of
the Company and delivered their report with respect to the audited
consolidated financial statements and schedules included in the General
Disclosure Package or the Registration Statement, or incorporated by
reference therein, as the case may be, are, to the Company's knowledge,
an independent registered public accounting firm with respect to the
Company within the meaning of the Securities Act and the Rules and
Regulations.
(z) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions
thereof (except in any case in which the failure so to file would not
have a Material Adverse Effect and except as set forth in the General
Disclosure Package) and has paid all taxes required to be paid by it and
any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good
faith or as would not have a Material Adverse Effect and except as set
forth in the General Disclosure Package.
(aa) The principal executive officer and principal financial officer of
the Company have made all certifications required by the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act of 2002 (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT"), and the rules and regulations
promulgated thereunder, and the statements contained in any such
certification are correct and comply as to form as of the dates made.
The Company maintains "disclosure controls and procedures"(as defined in
Rule 13a-14(c) under the Exchange Act), and such controls and procedures
are designed (i) to ensure that information 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 Commission's rules and forms and (ii) to ensure
that information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and
communicated to the Company's management, including its principal
executive officer and principal
11
financial officer, as appropriate to allow timely decisions regarding
required disclosure. At March 31, 2007, the Company did not have any
material weaknesses in internal control over financial reporting (as
defined in Rule 13a-15(f) under the Exchange Act), and, to the Company's
knowledge, there has been no fraud, whether or not material, that
involves management or other employees who have a significant role in
the Company's internal control over financial reporting. To its
knowledge, the Company is otherwise in compliance in all material
respects with all applicable effective provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act and the rules and regulations promulgated thereunder by the
Commission.
(bb) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability of assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(cc) The Company (i) is in compliance in all material respects with any
and all applicable foreign, federal, state and local laws and
regulations relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("ENVIRONMENTAL LAWS"), (ii) has received and is in
compliance with all permits, licenses or other approvals required of it
under applicable Environmental Laws to conduct its business and (iii)
has not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where
such non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not,
individually or in the aggregate, have a Material Adverse Effect,
whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated by the General
Disclosure Package. The Company has not been named as a "potentially
responsible party" under the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended.
(dd) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of medical wastes,
toxic wastes, hazardous wastes or hazardous substances by the Company
(or, to the knowledge of the Company, any of its predecessors in
interest) at, upon or from any of the property now or previously owned
or leased by the Company in violation of any applicable Environmental
Law which would require remedial action under any applicable
Environmental Law, except for any violation or remedial action which
would not cause, individually or in the aggregate with all such
violations and remedial actions, a Material Adverse Effect; there has
been no material spill, discharge, leak, emission,
12
injection, escape, dumping or release of any kind onto such property or
of any medical wastes, toxic wastes, hazardous wastes or hazardous
substances due to or caused by the Company or with respect to which the
Company had knowledge, except for any such spill, discharge, leak,
emission, injection, escapes, dumpings or releases which would not cause
or would not be reasonably likely to cause, individually or in the
aggregate with all such spills, discharges, leaks, emissions,
injections, escapes, dumpings or releases, a Material Adverse Effect;
and the terms "hazardous substances," "toxic wastes," "hazardous wastes"
and "medical wastes" shall have the meanings specified in any applicable
Environmental Laws.
(ee) [intentionally omitted].
(ff) Other than as set forth in the General Disclosure Package: (a) the
Company has the right to use or is the owner of all right, title and
interest in and to all foreign and domestic patents and patent
applications owned, used or controlled by the Company (collectively, the
"INTELLECTUAL PROPERTY") and relating to EOquin, satraplatin, LFA and
ozarelix; (b) to the Company's knowledge, there have been no claims made
against the Company asserting the invalidity or unenforceability of any
of the Intellectual Property, other than regard to regulatory
correspondence on patent applications; (c) the Company has not made any
claim of any violation or infringement by others of its rights in the
Intellectual Property; and (d) the Company has not received any notice
that it is infringing upon the asserted rights of others in connection
with the Intellectual Property; except for, with regard to all items
above, that which would not cause, individually or in the aggregate, a
Material Adverse Effect. The Company has duly and properly filed or
caused to be filed with the United States Patent and Trademark Office
(the "PTO") and foreign and international patent authorities appropriate
for the product at the time it is filed, all patent applications owned
by the Company (the "COMPANY PATENT APPLICATIONS"). To the knowledge of
the Company, the Company is in compliance with the PTO's duty of candor
and disclosure and has made no material misrepresentation as it relates
to the filing and prosecution of the Company Patent Applications. The
Company has not intentionally withheld from the PTO any information
material to a determination of patentability of claims pending in the
Company Patent Applications. The Company has no knowledge of any
information which would preclude the Company from having clear title to
the Company Patent Applications.
(gg) The clinical, pre-clinical and other studies and tests conducted by
or on behalf of or sponsored by the Company were and, if still pending,
are being conducted in all material respects in accordance with all
statutes, laws, rules and regulations, as applicable (including, without
limitation, those administered by the FDA or by any foreign, federal,
state or local governmental or regulatory authority performing functions
similar to those performed by the FDA) except where the failure to do so
would not have a Material Adverse Effect. The descriptions of the
results of such studies and tests in the General Disclosure Package are
accurate and complete in all material respects and fairly present the
published data derived from such studies and tests, and the Company has
no knowledge of other studies or tests the results of which are
inconsistent with or otherwise call into question the results described
or referred to in the General Disclosure Package. The Company has not
received any notices or other correspondence from the FDA or any other
foreign, federal, state or local governmental or regulatory authority
performing functions similar to those performed by the FDA with respect
to any ongoing clinical or pre-clinical studies
13
or tests requiring the termination, suspension or material modification
of such studies or tests.
(hh) The Company materially complies with applicable regulatory
requirements (including, without limitation, those administered by the
FDA and any other foreign, federal, state or local governmental or
regulatory authority performing functions similar to those performed by
the FDA).
(ii) The Company has not failed to file with the applicable regulatory
authorities (including, without limitation, the FDA or any foreign,
federal, state or local governmental or regulatory authority performing
functions similar to those performed by the FDA) any filing,
declaration, listing, registration, report or submission except where
such failure to file would not have a material adverse effect; all such
filings, declarations, listings, registrations, reports or submissions
were in compliance with applicable laws when filed except where a lack
of compliance would not have a material adverse effect and no
deficiencies have been asserted by any applicable regulatory authority
(including, without limitation, the FDA or any foreign, federal, state
or local governmental or regulatory authority performing functions
similar to those performed by the FDA) with respect to any such filings,
declarations, listings, registrations, reports or submissions except
where such deficiency would not have a material adverse effect.
(jj) No material relationship, direct or indirect, as contemplated by
Item 404(a) of Regulation S-K exists between or among the Company on the
one hand and the directors, officers, or stockholders of the Company on
the other hand which is required to be described in the General
Disclosure Package and which is not so described.
(kk) Neither the Company nor, to the knowledge of the Company, any other
person associated with or acting on behalf of the Company including,
without limitation, any director, officer, agent or employee of the
Company or any of its subsidiaries, has, directly or indirectly, while
acting on behalf of the Company or any of its subsidiaries (i) used any
corporate funds for unlawful contributions, gifts, entertainment or
other unlawful expenses, or received or retained any funds, relating to
political activity; (ii) made any unlawful payment from corporate funds
to, or received or retained any unlawful funds from, foreign or domestic
government officials or employees or to or from foreign or domestic
political parties or campaigns; (iii) violated any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any
other unlawful payment or received or retained any other unlawful funds.
(ll) The Company is not or, after giving effect to the offering and sale
of the Shares and the application of the proceeds thereof as described
in the General Disclosure Package, will not become an "INVESTMENT
COMPANY" as defined in the Investment Company Act of 1940, as amended.
(mm) [intentionally omitted].
(nn) Other than as contemplated by this Agreement, neither the Company
nor any of its subsidiaries is a party to any contract, agreement or
understanding with
14
any person that would give rise to a valid claim against the Company or
the Placement Agents for a brokerage commission, finder's fee or like
payment in connection with the offering and sale of the Shares.
(oo) The Company has not sustained, since the date of the latest audited
financial statements included in the General Disclosure Package or the
Registration Statement, or incorporated by reference therein, as the
case may be, any material loss or interference with its business from
fire, explosion, flood, terrorist act or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth in or contemplated
by the General Disclosure Package.
(pp) Except as set forth in or as otherwise contemplated by the
Registration Statement or the General Disclosure Package, subsequent to
the respective dates as of which information is given in the
Registration Statement and the General Disclosure Package, there has not
been (i) any adverse change, or any development that would reasonably be
expected to result in a Material Adverse Effect, (ii) any obligation,
direct or contingent (including any off-balance sheet obligations),
incurred by the Company outside the ordinary course of business, that is
material to the Company, (iii) any change in the capital stock (other
than the issuance of shares of Common Stock upon exercise of stock
options and warrants and conversion of preferred stock disclosed as
outstanding in the Registration Statement and the General Disclosure
Package and the grant of options under existing stock option plans
described in the Registration Statement and the General Disclosure
Package) or outstanding indebtedness of the Company or (iv) any dividend
or distribution of any kind declared, paid or made on the capital stock
of the Company.
(qq) Any statistical and market-related data included in the
Registration Statement or the General Disclosure Package are based on or
derived from sources that the Company reasonably and in good faith
believes to be reliable and accurate.
(rr) The Shares are registered under the Exchange Act and are duly
listed and admitted and authorized for trading, subject to official
notice of issuance, on the Nasdaq Global Market ("NASDAQ") and the
Company has taken no action with the specific intention of terminating
the registration of the Shares under the Exchange Act or delisting or
suspending from trading the Shares from Nasdaq, nor has the Company
received any information suggesting that the Commission or the National
Association of Securities Dealers, Inc. ("NASD") is contemplating
terminating or suspending such registration or listing.
(ss) Neither the Company nor its subsidiaries nor, to the Company's
knowledge, any of their respective officers, directors or affiliates has
taken or will take, directly or indirectly, any action designed or
intended to stabilize or manipulate the price of any security of the
Company.
(tt) Neither the Company nor its subsidiaries nor, to the Company's
knowledge, any of their respective officers, directors or affiliates has
offered, or caused any Placement Agent to offer, Shares to any person
with the intent to influence unlawfully (i) a customer or supplier of
the Company to alter the
15
customer's or supplier's level or type of business with the Company, or
(ii) a trade journalist or publication to write or publish favorable
information about the Company or any of their respective products or
services.
(uu) There are no affiliations with Placement Agents who are NASD
members among the Company's officers, directors or, to the best of the
knowledge of the Company, any five percent (5%) or greater stockholder
of the Company, except as set forth in the General Disclosure Package or
the Registration Statement or otherwise disclosed in writing to the
Placement Agents.
(vv) There are no outstanding loans, advances (except normal advances
for business expense in the ordinary course of business) or guarantees
or indebtedness by the Company to or for the personal benefit of any of
the executive officers or directors of the Company, except as disclosed
in the General Disclosure Package or the Registration Statement.
(ww) There are no transactions, arrangements or other relationships
between and/or among the Company, any of its affiliates (as such term is
defined in Rule 405 of the Securities Act) and any unconsolidated
entity, including, but not limited to, any structured finance, special
purpose or limited purpose entity that could reasonably be expected to
materially affect the Company's liquidity or the availability of or
requirements for its capital resources required to be described in the
General Disclosure Package or the Registration Statement that have not
been described as required.
(xx) The Company has taken all necessary actions to ensure that, upon
and at all times after the Nasdaq shall have approved the Shares for
inclusion, it will be in material compliance with all applicable
corporate governance requirements set forth in the Nasdaq Marketplace
Rules that are then in effect and is actively taking steps to ensure
that it will be in compliance with other applicable corporate governance
requirements set forth in the Nasdaq Marketplace Rules not currently in
effect upon and all times after the effectiveness of such requirements.
(yy) The Company and its Board of Directors have taken all necessary
action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti takeover
provision under the Company's certificate of incorporation (or similar
charter documents) or the laws of its state of incorporation that is or
could become applicable to the Purchasers as a result of the Purchasers
and the Company fulfilling their obligations or exercising their rights
under this Agreement or the Subscription Agreements, including without
limitation as a result of the Company's issuance of the Shares and the
Purchasers' ownership of the Shares.
(zz) No approval of the stockholders of the Company under the rules and
regulations of the Nasdaq Stock Market (including Rule 4350 of the
Nasdaq Marketplace Rules) is required for the Company to issue and
deliver to the Purchasers the Shares.
Any certificate signed by any officer of the Company and delivered to
the Placement Agents or counsel for the Placement Agents in connection with the
offering of
16
the Shares shall be deemed a representation and warranty by the Company, as to
the matters covered thereby, to the Placement Agents.
3. THE CLOSING. The time and date of closing and delivery of the documents
required to be delivered to the Placement Agents pursuant to Section 6 hereof
shall be at 10:00 A.M., local time, on May 9, 2007 (the "CLOSING DATE") at the
office of ____________________________.
4. FURTHER AGREEMENTS OF THE COMPANY. The Company agrees with the Placement
Agents:
(a) (i) to prepare the 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 430A,
430B and 430C and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the second business (2nd) day
following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A of the
Rules and Regulations; (ii) to notify the Placement Agents immediately
of the Company's intention to file or prepare any supplement or
amendment to any Registration Statement, the General Disclosure Package
or to the Prospectus; (iii) to make no further amendment or supplement
prior to the Closing Date to the Registration Statement or any amendment
or supplement to the General Disclosure Package or Prospectus without
the consent of the Representative, which consent shall not be
unreasonably delayed or withheld; (iv) for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Shares to advise the Representative promptly after it receives notice
thereof, of the time when any amendment to the Registration Statement
has been filed or becomes effective or any amendment or supplement to
the General Disclosure Package or Prospectus has been filed and to
furnish the Representative with copies thereof; (v) to file timely all
reports and any definitive proxy or information statements required to
be filed by the Company with the Commission and Nasdaq pursuant to
Section 13(a), 15 or 15(d) of the Exchange Act subsequent to the date of
the Prospectus and for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Shares; (vi) to
advise the Representative, promptly after the Company receives notices
thereof, (x) of any request by the Commission to amend the Registration
Statement or to amend or supplement the General Disclosure Package or
Prospectus or for additional information and (y) of the issuance by the
Commission, of any stop order suspending the effectiveness of the
Registration Statement or any post-effective amendment thereto or any
order directed at any Incorporated Document or any amendment or
supplement thereto or any order preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the
Prospectus, of the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, of the institution or threatening
of any proceeding for any such purpose, or of any request by the
Commission for the amending or supplementing of the Registration
Statement, the General Disclosure Package or the Prospectus or for
additional information; and (vii) in the event of the issuance of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus, any Issuer Free Writing Prospectus or the
Prospectus or suspending
17
any such qualification, and promptly to use its best efforts to obtain
the withdrawal of such order.
(b) The Company represents and agrees that, unless it obtains the prior
consent of the Representative, and the Representative represents and
agrees that, unless it obtains the prior consent of the Company, it has
not made and will not, make any offer relating to the Shares that would
constitute a "free writing prospectus" as defined in Rule 405 under the
Securities Act unless the prior written consent of the Representative or
the Company, respectively, has been received (each, a "PERMITTED FREE
WRITING PROSPECTUS"); provided that the prior written consent of the
Representative hereto shall be deemed to have been given in respect of
the Issuer Free Writing Prospectus[es], if any, included in Schedule A
hereto. The Company represents that it has treated and agrees that it
will treat each Permitted Free Writing Prospectus created by the Company
as an Issuer Free Writing Prospectus, comply with the requirements of
Rules 164 and 433 under the Securities Act applicable to any Issuer Free
Writing Prospectus, including the requirements relating to timely filing
with the Commission, legending and record keeping and will not take any
action that would result in the Placement Agents or the Company being
required to file with the Commission pursuant to Rule 433(d) under the
Securities Act a free writing prospectus prepared by or on behalf of
such Placement Agents that such Placement Agents otherwise would not
have been required to file thereunder.
(c) If at any time when the Prospectus relating to the Shares is
required to be delivered (or in lieu thereof, the notice referred to in
Rule 173(a) under the Securities Act) any event occurs or condition
exists as a result of which the Prospectus as then amended or
supplemented would include any untrue statement of a material fact, or
omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made when
the Prospectus is delivered (or in lieu thereof, the notice referred to
in Rule 173(a) under the Securities Act), not misleading, or if it is
necessary at any time to amend or supplement any Registration Statement
or the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus, to comply with the
Securities Act or the Exchange Act, that the Company will promptly
notify the Placement Agents thereof and upon their request will prepare
an appropriate amendment or supplement or upon their request make an
appropriate filing pursuant to Section 13 or 14 of the Exchange Act in
form and substance reasonably satisfactory to the Placement Agents which
will correct such statement or omission or effect such compliance and
will use its best efforts to have any amendment to any Registration
Statement declared effective as soon as possible. The Company will
furnish without charge to each Placement Agent and to any dealer in
securities as many copies as such Placement Agent may from time to time
reasonably request of such amendment or supplement. In case any
Placement Agent is required to deliver a prospectus (or in lieu thereof,
the notice referred to in Rule 173(a) under the Securities Act) relating
to the Shares nine (9) months or more after the later of (i) the latest
effective date of the Registration Statement or (ii) the date of the
Prospectus, the Company upon the request of such Placement Agent and at
the expense of such Placement Agent will prepare promptly an amended or
supplemented Prospectus as may be necessary to permit compliance with
the requirements of Section 10(a)(3) of the
18
Securities Act and deliver to such Placement Agent as many copies as
such Placement Agent may request of such amended or supplemented
Prospectus complying with Section 10(a)(3) of the Securities Act.
(d) If the General Disclosure Package is being used to solicit offers to
buy the Shares 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
Representative, it becomes necessary to amend or supplement the General
Disclosure Package in order to make the statements therein, in the light
of the circumstances then prevailing, not misleading, or to make the
statements therein not conflict with the information contained or
incorporated by reference in the Registration Statement then on file and
not superseded or modified, 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 Agents and any dealers 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 then
prevailing, be misleading or conflict with the Registration Statement
then on file, or so that the General Disclosure Package will comply with
law. The foregoing sentence does not apply to statements in or omissions
from the General Disclosure Package in reliance upon, and in conformity
with, written information furnished to the Company by the Placement
Agents specifically for inclusion therein or information that is not
furnished to the Company by the Placement Agent but should have been in
order to make the General Disclosure Package not misleading, which
information the parties hereto agree is limited to the Placement Agents'
Information (as defined in Section 16).
(e) 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 conflicted or will conflict
with the information contained in the Registration Statement, Pricing
Prospectus or Prospectus, including any document incorporated by
reference therein and any prospectus supplement deemed to be a part
thereof and not superseded or modified or included or would include an
untrue statement of a material fact or omitted or would omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances
prevailing at the subsequent time, not misleading, the Company has
promptly notified or will promptly notify the Placement Agent so that
any use of the Issuer Free Writing Prospectus may cease until it is
amended or supplemented and has promptly amended or will promptly amend
or supplement, at its own expense, such Issuer Free Writing Prospectus
to eliminate or correct such conflict, untrue statement or omission. The
foregoing sentence does not apply to statements in or omissions from any
Issuer Free Writing Prospectus in reliance upon, and in conformity with,
written information furnished to the Company by the Placement Agents
specifically for inclusion therein, or information that is not furnished
to the Company by the Placement Agent but should have been in order to
make the Free Writing
19
Prospectus not misleading, which information the parties hereto agree is
limited to the Placement Agents' Information (as defined in Section 16).
(f) [intentionally omitted].
(g) To deliver promptly to the Representative such number of the
following documents as the Representative shall reasonably request
(except where the documents have been filed electronically with the
Commission via ▇▇▇▇▇): (i) conformed copies of the Registration
Statement as originally filed with the Commission (in each case
excluding exhibits), (ii) each Preliminary Prospectus, if any, (iii) any
Issuer Free Writing Prospectus, (iv) the Prospectus (the delivery of the
documents referred to in clauses (i), (ii), (iii) and (iv) of this
paragraph (g) to be made not later than 10:00 A.M., New York time, on
the Business Day following the execution and delivery of this
Agreement), (v) conformed copies of any amendment to the Registration
Statement (excluding exhibits), (vi) any amendment or supplement to the
General Disclosure Package or the Prospectus (the delivery of the
documents referred to in clauses (v) and (vi) of this paragraph (g) to
be made not later than 10:00 A.M., New York City time, on the Business
Day following the date of such amendment or supplement) and (vii) any
document incorporated by reference in the General Disclosure Package or
the Prospectus (excluding exhibits thereto) (the delivery of the
documents referred to in clause (vi) of this paragraph (g) to be made
not later than 10:00 A.M., New York City time, on the Business Day
following the date of such document).
(h) To make generally available to its stockholders and the
Representative as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement
(as defined in Rule 158(c) under the Securities Act), an earnings
statement of the Company (which need not be audited) satisfying Section
11(a) of the Securities Act and the Rules and Regulations (including, at
the option of the Company, Rule 158).
(i) To promptly take from time to time such actions as the
Representative may reasonably request to qualify the Shares for offering
and sale under the state securities, or blue sky, laws of such
jurisdictions (including without limitation any post-filing
requirements) as the Representative may reasonably designate and to
continue such qualifications in effect for so long as required for the
distribution of the Shares, and the Company will pay the fee of the NASD
in connection with its review of the Offering, if applicable. The
Company shall not be obligated to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or to file a general
consent to service of process in any jurisdiction.
(j) Not to directly or indirectly sell, assign, transfer, pledge,
contract to sell of any shares of Common Stock or securities convertible
into or exercisable or exchangeable for Common Stock for a period of 90
days after the Closing Date without the prior written consent of the
Representative, other than (1) any issuance or sale of equity or
equity-linked securities relating to a joint venture, collaborative
arrangement, strategic transaction, licensing transaction or other
similar transaction; (2) any issuance to an employee, director,
consultant, supplier, lender or lessor; (3) any issuance pursuant to the
Company's equity incentive plans; and (4) any issuance pursuant to a
pre-existing obligation of the Company to do so. The Company will cause
each of its executive officers that are listed in
20
the Company's Form 10-K/A for the year ended December 31, 2006 and
directors to furnish to the Representative, prior to the Closing Date, a
letter, substantially in the form of Exhibit B attached hereto,
provided, however, that the Company shall not be liable for the failure
of any such executive officers or directors to comply with such lock-up
agreements.
(k) Prior to the Closing Date, to furnish to the Placement Agents, as
soon as they have been prepared, copies of any unaudited interim
consolidated financial statements of the Company for any periods
subsequent to the periods covered by the financial statements appearing
or incorporated by reference in the General Disclosure Package or the
Registration Statement.
(l) Prior to the Closing Date, not to issue any press release or other
communication directly or indirectly or hold any press conference with
respect to the Company, its condition, financial or otherwise, or
earnings, business affairs or business prospects (except for routine
oral marketing communications or press releases in the ordinary course
of business and consistent with the past practices of the Company and of
which the Representative is notified), without the prior written consent
of the Representative (which shall not be unreasonably withheld or
delayed), unless in the judgment of the Company and its counsel, and
after notification to the Representative, such press release or
communication is required by law. In such event, the Company shall
consult with the Representative as to the contents of such press
release.
(m) [intentionally omitted].
(n) [intentionally omitted].
(o) To engage and maintain, at its expense, a registrar and transfer
agent for the Common Stock.
(p) To supply the Representative with copies of all correspondence to
and from, and all related documents issued to and by, the Commission in
connection with the registration of the Shares under the Securities Act.
(q) The Company will use its best efforts to maintain the listing of the
Shares on the Nasdaq Global Market at the Closing Date.
5. PAYMENT OF EXPENSES. The Company agrees with the Placement Agents to pay (a)
the costs incident to the authorization, issuance, sale, preparation and
delivery of the Shares to the Purchasers and any transfer taxes payable in that
connection; (b) the costs incident to the Registration of the Shares under the
Securities Act; (c) the costs incident to the preparation, printing and
distribution of the Registration Statement, any Issuer Free Writing Prospectus,
the General Disclosure Package, the Prospectus, any amendments, supplements and
exhibits thereto or any document incorporated by reference therein, and the
costs of printing, reproducing and distributing, any transaction document by
mail, telex or other means of communications; (d) at the Closing, the fees and
expenses incurred in connection with filings, if any, made with the NASD
(including related reasonable fees and expenses of counsel for the Placement
Agents), if applicable; (e) any other applicable listing or other fees; (f) the
fees and expenses of qualifying the Shares under the securities laws of the
several jurisdictions as provided in Section 4(i)
21
and of preparing a Blue Sky Memoranda (including related reasonable fees and
expenses of counsel to the Placement Agents); (g) all fees and expenses of the
registrar and transfer agent of the Common Stock; and (h) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement (including, without limitation, the fees and expenses of the
Company's counsel and the Company's independent accountants and the travel and
other expenses incurred by Company personnel in connection with any "roadshow"
including, without limitation, any expenses advanced by the Placement Agents on
the Company's behalf and with the Company's prior consent (which will be
promptly reimbursed)); provided that, except as otherwise provided in this
Section 5 and in Sections 7 and 9, each of the Placement Agents shall pay its
own respective costs and expenses, including, without limitation, the fees and
disbursements of their counsel.
6. CONDITIONS TO THE OBLIGATIONS OF THE PLACEMENT AGENTS AND THE PURCHASERS, AND
THE SALE OF THE SHARES. The obligations of the Placement Agents and the closing
of the sale of the Shares hereunder are subject to the accuracy, when made and
on the Closing Date, of the representations and warranties on the part of the
Company contained herein, to the accuracy of the statements of the Company made
in any certificates pursuant to the provisions hereof, to the performance by the
Company of its obligations hereunder, and to each of the following additional
terms and conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement or any part thereof, preventing or suspending the use of any
Base Prospectus, any Preliminary Prospectus, the Prospectus or any
Permitted Free Writing Prospectus or any part thereof shall have been
issued and no proceedings for that purpose or pursuant to Section 8A
under the Securities Act shall have been initiated or threatened by the
Commission, and all requests for additional information on the part of
the Commission (to be included or incorporated by reference in the
Registration Statement or the Prospectus or otherwise) shall have been
complied with; the Rule 462(b) Registration Statement, if any, each
Issuer Free Writing Prospectus and the Prospectus shall have been filed
with, the Commission within the applicable time period prescribed for
such filing by, and in compliance with, the Rules and Regulations and in
accordance with Section 4(a), and the Rule 462(b) Registration
Statement, if any, shall have become effective immediately upon its
filing with the Commission; and the NASD shall have raised no objection
to the fairness and reasonableness of the terms of this Agreement or the
transactions contemplated hereby.
(b) The Placement Agents shall not have discovered and disclosed to the
Company on or prior to the Closing Date that the Registration Statement
or any amendment or supplement thereto contains an untrue statement of a
fact which, in the opinion of counsel for the Placement Agents, is
material or omits to state any fact which, in the opinion of such
counsel, is material and is required to be stated therein or is
necessary to make the statements therein not misleading, or that the
General Disclosure Package, any Issuer Free Writing Prospectus or the
Prospectus or any amendment or supplement thereto contains an untrue
statement of fact which, in the opinion of such counsel, is material or
omits to state any fact which, in the opinion of such counsel, is
material and is necessary in order to make the statements, in the light
of the circumstances in which they were made, not misleading.
22
(c) All corporate proceedings and other legal matters incident to the
authorization, form, execution, delivery and validity of each of this
Agreement, the Shares, the Registration Statement, the General
Disclosure Package, each Issuer Free Writing Prospectus and the
Prospectus and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be reasonably satisfactory in
all material respects to counsel for the Placement Agents, and the
Company shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.
(d) The Placement Agents shall have received from ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, corporate counsel for the Company such counsel's written opinion,
addressed to the Placement Agents dated as of the Closing Date, in form
and substance reasonably satisfactory to the Representative as set forth
in Exhibit C attached hereto.
(e) ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ LLP shall have furnished
to the Placement Agents such counsel's written opinion, as special
patent counsel to the Company, addressed to the Placement Agents and
dated as of the Closing Date, in substantially the form attached hereto
as Exhibit D.
(f) The Placement Agents shall have received from Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., such opinion or opinions, dated the
Closing Date and addressed to the Placement Agents, with respect to the
issuance and sale of the Shares, the Registration Statement, the
Prospectus and other related matters as the Placement Agents may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters (provided, however, that if such opinion cannot be
provided to Placement Agents, the reasons that such opinion cannot be
given shall be provided to the Company).
(g) The Company shall have furnished to the Placement Agents a
certificate, dated the Closing Date, of each of its President and Chief
Executive Officer and Vice President Finance stating that (i) such
officers have carefully examined the Registration Statement, the General
Disclosure Package, any Permitted Free Writing Prospectus and the
Prospectus and, in their opinion, the Registration Statement and each
amendment thereto, at the Applicable Time and as of the date of this
Agreement and as of the Closing Date did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and the General Disclosure Package, as of the
Applicable Time and as of the Closing Date, any Permitted Free Writing
Prospectus as of its date and as of the Closing Date, the Prospectus and
each amendment or supplement thereto, as of the respective date thereof
and as of the Closing Date, did not include 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
in which they were made, not misleading, (ii) since the effective date
of the Registration Statement no event has occurred that was required to
be disclosed, but was not set forth in, a supplement or amendment to the
Registration Statement, the General Disclosure Package or the
Prospectus, (iii) to the best of their knowledge after reasonable
investigation, as of the Closing Date, the representations and
23
warranties of the Company in this Agreement were true and correct when
made and are true and correct as of the Closing Date in all material
respects (or, if any such representations or warranties are qualified by
materiality or Material Adverse Effect, then such representations and
warranties are true and correct in all respects) and the Company has
complied with in all material respects all agreements and covenants
contained in this Agreement and satisfied all conditions on its part to
be performed or satisfied hereunder at or prior to the Closing Date in
all material respects, (iv) subsequent to the date of the most recent
financial statements included or incorporated by reference in the
General Disclosure Package, there has been no change in the financial
position or results of operation of the Company and its subsidiaries
that would have a Material Adverse Effect, or any change, or any
development including a prospective change, that involves a Material
Adverse Effect in or affecting the financial condition , results of
operations, business, or assets of the Company and its subsidiaries
taken as a whole, except as set forth in the Prospectus or General
Disclosure Package, and (v) the Registration Statement is effective, and
to their knowledge, as of the Closing Date (I) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been commenced or are pending before
or are contemplated by the Commission and (II) no action has been taken
by any governmental agency, body or official, and no injunction,
restraining order or order of any nature by any federal or state court
has been issued, which would prevent the issuance of the Shares.
(h) At the time of the execution of this Agreement, the Placement Agents
shall have received from ▇▇▇▇▇ & Company a letter, addressed to the
Placement Agents and dated such date, in form and substance reasonably
satisfactory to the Representative (i) confirming that they are an
independent registered public accounting firm with respect to the
Company within the meaning of the Securities Act and the Rules and
Regulations and (ii) containing the statements and information of the
type ordinarily included in accountant's "comfort letters" to
underwriters, delivered according to Statement of Auditing Standards No.
72 and Statement of Auditing Standards No. 100 (or any successor
bulletins), with respect to the financial statements and certain
financial information contained or incorporated by reference in the
Registration Statement, the Pricing Prospectus and the Prospectus.
(i) On the Closing Date, the Placement Agents shall have received a
letter (the "BRING-DOWN LETTER") from ▇▇▇▇▇ & Company addressed to the
Placement Agents, and dated the Closing Date confirming, as of the date
of the bring-down letter (or, with respect to matters involving changes
or developments since the respective dates as of which specified
financial information is given in the Registration Statement, the
Pricing Prospectus and the Prospectus as of a date not more than three
Business Days prior to the date of the bring-down letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by its letter delivered to the
Placement Agents concurrently with the execution of this Agreement
pursuant to Section 6(h).
(j) [Intentionally Omitted]
(k) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated
24
by reference in the Registration Statement, the Pricing Prospectus and
the Prospectus any loss or interference with its business from fire,
explosion, flood, terrorist act or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth in or contemplated
by the General Disclosure Package, and (ii) since such date there shall
not have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the business, general
affairs, management, financial position, stockholders' equity, results
of operations or prospects of the Company and its subsidiaries,
otherwise than as set forth in or contemplated by the General Disclosure
Package, the effect of which, in any such case described in clause (i)
or (ii), is, in the judgment of the Representative, so material and
adverse as to make it impracticable or inadvisable to proceed with the
sale or delivery of the Shares on the terms and in the manner
contemplated by the General Disclosure Package.
(l) The Shares shall be registered under the Exchange Act and, as of the
Closing Date, the Shares shall be listed and admitted and authorized for
trading on the Nasdaq Global Market, and satisfactory evidence of such
actions shall have been provided to the Representative. The Company
shall have taken no action with the specific intention of terminating
the registration of the Shares under the Exchange Act or delisting or
suspending from trading the Shares from Nasdaq, nor has the Company
received any information suggesting that the Commission or Nasdaq is
contemplating terminating such registration or listing.
(m) At the Execution Time, the Company shall have furnished to the
Representative a letter substantially in the form of Exhibit B hereto
from each executive officer that is listed in the Company's Form 10-K/A
for the year ended December 31, 2006 and director of the Company.
(n) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the Nasdaq Global Market or
the American Stock Exchange or in the over-the-counter market, or
trading in any securities of the Company on any exchange or in the
over-the-counter market, shall have been suspended or minimum or maximum
prices or maximum ranges for prices shall have been established on any
such exchange or such market by the Commission, by such exchange or by
any other regulatory body or governmental authority having jurisdiction,
(ii) a banking moratorium shall have been declared by federal or state
authorities or a material disruption has occurred in commercial banking
or securities settlement or clearance services in the United States,
(iii) the United States shall have become engaged in hostilities (other
than any current hostilities), or the subject of an act of terrorism,
there shall have been a material escalation in hostilities involving the
United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
any other calamity or crisis or any change in general economic,
political or financial conditions in the United States or elsewhere, if
the effect of any such event in clause (iii) or (iv) makes it, in the
judgment of the Representative, impracticable or inadvisable to proceed
with the sale or delivery of the Shares on the terms and in the manner
contemplated by the General Disclosure Package.
25
(o) No action shall have been taken and no statute, rule, regulation or
order shall have been enacted, adopted or issued by any governmental
agency or body which would, as of the Closing Date, prevent the issuance
or sale of the Shares or materially and adversely affect or potentially
and adversely affect the business or operations of the Company; and no
injunction, restraining order or order of any other nature by any
federal or state court of competent jurisdiction shall have been issued
as of the Closing Date which would prevent the issuance or sale of the
Shares or materially and adversely affect or potentially and adversely
affect the business or operations of the Company.
(p) The Company shall have prepared and filed with the Commission a
Current Report on Form 8-K with respect to the Offering, including as an
exhibit thereto this Agreement and any other documents relating thereto.
(q) The Company shall have entered into Subscription Agreements with
each of the Purchasers and such agreements shall be in full force and
effect.
(r) The NASD shall have raised no objection to the fairness and
reasonableness of the placement agent terms and arrangements.
(s) Prior to the Closing Date, the Company shall have furnished to the
Placement Agents such further information, certificates and documents as
the Placement Agents may reasonably request.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Placement Agents.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company shall indemnify and hold harmless each Placement Agent,
its directors, officers, managers, members, employees, representatives
and agents (including, without limitation Lazard Freres & Co. LLC,
(which will provide services to the LCM) and its affiliates, and each of
its and their respective directors, officers, members, employees,
representatives and agents and each person, if any, who controls Lazard
Freres & Co. LLC within the meaning of the Securities Act) and each
person, if any, who controls any Placement Agents within the meaning of
the Securities Act (collectively the "PLACEMENT AGENT INDEMNIFIED
PARTIES" and each a "PLACEMENT AGENT INDEMNIFIED PARTY") against any
loss, claim, damage, expense or liability, joint or several, or any
action, investigation or proceeding in respect thereof, to which that
Placement Agent Indemnified Party may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage,
expense, liability, action, investigation or proceeding arises out of or
is based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Base Prospectus, the Registration
26
Statement, any Preliminary Prospectus, any Issuer Free Writing
Prospectus, any "issuer information" filed or required to be filed
pursuant to Rule 433(d) of the Rules and Regulations or the Prospectus,
or in any amendment or supplement thereto or document incorporated by
reference therein, (ii) the omission or alleged omission to state in the
Base Prospectus, the Registration Statement, any Preliminary Prospectus,
any Issuer Free Writing Prospectus, any "issuer information" filed or
required to be filed pursuant to Rule 433(d) of the Rules and
Regulations or the Prospectus, or in any amendment or supplement thereto
or document incorporated by reference therein, a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (iii) any breach of the representations and warranties of
the Company contained herein, or (iv) any act or failure to act, or any
alleged act or failure to act, by any Placement Agent in connection
with, or relating in any manner to, the Shares or the Offering
contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, expense, liability, action, investigation or
proceeding arising out of or based upon matters covered by clause (i),
(ii) or (iii) above; (provided that the Company shall not be liable in
the case of any matter covered by this clause (iv) to the extent that it
is determined in a final judgment by a court of competent jurisdiction
that such loss, claim, damage, expense, liability or action resulted
directly from any such act or failure to act undertaken or omitted to be
taken by such Placement Agent through its gross negligence, bad faith or
willful misconduct) and shall reimburse each Placement Agent Indemnified
Party promptly upon demand for any legal or other expenses reasonably
incurred by that Placement Agent Indemnified Party in connection with
investigating or preparing to defend or defending against or appearing
as a third party witness in respect of, or otherwise reasonably incurred
in connection with any such loss, claim, damage, expense, liability,
action, investigation or proceeding as such fees and expenses are
incurred; provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, expense,
liability, action, investigation or proceeding arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or
alleged omission from the Base Prospectus, the Registration Statement,
any Preliminary Prospectus, any Issuer Free Writing Prospectus, any
"issuer information" filed or required to be filed pursuant to Rule
433(d) of the Rules and Regulations or the Prospectus, or in any
amendment or supplement thereto made in reliance upon and in conformity
with written information furnished to the Company by or on behalf of any
Placement Agent through the Representative specifically for use therein,
which information the parties hereto agree is limited to the Placement
Agents' Information (as defined in Section 16 ). This indemnity
agreement is not exclusive and will be in addition to any liability,
which the Company might otherwise have and shall not limit any rights or
remedies which may otherwise be available at law or in equity to each
Placement Agent Indemnified Party.
(b) Each Placement Agent, severally and not jointly, shall indemnify and
hold harmless the Company its officers, employees, representatives and
agents, each of its directors and each person, if any, who controls the
Company within the meaning of the Securities Act (collectively the
"COMPANY INDEMNIFIED PARTIES" and each a "COMPANY INDEMNIFIED PARTY")
against any loss, claim, damage, expense or liability, joint or several,
or any action, investigation or proceeding in respect thereof, to which
the Company Indemnified Parties may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Base
Prospectus, the Registration Statement, any Preliminary Prospectus, any
Issuer Free Writing Prospectus, any "issuer information" filed or
required to be filed pursuant to Rule
27
433(d) of the Rules and Regulations or the Prospectus, or in any
amendment or supplement thereto, or (ii) the omission or alleged
omission to state in the Base Prospectus, the Registration Statement,
any Preliminary Prospectus, any Issuer Free Writing Prospectus, any
"issuer information" filed or required to be filed pursuant to Rule
433(d) of the Rules and Regulations or the Prospectus, or in any
amendment or supplement thereto, a material fact required to be stated
therein or necessary to make the statements therein not misleading, but
in each case only to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company
by or on behalf of that Placement Agent through the Representative
specifically for use therein, and shall reimburse the Company
Indemnified Parties for any legal or other expenses reasonably incurred
by such parties in connection with investigating or preparing to defend
or defending against or appearing as third party witness in connection
with any such loss, claim, damage, expense, liability or action,
investigation or proceeding as such fees and expenses are incurred;
provided that the parties hereto hereby agree that such written
information provided by the Placement Agents consist solely of the
Placement Agents' Information. This indemnity agreement is not exclusive
and will be in addition to any liability, which the Placement Agents
might otherwise have and shall not limit any rights or remedies which
may otherwise be available at law or in equity to the Company
Indemnified Parties. Notwithstanding the provisions of this Section 7(b)
, in no event shall any indemnity by any Placement Agent under this
Section 7(b) exceed the total compensation received by such Placement
Agent in accordance with Section 1(e).
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 7 except to the extent it has been materially prejudiced by
such failure; and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 7. If any
such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified
party under this Section 7 for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof
other than reasonable costs of investigation; provided, however, that
any indemnified party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof but the fees
and expenses of such counsel shall be at the expense of such indemnified
party unless (i) the employment thereof has been specifically authorized
by the indemnifying party in writing, (ii) such indemnified party shall
have been advised by such counsel that there may be one or more legal
defenses
28
available to it which are different from or additional to those
available to the indemnifying party and in the reasonable judgment of
such counsel it is advisable for such indemnified party to employ
separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action in accordance with the terms hereof and
employ counsel reasonably satisfactory to the indemnified party, in
which case, if such indemnified party notifies the indemnifying party in
writing that it elects to employ separate counsel at the expense of the
indemnifying party, the indemnifying party shall not have the right to
assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the reasonable
fees and expenses of more than one separate firm of attorneys at any
time for all such indemnified parties, which firm shall be designated in
writing by the Representative, if the indemnified parties under this
Section 7 consist of any Placement Agent Indemnified Party, or by the
Company if the indemnified parties under this Section 7 consist of any
Company Indemnified Parties. Each indemnified party, as a condition of
the indemnity agreements contained in Sections 7(a) and 7(b) shall use
all reasonable efforts to cooperate with the indemnifying party in the
defense of any such action or claim. Subject to the provisions of
Section 7(d) below, no indemnifying party shall be liable for any
settlement, compromise or consent to the entry of judgment in connection
with any such action effected without its written consent (which consent
shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such
action (other than a judgment entered with the consent of such
indemnified party), the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability by
reason of such settlement or judgment.
(d) If at any time an indemnified party shall have requested that an
indemnifying party reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for
any settlement of the nature contemplated by this Section 7 effected
without its written consent if (i) such settlement is entered into more
than 45 days after receipt by such indemnifying party of the request for
reimbursement, (ii) such indemnifying party shall have received notice
of the terms of such settlement at least 30 days prior to such
settlement being entered into and (iii) such indemnifying party shall
not have reimbursed such indemnified party in accordance with such
request prior to the date of such settlement.
(e) If the indemnification provided for in this Section 7 is unavailable
or insufficient to hold harmless an indemnified party under Section 7(a)
or 7(b), then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability,
or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on
the one hand and the Placement Agents on the other from the offering of
the Shares or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above
but also the relative fault
29
of the Company on the one hand and the Placement Agents on the other
with respect to the statements or omissions which resulted in such loss,
claim, damage or liability, or action in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received
by the Company on the one hand and the Placement Agents on the other
with respect to such offering shall be deemed to be in the same
proportion as the total net proceeds from the offering of the Shares
purchased under this Agreement (before deducting expenses) received by
the Company bears to the total compensation received by the Placement
Agents with respect to the Shares purchased under this Agreement. The
relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Placement
Agents on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission; provided that the parties hereto
agree that the written information furnished to the Company by the
Representative for use in the Prospectus, or in any amendment or
supplement thereto, consists solely of the Placement Agents'
Information. The Company and the Placement Agents agree that it would
not be just and equitable if contributions pursuant to this Section 7(e)
were to be determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party
as a result of the loss, claim, damage or liability, or action in
respect thereof, referred to above in this Section 7(e) shall be deemed
to include, for purposes of this Section 7(e), any legal or other
expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7(e), no Placement Agent
shall be required to contribute any amount in excess of the total
compensation received by such Placement Agent in accordance with Section
1(e) less the amount of any damages which such Placement Agent has
otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
Each Placement Agent's obligations to contribute as provided in this
Section 7(e) are several in proportion to the total compensation received by
each of the Placement Agents in accordance with Section 1(e) and not joint.
8. TERMINATION. The obligations of the Placement Agents hereunder may be
terminated by the Representative, in its absolute discretion by notice given to
the Company prior to delivery (including electronic delivery) of and payment for
the Shares if, prior to that time, any of the events described in Sections 6(n)
have occurred or if all of the Purchasers shall decline to purchase the Shares
for any reason permitted under this Agreement or the Subscription Agreements.
9. REIMBURSEMENT OF PLACEMENT AGENTS' EXPENSES. If the sale of the Shares
provided for herein is not consummated because any condition to the obligations
of the Placement Agents and the Purchasers set forth in Section 6 hereof is not
satisfied, because of any termination pursuant to Section 8 hereof or because of
any refusal,
30
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by the
Placement Agents, the Company will reimburse the Placement Agents upon demand
for all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel and any expenses advanced by the Placement Agents on
the Company's behalf) that shall have been incurred by the Placement Agents in
connection with this Agreement and the proposed purchase and sale of the Shares
not to exceed in the aggregate $25,000. The Company shall pay, upon demand, such
amount to the Representative.
10. SUCCESSORS; PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of and be binding upon the Placement Agents, Lazard Freres
& Co. LLC, the Company, and their respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any person
other than the persons mentioned in the preceding sentence any legal or
equitable right, remedy or claim under or in respect of this Agreement, or any
provisions herein contained, this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person; except that the representations,
warranties, covenants, agreements and indemnities of the Company and its
subsidiaries contained in this Agreement shall also be for the benefit of the
Placement Agent Indemnified Parties, and the indemnities of the Placement Agents
shall also be for the benefit of the Company Indemnified Parties. It is
understood that the Placement Agents' responsibilities to the Company are solely
contractual in nature and the Placement Agents do not owe the Company, or any
other party, any fiduciary duty as a result of this Agreement.
11. SURVIVAL OF INDEMNITIES, REPRESENTATIONS, WARRANTIES, ETC. The respective
indemnities, covenants, agreements, representations, warranties and other
statements of the Company and its subsidiaries and the Placement Agents, as set
forth in this Agreement or made by them respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of the Placement Agents, the Company or any
person controlling any of them and shall survive delivery of and payment for the
Shares.
12. ABSENCE OF FIDUCIARY RELATIONSHIP. The Company acknowledges and agrees that:
(a) Each Placement Agent's responsibility to the Company is solely
contractual in nature, the Placement Agents have been retained solely to
act as placement agents in connection with the sale of the Shares and no
fiduciary, advisory or agency relationship between the Company and the
Placement Agents has been created in respect of any of the transactions
contemplated by this Agreement, irrespective of whether any of the
Placements Agents or Lazard Freres & Co. LLC has advised or is advising
the Company on other matters;
(b) The price of the Shares set forth in this Agreement was established
by the Company following discussions and arms-length negotiations with
the Representative, and the Company is capable of evaluating and
understanding, and understands and accepts, the terms, risks and
conditions of the transactions contemplated by this Agreement;
31
(c) The Company has been advised that the Placement Agents and Lazard
Freres & Co. LLC and their affiliates are engaged in a broad range of
transactions which may involve interests that differ from those of the
Company and that the Placement Agents have no obligation to disclose
such interests and transactions to the Company by virtue of any
fiduciary, advisory or agency relationship; and
(d) The Company waives, to the fullest extent permitted by law, any
claims it may have against the Placement Agents for breach of fiduciary
duty or alleged breach of fiduciary duty and agrees that the Placement
Agents shall have no liability (whether direct or indirect) to the
Company in respect of such a fiduciary duty claim or to any person
asserting a fiduciary duty claim on behalf of or in right of the
Company, including stockholders, employees or creditors of the Company.
13. NOTICES. All statements, requests, notices and agreements hereunder shall be
in writing, and:
(a) if to the Placement Agents, shall be delivered or sent by mail,
telex or facsimile transmission to ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇ (Fax:
▇▇▇-▇▇▇-▇▇▇▇), with a copy to Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention:
▇▇▇▇ ▇▇▇▇▇ (Fax: ▇▇▇-▇▇▇-▇▇▇▇).
(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to Spectrum Pharmaceuticals, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (Fax: (949)
▇▇▇-▇▇▇▇), with a copy to: ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇ ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ , Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (Fax: (949)
▇▇▇-▇▇▇▇).
14. DEFINITIONS OF CERTAIN TERMS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday, a
legal holiday, a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City or any day
on which the Nasdaq Global Market is not open for trading.
"EFFECTIVE DATE" shall mean each date and time that the Registration
Statement (and any post-effective amendment or amendments thereto)
became or becomes effective.
"EXECUTION TIME" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"INTERFERENCE PROCEEDING" shall have the meaning set forth in 35 U.S.C.
Section 135.
"TO THE COMPANY'S KNOWLEDGE" and words of similar import shall mean the
Company's actual knowledge based on reasonable due diligence.
32
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
16. PLACEMENT AGENTS' INFORMATION. The parties hereto acknowledge and agree
that, for all purposes of this Agreement, the Placement Agents' Information
consists solely of the statements concerning the Placement Agents contained in
the _______ paragraph under the heading "Plan of Distribution" in the Prospectus
Supplement.
17. PARTIAL UNENFORCEABILITY. The invalidity or unenforceability of any Section,
paragraph or provision of this Agreement shall not affect the validity or
enforceability of any other Section, paragraph or provision hereof. If any
Section, paragraph or provision of this Agreement is for any reason determined
to be invalid or unenforceable, there shall be deemed to be made such minor
changes (and only such minor changes) as are necessary to make it valid and
enforceable.
18. GENERAL. This Agreement constitutes the entire agreement of the parties to
this Agreement and supersedes all prior written or oral and all contemporaneous
oral agreements, understandings and negotiations with respect to the subject
matter hereof. In this Agreement, the masculine, feminine and neuter genders and
the singular and the plural include one another. The section headings in this
Agreement are for the convenience of the parties only and will not affect the
construction or interpretation of this Agreement. This Agreement may be amended
or modified, and the observance of any term of this Agreement may be waived,
only by a writing signed by the Company and the Placement Agents.
19. COUNTERPARTS. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
20. CONSENT TO ACT AS REPRESENTATIVE. ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. ("OPPENHEIMER"),
Lazard Capital Markets LLC, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC and ThinkEquity Partners, LLC
consents and agrees that Oppenheimer will act as Representative of the Placement
Agents under this Agreement and with respect to the sale of the Shares.
Accordingly, each of Lazard Capital Markets LLC, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC,
ThinkEquity Partners, LLC and Oppenheimer authorizes Oppenheimer to manage the
Offering and the sale of the Shares and to take such action in connection
therewith as Oppenheimer in its sole discretion deems appropriate or desirable.
[Signature Page Follows]
33
If the foregoing is in accordance with your understanding of the
agreement between the Company and the Placement Agents, kindly indicate your
acceptance in the space provided for that purpose below.
Very truly yours,
SPECTRUM PHARMACEUTICALS, INC.
By:
-------------------------------------
Name:
Title:
Accepted as of the date first above written:
▇▇▇▇▇▇▇▇▇▇▇ & CO. INC.
By:
-------------------------------------
Name:
Title:
34
Lazard Capital Markets LLC
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC
By:
-------------------------------------
Name:
Title:
ThinkEquity Partners, LLC
By:
-------------------------------------
Name:
Title:
35
SCHEDULE I
PLACEMENT AGENTS
▇▇▇▇▇▇▇▇▇▇▇ & CO. INC.
LAZARD CAPITAL MARKETS LLC
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC
THINKEQUITY PARTNERS, LLC
EXHIBIT A
FORM OF SUBSCRIPTION AGREEMENT
Spectrum Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned (the "Investor") hereby confirms its agreement with you as
follows:
1. This Subscription Agreement (this "Agreement") is made as of the date set
forth below between Spectrum Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), and the Investor.
2. The Company has authorized the sale and issuance to certain investors of up
to 5,134,100 shares (the "Shares") of its common stock, par value $0.001 per
share (the "Common Stock") for a purchase price of $6.25 per Share (the
"Purchase Price").
3. The offering and sale of the Shares (the "Offering") is being made pursuant
to an effective Registration Statement on Form S-3 (including the Prospectus
contained therein (the "Base Prospectus") and the exhibits thereto and the
documents incorporated therein by reference, the "Registration Statement") filed
by the Company with the Securities and Exchange Commission (the "Commission"),
if applicable, certain preliminary prospectuses that have or will be filed with
the Commission and delivered to the Investor on or prior to the date hereof (the
"Time of Sale Prospectus"), and a Prospectus Supplement (the "Prospectus
Supplement") containing certain supplemental information regarding the Shares
and terms of the Offering that will be filed with the Commission and delivered,
or otherwise made available to the Investor by the filing of an electronic
version thereof with the Commission, to the Investor along with the Company's
counterpart to this Agreement.
4. The Company and the Investor agree that the Investor will purchase from the
Company and the Company will issue and sell to the Investor the Shares as set
forth below for the aggregate purchase price set forth below. The Shares shall
be purchased pursuant to the Terms and Conditions for Purchase of Shares
attached hereto as Annex I and incorporated herein by this reference as if fully
set forth herein.
5. The manner of settlement of the Shares purchased by the Investor shall be
determined by such Investor as follows (check one):
[____] A. Delivery by electronic book-entry at The Depository Trust Company
("DTC"), registered in the Investor's name and address as set forth
below, and released by U.S. Stock Transfer Corporation, the Company's
transfer agent (the "Transfer Agent"), to the Investor at the Closing.
NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS
AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL:
(I) DIRECT THE BROKER-DEALER AT WHICH THE ACCOUNT OR ACCOUNTS TO
BE CREDITED WITH THE SHARES ARE MAINTAINED TO
SET UP A DEPOSIT/WITHDRAWAL AT CUSTODIAN ("DWAC")
INSTRUCTING THE TRANSFER AGENT TO CREDIT SUCH ACCOUNT OR
ACCOUNTS WITH THE SHARES, AND
(II) REMIT BY WIRE TRANSFER THE AMOUNT OF FUNDS EQUAL TO THE
AGGREGATE PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY
THE INVESTOR TO THE FOLLOWING ACCOUNT:
JPMorgan Chase Bank
ABA# ▇▇▇▇▇▇▇▇▇
Credit Acct# 304880876
Spectrum/Oppenheimer Escrow
Ref:______________________
[____] B. Delivery versus payment ("DVP") through DTC (i.e., the Company shall
deliver Shares registered in the Investor's name and address as set
forth below and released by the Transfer Agent to the Investor at the
Closing directly to the account(s) at ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc.
identified by the Investor and simultaneously therewith payment shall
be made from such account(s) to the Company through DTC). NO LATER
THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE
INVESTOR AND THE COMPANY, THE INVESTOR SHALL:
(I) NOTIFY ▇▇▇▇▇▇▇▇▇▇▇ & CO. INC. OF THE ACCOUNT OR ACCOUNTS AT
▇▇▇▇▇▇▇▇▇▇▇ & CO. INC. TO BE CREDITED WITH THE SHARES BEING
PURCHASED BY SUCH INVESTOR, AND
(II) CONFIRM THAT THE ACCOUNT OR ACCOUNTS AT ▇▇▇▇▇▇▇▇▇▇▇ & CO.
INC. TO BE CREDITED WITH THE SHARES BEING PURCHASED BY THE
INVESTOR HAVE A MINIMUM BALANCE EQUAL TO THE AGGREGATE
PURCHASE PRICE FOR THE SHARES BEING PURCHASED BY THE
INVESTOR.
--OR--
[____] C. Delivery to the Investor's custodial account (i.e., the Company shall
deliver Shares registered in the Investor's name and address as set
forth below and released by the Transfer Agent to the Investor at the
Closing directly to the account(s) at the custodian identified by the
Investor and promptly thereafter payment shall be made to the
Company). NO LATER THAN ONE (1) BUSINESS DAY AFTER THE EXECUTION OF
THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE INVESTOR SHALL
NOTIFY ▇▇▇▇▇▇▇▇▇▇▇ & CO. INC. OF THE ACCOUNT OR ACCOUNTS TO BE
CREDITED WITH THE SHARES BEING PURCHASED BY SUCH INVESTOR AND THE
CUSTODIAN AT WHICH SUCH ACCOUNT OR ACCOUNTS ARE MAINTAINED.
IT IS THE INVESTOR'S RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR
CONFIRM THE PROPER ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR
SETTLEMENT IN A TIMELY MANNER. IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE
PURCHASE PRICE FOR THE SHARES OR DOES NOT MAKE PROPER ARRANGEMENTS FOR
SETTLEMENT IN A TIMELY
MANNER, THE SHARES MAY NOT BE DELIVERED AT CLOSING TO THE INVESTOR OR THE
INVESTOR MAY BE EXCLUDED FROM THE CLOSING ALTOGETHER.
6. The Investor represents that, except as set forth below, (a) it has had no
position, office or other material relationship within the past three years with
the Company or persons known to it to be affiliates of the Company, (b) it is
not a NASD member or an Associated Person (as such term is defined under the
NASD Membership and Registration Rules Section 1011) as of the Closing, and (c)
neither the Investor nor any group of Investors (as identified in a public
filing made with the Commission) of which the Investor is a part in connection
with the Offering of the Shares, acquired, or obtained the right to acquire, 20%
or more of the Common Stock (or securities convertible into or exercisable for
Common Stock) or the voting power of the Company on a post-transaction basis.
Exceptions:
--------------------------------------------------------------------------------
(If no exceptions, write "none." If left blank, response will be deemed to be
"none.")
7. The Investor represents that it has received, or can obtain on the
Commission's website, prior to or in connection with the receipt of this
Agreement, the final Base Prospectus, dated January 24, 2005, which is a part of
the Company's Registration Statement, and the Prospectus Supplement
(collectively, the "Disclosure Package") along with the Company's counterpart to
this Agreement.
8. The Company shall have the sole right to accept offers to purchase the Shares
and may reject any such offer, in its sole and absolute discretion, in whole or
in part. No offer by the Investor to buy Shares will be accepted and no part of
the purchase price will be delivered to the Company until the Company has
accepted such offer by countersigning a copy of this Agreement, and any such
offer may be withdrawn or revoked, without obligation or commitment of any kind,
at any time prior to the Company (or a Placement Agent on behalf of the Company)
sending (orally, in writing or by electronic mail) notice of its acceptance of
such offer. An indication of interest in response to the Investor signing this
Agreement will involve no obligation or commitment of any kind until this
Agreement is accepted and countersigned by the Company and notice of such
acceptance has been sent as aforesaid.
Number of Shares:
--------------------------------
Purchase Price Per Share: $
----------------------
Aggregate Purchase Price: $
----------------------
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.
Dated as of: May ___, 2007
----------------------------------------
INVESTOR
By:
-------------------------------------
Print Name:
-----------------------------
Title:
----------------------------------
Address:
----------------------------------------
----------------------------------------
----------------------------------------
Agreed and Accepted this ___ day of May, 2007:
SPECTRUM PHARMACEUTICALS, INC.
By:
-------------------------------------
Name:
Title:
ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SHARES
1. AUTHORIZATION AND SALE OF THE SHARES. Subject to the terms and
conditions of this Agreement, the Company has authorized the sale of the Shares.
2. AGREEMENT TO SELL AND PURCHASE THE SHARES; PLACEMENT AGENTS.
2.1 At the Closing (as defined in Section 3.1), the Company will
sell to the Investor, and the Investor will purchase from the Company, upon the
terms and conditions set forth herein, the number of Shares set forth on the
last page of the Agreement to which these Terms and Conditions for Purchase of
Shares are attached as Annex I (the "Signature Page") for the aggregate purchase
price therefor set forth on the Signature Page.
2.2 The Company proposes to enter into substantially this same
form of Subscription Agreement with certain other investors (the "Other
Investors"). The Investor and the Other Investors are hereinafter sometimes
collectively referred to as the "Investors," and this Agreement and the
Subscription Agreements executed by the Other Investors are hereinafter
sometimes collectively referred to as the "Agreements."
2.3 Investor acknowledges that the Company intends to pay
▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc., Lazard Capital Markets LLC, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, LLC and
ThinkEquity Partners, LLC (the "Placement Agents") a fee (the "Placement Fee")
in respect of the sale of Shares to the Investor.
2.4 The Company has entered into a Placement Agent Agreement (the
"Placement Agreement") with the Placement Agent that contains certain
representations, warranties, covenants and agreements of the Company. A copy of
the Placement Agreement is available upon request.
3. CLOSINGS AND DELIVERY OF THE SHARES AND FUNDS.
3.1 CLOSING. The completion of the purchase and sale of the
Shares (the "Closing") will occur at a place and time (the "Closing Date") to be
specified by the Company and the Placement Agents, and of which the Investors
will be notified in advance by the Placement Agents. At the Closing, (a) the
Company will cause the Transfer Agent to deliver to the Investor the number of
Shares set forth on the Signature Page registered in the name of the Investor
or, if so indicated on the Investor Questionnaire attached hereto as Exhibit A,
in the name of a nominee designated by the Investor, and (b) the aggregate
purchase price for the Shares being purchased by the Investor will be delivered
by or on behalf of the Investor to the Company.
3.2 (a) CONDITIONS TO THE COMPANY'S OBLIGATIONS. The
Company's obligation to issue the Shares to the Investor will be subject to the
receipt by the Company of the purchase price for the Shares being purchased
hereunder as set forth on the Signature Page and the accuracy of the
representations and warranties made by the Investor and the fulfillment of those
undertakings of the Investor to be fulfilled prior to the Closing Date.
(b) CONDITIONS TO THE INVESTOR'S OBLIGATIONS. The
Investor's obligation to purchase the Shares will be subject to the condition
that the Placement Agents shall not have: (1) terminated the Placement Agreement
pursuant to the terms thereof or (2) determined that the conditions to the
closing in the Placement Agreement have not been satisfied. The Investor's
obligations are expressly not conditioned on the purchase by any or all of the
Other Investors of the Shares that they have agreed to purchase from the
Company.
3.3 DELIVERY OF FUNDS.
(a) Delivery by Electronic Book-Entry at The Depository
Trust Company. If the Investor elects to settle the Shares purchased by such
Investor through delivery by electronic book-entry at DTC, NO LATER THAN ONE (1)
BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE
COMPANY, the Investor shall remit by wire transfer the amount of funds equal to
the aggregate purchase price for the shares being purchased by the Investor to
the following account designated by the Company and the Placement Agents
pursuant to the terms of that certain Escrow Agreement (the "Escrow Agreement")
dated as of May 4, 2007, by and among the Company, the Placement Agents and
JPMorgan Chase Bank, N.A. (the "Escrow Agent"):
JPMorgan Chase Bank
ABA# ▇▇▇▇▇▇▇▇▇
Credit Acct# 304880876
Spectrum/Oppenheimer Escrow
Ref:______________________
Such funds shall be held in escrow until the Closing and
delivered by the Escrow Agent on behalf of the Investors to the Company upon the
satisfaction, in the sole judgment of the Placement Agents, of the Company
Closing Conditions. The Placement Agents shall have no rights in or to any of
the escrowed funds, unless the Placement Agents and the Escrow Agent are
notified in writing by the Company in connection with the Closing that a portion
of the escrowed funds shall be applied to the Placement Fee. The Company and the
Investor agree to indemnify and hold the Escrow Agent harmless from and against
any and all losses, costs, damages, expenses and claims (including, without
limitation, court costs and reasonable attorneys fees) ("Losses") arising under
this Section 3.3 or otherwise with respect to the funds held in escrow pursuant
hereto or arising under the Escrow Agreement, unless it is finally determined
that such Losses resulted directly from the willful misconduct or gross
negligence of, or a material breach of the Escrow Agreement by, the Escrow
Agent. Anything in this Agreement to the contrary notwithstanding, in no event
shall the Escrow Agent be liable for any special, indirect or consequential loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Escrow Agent has been advised of the likelihood of such loss or
damage and regardless of the form of action.
Investor shall also furnish to the Placement Agents a
completed W-9 form (or, in the case of an Investor who is not a United States
citizen or resident, a W-8 form).
(b) Delivery Versus Payment through The Depository Trust
Company. If the Investor elects to settle the Shares purchased by such Investor
by delivery versus payment through DTC, NO LATER THAN ONE (1) BUSINESS DAY AFTER
THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, the Investor
shall confirm that the account or accounts at ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. to be
credited with the Shares being purchased by the Investor have a minimum balance
equal to the aggregate purchase price for the Shares being purchased by the
Investor.
3.4 DELIVERY OF SHARES.
(a) Delivery by Electronic Book-Entry at The Depository
Trust Company. If the Investor elects to settle the Shares purchased by such
Investor through delivery by electronic book-entry at DTC, NO LATER THAN ONE (1)
BUSINESS DAY AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE
COMPANY, the Investor shall direct the broker-dealer at which the account or
accounts to be credited with the Shares being purchased by such Investor are
maintained, which broker/dealer shall be a DTC participant, to set up a
Deposit/Withdrawal at Custodian ("DWAC") instructing U.S. Stock Transfer
Corporation, the Company's transfer agent, to credit such account or accounts
with the Shares by means of an electronic book-entry delivery. Such DWAC shall
indicate the settlement date for the deposit of the Shares, which date shall be
provided to the Investor by the Placement Agents. Simultaneously with the
delivery to the Company by the Escrow Agent of the funds held in escrow pursuant
to Section 3.3 above, the Company shall direct its transfer agent to credit the
Investor's account or accounts with the Shares pursuant to the information
contained in the DWAC.
(b) Delivery Versus Payment through The Depository Trust
Company. If the Investor elects to settle the Shares purchased by such Investor
by delivery versus payment through DTC, NO LATER THAN ONE (1) BUSINESS DAY AFTER
THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, the Investor
shall notify ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. of the account or accounts at ▇▇▇▇▇▇▇▇▇▇▇ &
Co. Inc. to be credited with the Shares being purchased by such Investor. On the
Closing Date, the Company shall deliver the Shares to the Investor directly to
the account(s) at ▇▇▇▇▇▇▇▇▇▇▇ & Co. Inc. identified by Investor and
simultaneously therewith payment shall be made from such account(s) to the
Company through DTC.
4. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE INVESTOR.
4.1 The Investor represents and warrants to, and covenants with,
the Company that (a) the Investor is knowledgeable, sophisticated and
experienced in making, and is qualified to make decisions with respect to,
investments in shares presenting an investment decision like that involved in
the purchase of the Shares, including investments in securities issued by the
Company and investments in comparable companies, and has requested, received,
reviewed and considered all information it deemed relevant in making an informed
decision to purchase the Shares, and (b) the Investor has answered all questions
on the Signature Page and the Investor Questionnaire for use in preparation of
the Prospectus Supplement and the answers thereto are true and correct as of the
date hereof and will be true and correct as of the Closing Date.
4.2 The Investor acknowledges, represents and agrees that no
action has been or will be taken in any jurisdiction outside the United States
by the Company or any Placement Agent that would permit an offering of the
Shares, or possession or distribution of offering materials in connection with
the issue of the Shares in any jurisdiction outside the United States where
action for that purpose is required. Each Investor outside the United States
will comply with all applicable laws and regulations in each foreign
jurisdiction in which it purchases, offers, sells or delivers Shares or has in
its possession or distributes any offering material, in all cases at its own
expense. The Placement Agents are not authorized to make and have not made any
representation or use of any information in connection with the issue,
placement, purchase and sale of the Shares, except as set forth or incorporated
by reference in the Disclosure Package or the Prospectus.
4.3 The Investor further represents and warrants to, and
covenants with, the Company that (a) the Investor has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to
authorize the execution, delivery and performance of this Agreement, and (b)
this Agreement constitutes a valid and binding obligation of the Investor
enforceable against the Investor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as the indemnification agreements
of the Investors herein may be legally unenforceable.
4.4 The Investor understands that nothing in this Agreement or
any other materials presented to the Investor in connection with the purchase
and sale of the Shares constitutes legal, tax or investment advice. The Investor
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of Shares.
4.5 The Investor represents, warrants and agrees that, since the
earlier to occur of (i) the date on which the Placement Agents first contacted
the Investor about the Offering and (ii) the date that is the tenth (10) trading
day prior to the date of this Agreement, it has not engaged in any short selling
of the Company's securities, or established or increased any "put equivalent
position" as defined in Rule 16(a)-1(h) under the Securities Exchange Act of
1934, as amended, with respect to the Company's securities.
5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement or by the
Placement Agents, all covenants, agreements, representations and warranties made
by the Company and the Investor herein will survive the execution of this
Agreement, the delivery to the Investor of the Shares being purchased and the
payment therefor. The Placement Agents and Lazard Freres & Co. LLC shall be
third party beneficiaries with respect to the representations, warranties and
agreements of the Investor in Section 4 hereof.
6. From the date hereof until the date that is 90 days after the Closing
Date, the Company will not, directly or indirectly, offer, sell, assign,
transfer, pledge, or contract to sell any shares of Common Stock or securities
convertible into or exchangeable or exercisable for shares of Common Stock,
except that the Company may engage in transactions as provided in the Placement
Agent Agreement.
7. NOTICES. All notices, requests, consents and other communications
hereunder will be in writing, will be mailed (a) if within the domestic United
States by first-class registered or certified airmail, or nationally recognized
overnight express courier, postage prepaid, or by facsimile or (b) if delivered
from outside the United States, by International Federal Express or facsimile,
and will be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by
nationally recognized overnight carrier, one business day after so mailed, (iii)
if delivered by International Federal Express, two business days after so mailed
and (iv) if delivered by facsimile, upon electric confirmation of receipt and
will be delivered and addressed as follows:
(a) if to the Company, to:
Spectrum Pharmaceuticals, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Investor, at its address on the Signature
Page hereto, or at such other address or addresses as may have been furnished to
the Company in writing.
8. CHANGES. This Agreement may not be modified or amended except
pursuant to an instrument in writing signed by the Company and the Investor.
9. HEADINGS. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and will not be deemed to be
part of this Agreement.
10. SEVERABILITY. In case any provision contained in this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein will
not in any way be affected or impaired thereby.
11. GOVERNING LAW. This Agreement will be governed by, and construed in
accordance with, the internal laws of the State of New York, without giving
effect to the principles of conflicts of law that would require the application
of the laws of any other jurisdiction.
12. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which will constitute an original, but all of which, when
taken together, will constitute but one instrument, and will become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties. The Company and the Investor acknowledge and
agree that the Company shall deliver its counterpart to the Investor along with
the Prospectus Supplement.
13. CONFIRMATION OF SALE. The Investor acknowledges and agrees that such
Investor's receipt of the Company's counterpart to this Agreement, together with
the Prospectus Supplement, shall constitute written confirmation of the
Company's sale of Shares to such Investor.
14. PRESS RELEASE. The Company and the Investor agree that the Company
shall issue a press release announcing the Offering prior to the opening of the
financial markets in New York City on the business day immediately after the
date hereof, which press release the Company agrees to provide to the Investor
for review prior to its issuance.
15. TERMINATION. In the event that the Placement Agreement is terminated
by the Placement Agents pursuant to the terms thereof, this Agreement shall
terminate without any further action on the part of the parties hereto.
EXHIBIT A
SPECTRUM PHARMACEUTICALS, INC.
INVESTOR QUESTIONNAIRE
Pursuant to Section 3 of Annex I to the Agreement, please provide us
with the following information:
1. The exact name that your Shares are to be
registered in. You may use a nominee name if
appropriate:
------------------
2. The relationship between the Investor and the
registered holder listed in response to item 1
above:
------------------
3. The mailing address of the registered holder
listed in response to item 1 above:
------------------
4. The Social Security Number or Tax Identification
Number of the registered holder listed in the
response to item 1 above:
------------------
5. Name of DTC Participant (broker-dealer at which
the account or accounts to be credited with the
Shares are maintained):
------------------
6. DTC Participant Number:
------------------
7. Name of Account at DTC Participant being
credited with the Shares:
------------------
8. Account Number at DTC Participant being credited
with the Shares:
------------------
EXHIBIT B
FORM OF LOCK-UP AGREEMENT
May 4, 2007
▇▇▇▇▇▇▇▇▇▇▇ & Co., Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: SPECTRUM PHARMACEUTICALS, INC.
Ladies and Gentlemen:
The undersigned is aware that Spectrum Pharmaceuticals, Inc. (the
"COMPANY") proposes to carry out a registered direct offering (the "OFFERING")
of its common stock, par value $0.001 per share (the "COMMON STOCK") for which
you will act as placement agent. The undersigned recognizes that the Offering
will be of benefit to the undersigned and will benefit the Company by, among
other things, raising additional capital for its operations. The undersigned
acknowledges that you are relying on the representations and agreements of the
undersigned contained in this letter in carrying out the Offering.
In consideration of the foregoing, the undersigned hereby agrees that,
without the prior written consent of ▇▇▇▇▇▇▇▇▇▇▇ & Co., Inc. ("OPCO"), the
undersigned will not, directly or indirectly, during the period specified in the
following paragraph (the "LOCK-UP PERIOD") (i) offer, sell, agree to offer or
sell, solicit offers to purchase, grant any call option or purchase any put
option with respect to, pledge, grant a security interest in, hypothecate or
otherwise dispose of any Relevant Security (including, without limitation,
shares of Common Stock that may be deemed to be beneficially owned by the
undersigned in accordance with the rules and regulations of the Securities and
Exchange Commission and shares of Common Stock that may be issued upon exercise
of any option or warrant) owned directly by such person or as to which such
person has the power of disposition, (ii) establish or increase a "put
equivalent position" or liquidate or decrease a "call equivalent position" with
respect to any Relevant Security (in each case within the meaning of Section 16
of the Securities Exchange Act of 1934, as amended (the "Act"), and the rules
and regulations promulgated thereunder), or (iii) otherwise enter into any swap,
derivative or other transaction or arrangement that transfers to another, in
whole or in part, directly or indirectly, any of the economic consequences of
ownership of any Relevant Security, whether or not such transaction is to be
settled by delivery of Relevant Securities, other securities, cash or other
consideration. As used herein, "RELEVANT SECURITY" means any capital stock of
the Company or securities convertible into or exchangeable or exercisable for
capital stock of the Company.
The initial Lock-Up Period will commence on the date hereof and will
continue through the close of business on the 30th day following the closing of
the Offering (the "INITIAL LOCK-UP PERIOD"); provided, however, that if (i)
during the last 17 days of the Initial Lock-Up Period, the Company releases
earnings results or (ii) 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 Opco waives, in writing, such extension; provided,
further, however, that the immediately preceding proviso shall not apply if (i)
the safe harbor provided by Rule 139 under the Act is available in the manner
contemplated by Rule 2711(f)(4) of the National Association of Securities
Dealers, Inc. ("NASD"); and (ii) within the 3 business days preceding the 15th
calendar day before the last day of the Lock-Up Period, the Company delivers to
Opco a certificate, signed by the Chief Financial Officer or Chief Executive
Officer of the Company, certifying on behalf of the Company that the Company's
shares of Common Stock are "actively traded securities," within the meaning of
Rule 2711(f)(4) of the NASD.
Notwithstanding the foregoing:
(i) if the undersigned is a partnership, corporation or other
business entity, it may transfer any shares of Common Stock or
warrants to purchase Common Stock (or any other securities
convertible into, exercisable for, or exchangeable for Common
Stock) to its partners, members, shareholders or affiliates (and
to any direct or indirect partner, member, shareholders or
affiliates thereof);
(ii) if the undersigned is an individual, he or she may transfer
shares of Common Stock or warrants to purchase Common Stock (or
any other securities convertible into, exercisable for, or
exchangeable for Common Stock) by gift, will or intestate
succession to his or her immediate family or to a trust the
beneficiaries of which are exclusively the undersigned and/or a
member or members of his or her immediate family (for purposes
of this paragraph, "immediate family" shall mean spouse, lineal
descendant, father, mother, brother or sister of the
transferor);
(iii) the undersigned may exercise options or warrants (including a
cashless exercise) or convert convertible securities outstanding
on the date hereof, provided that the Common Stock received upon
such exercise or conversion shall be subject to the terms of
this letter agreement;
(iv) the undersigned may make bona fide gifts; and
(v) the undersigned may make a bona fide pledge of Common Stock, in
the ordinary course of business, for the sole purpose of
obtaining financing for the undersigned.
provided, however, that in the case of (i), (ii) and (v) it shall be a condition
to the transfer that (A) each transferee execute an agreement stating that the
transferee is receiving and holding the shares of Common Stock (or any other
securities convertible into, exercisable for, or exchangeable for Common Stock)
subject to the provisions of this agreement, and there shall be no further
transfer of such shares of Common Stock (or any other securities convertible
into, exercisable for, or exchangeable for Common Stock) except in accordance
with this agreement, and (B) that each transferee certifies in writing to Opco
that such transferee is in compliance with the terms of this agreement as if
such transferee had been bound by this agreement from the original date of this
agreement.
In furtherance of the foregoing, the Company and its Transfer Agent are
hereby authorized to decline to make any transfer of securities if such transfer
would constitute a violation or breach of this letter agreement.
The undersigned further agrees, from the date hereof until the end of
the Lock-Up Period (including any extensions thereof as specifically provided in
this letter agreement), that the undersigned will not exercise and will waive
his, her or its rights, if any, to require the Company to register its Common
Stock and to receive notice thereof. In addition, the undersigned hereby waives
any and all preemptive rights, participation rights, resale rights, rights of
first refusal and similar rights that the undersigned may have solely in
connection with the Offering or with any issuance or sale by the Company of any
equity or other securities prior to the date of this letter agreement, except
for any such rights as have been heretofore duly exercised or waived.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to enter into this letter agreement and that this
letter agreement constitutes the legal, valid and binding obligation of the
undersigned, enforceable in accordance with its terms. Upon request, the
undersigned will execute any additional documents necessary in connection with
enforcement hereof. Any obligations of the undersigned shall be binding upon the
successors and assigns of the undersigned from the date first above written.
If (i) the Company notifies you in writing that it does not intend to
proceed with the Offering, or (ii) for any reason the
placement agent agreement
between the Company and Opco shall be terminated prior to payment for and
delivery of the Shares to be sold thereunder, then this lock-up agreement shall
be terminated and the undersigned shall be released from its obligations
hereunder.
This letter agreement shall be governed by and construed in accordance with the
laws of the State of
New York applicable to contracts executed and to be
performed entirely within the State of New York. Delivery of a signed copy of
this letter by telecopier or facsimile transmission shall be effective as
delivery of the original hereof.
-----------------------------------
Printed Name of Holder
By:
--------------------------------
-----------------------------------
Printed Name of Person Signing
(indicate capacity of person
signing if signing as custodian,
trustee, or on behalf of an entity)